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National municipal review, December, 1920

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Title:
National municipal review, December, 1920
Series Title:
National municipal review
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National Municipal League
Penny, B. H.
Kettleborough, Charles
Goodrich, Robert M.
Ingersoll, Raymond V.
Wilcox, Delos F.
Atkinson, Raymond C.
Comey, Arthur C.
Otis, Harrison Gray
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Philadelphia, PA
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National Municipal League
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English

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serial ( sobekcm )

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Auraria Library
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Copyright National Civic League. Permission granted to University of Colorado Denver to digitize and display this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.

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Full Text
NATIONAL
MUNICIPAL REVIEW
Vol. IX, No. 12 DECEMBER, 1920 Total No. 54
VIEWS AND REVIEWS
i
The present investigation into the bond purchases of the New York state comptroller is revealing further evidence as to the fickleness of sinking funds. For some years, a rumor has been circulating that a very simple plan was being put into operation. The plan, according to the rumor, was to accumulate, with the assistance of certain banks, bonds for sale to those in charge of the state sinking fund. It was hinted that those involved were protected against loss in a falling market by a proper understanding with those in charge of the trust fund, while any “velvet” from sale at enhanced prices to the state went to the conspirators.
The whole situation is now being thoroughly aired in a John Doe investigation into the affairs of the state comptroller’s office. The charge, in brief, is that hundreds of thousands of dollars have been made by securing the purchase by the state of bonds above the prevailing market rate at the time. The Brooklyn Daily Times announces that the profit on eleven purchases selected at random by its investigators amounted to $300,000. It is clear that, as the inquiry proceeds, certain persons are becoming more and more involved.
Public sinking funds are an enor-
mous risk, in compensation for which the benefits are most remote and theoretical. In addition to careless mismanagement or wilful neglect it is always possible to graft on them. Serial bonds are not only more easily handled, but usually represent a deliberate public decision in favor of sound financial methods in the payment of public debts.
n
The Taint in Politics is the title of a book by an anonymous author, lately published in England, which will furnish welcome material for those who preach distrust of political processes. The thesis is that greed, graft or prejudice, have, in the long run, determined political conduct. Beginning with the Papal politics of the sixteenth century, developing further a century later in England under the Stuarts, the taint finally blossomed into the poisonous and deceptive flower which we call the party system.
Political parties are an obstruction to government, our author believes, because they discourage the highest type of people from becoming candidates for political office. The model candidate is described as a well-to-do, virtuous and leisured man or woman, indifferent to titles, offices and other passing rewards. Such, however, refuse to stultify themselves by associa-
757


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[December
tion with organized parties. If by act of God a legislature composed of such were elected, government, our author admits, would rest on dead center. This is assumed to be the crushing indictment of present political institutions.
If there is something about the work of government which sinks a public official deeper in original sin than the rest of us, the case is indeed serious. Is it as bad as this?
hi
The Michigan Supreme Court has declared that proportional representation in municipal elections is unconstitutional. The case involved the validity of that section of the Kalamazoo charter which provided this method for the election of the city commission. The rest of the charter stood, but a new election was ordered and held last month under the old system. The opinion is invective, rather than judicial reasoning, and in years to come will be grist for the mill of those who would deny to the courts power to declare law void.
Rather scornfully the opinion traces the growth of the movement. The court was not clear as to the distinction between the Hare system and cumulative voting. Criticism which in reality applies only to the latter is directed at the former. Advantage is taken of present conditions in Russia and Poland to discredit proportional representation and the slower progress of the theory in older countries is attributed to superior political wisdom. Perhaps a sufficient description of the opinion is that it is propaganda and not law.
The provisions of the constitution invoked by the court are:
In all elections [a qualified voter] shall be an elector and entitled to vote.
and
No city or village shall have power to abridge the right of elective franchise. . . .
These are held to guarantee to every elector, equality of voting' power, which (under an early case involving cumulative voting) is construed to mean the right of all to vote for every officer to be elected. The earlier case had also held that the cumulative system had denied to voters equality of voting power, since it gave an opportunity for several preferences, and concluded that equality could only be maintained by restricting voters to a single choice for each office. Proportional representation under the usual rules of counting the ballots contains an element of chance that one vote may count for more than another, and is therefore void. How remote this chance is the court does not consider, being content merely to quote, with approval, an earlier dictum that the system is “too intricate and tedious to be adopted for popular elections by the people.”
The right of every elector to vote for every officer to be elected within a district with ballots of equal weight having been established, the court turns to a consideration of what constitutes an election district. It finds that the only legal voting constituency is a geographically defined representative district. There is nothing said about geography in the sections of the constitution invoked by the court, but it is asserted that law “recognizes” no other. The concept of a constituency bound together by like-mindedness and not formed by lines on a map quite exceeds judicial comprehension.
As an example of judicial partisanship and muddle-headedness, this opinion will rank as a classic.
H. W. Dodds.


A NEW METHOD OF SELLING BONDS
BY B. H. PENNY
London, Ontario
Resulting in the sale of $400,000 debentures since its inception in London, On't., a year ago a new plan of disposing of city securities is regarded as a distinct success by both City Treasurer James S. Bell and members of the city council.
Under the new arrangement city debentures are sold directly to the citizens instead of finding their way to the public through bond houses. When authorized debentures are not available, but are expected within a short time, the city treasurer accepts money for which he issues a receipt. This is used for current expenses, reducing the amount of short term loans which it is necessary to make from the banks each year until municipal taxes have been collected. As soon as a debenture issue is authorized the money is applied to its account, the interim receipts are called in and the bonds are issued in their places. Interest is paid on the money from the moment it is accepted by the city. This policy has the effect of keeping the market for city debentures always open.
When the plan of selling debentures over the counter of the treasurer’s office was adopted it was found that many sales were being lost because debentures were not always available. Citizens who came with a few hundred dollars to invest would be told to return in a few weeks when it was expected that bond issues would have been authorized. Most of these pros-spective investors, however, did not wish to have their money lying idle. They accordingly went elsewhere and invested in other securities.
In the opinion of the city treasurer this was needless loss. Debentures to finance public improvements are always certain to be issued each year. In many cases the work is under way, but the bonds cannot be sold until it has been completed, although it is certain that they will be issued before the end of the year. The city treasurer saw no reason why money could not be accepted for these prospective bond issues. He tried out the plan and found that it was highly successful.
That was a year ago. Since January 1 of the present year, $100,000 of debentures to finance a new reservoir; $85,000 for extension of the water system and $80,000 for extension of the electrical system, were sold in this manner.
Municipal debentures are found to make a strong appeal to the smaller investors. They have as much confidence in them as in the government Victory bonds. The facilities now for investing in debentures on any business day of the year are making practically every citizen a bond holder.
London claims to be, not only the first Ontario city to adopt this plan, but also the first Ontario city to sell its debentures directly to the citizens. The policy was adopted on a large scale soon after Canada’s declaration of war on Germany in 1914. It has been pursued successfully since then with one or two exceptions. On these occasions the quick sale of large issues was desired. This could not be accomplished by gradual disposal of small amounts and the whole issues were disposed of to bond houses.


INDIANA REGULATES COAL
BY CHARLES KETTLEBOROUGH Director, Indiana Legislative Reference Bureau
Last summer the Indiana legislature created a special commission to regulate the price and distribution of coal. The courts have sustained the law, and the commission is functioning. :: ::
By an act approved July 31, 1920, the state of Indiana created a special coal and food commission, consisting of the members of the state board of accounts, which is to remain in existence until March 31, 1921, unless continued by future legislation.
Under the terms of this act, the special coal and food commission is given authority to fix the price at which all coal moving in intra-state commerce shall be sold to jobbers, wholesale and retail dealers, and to the public; to determine the priority and extent in which the various classes of users of coal in the state shall be supplied, including railroads, public utilities, industries and the people generally; and to require operators to produce and supply a sufficient quantity of coal to satisfy domestic demands, at the price fixed by the commission.
In determining and fixing the price at which coal shall be sold, the commission is required to hold hearings, conduct investigations and collect the necessary evidence, and for that purpose to administer oaths, issue subpoenas, compel the attendance of witnesses and the production of books, accounts, papers, records, documents and testimony. The law provides that no price fixed shall be confiscatory, nor less than the actual cost plus a fair and reasonable return on the property used in the production and sale of the coal. In fixing the cost of coal to the
producer, the commission is required to allow the cost of production, including all reasonable and proper expenses for operation, maintenance, depreciation and depletion, and in addition thereto a just and reasonable profit. In fixing the prices of coal for dealers, the commission is required to allow the cost to the dealer, including transportation and distribution charges, and in addition thereto a reasonable sum for profit.
In order that the commission may be enabled adequately to control the coal industry, and for the purpose of obtaining the necessary revenue to defray the expenses of the commission, the law requires every person engaged in the business of mining coal and every wholesale and retail dealer to take out a license. The fee for a mining license is $25 per year; for a wholesale dealer’s license, $10 per year; and for a retail dealer’s license, $5 per year. In addition, the act imposes a license fee of one cent per ton on all coal mined in the state, payable into the state treasury monthly.
The validity of this law was speedily assailed, and a suit to test its constitutionality was instituted in the federal district court for the district of Indiana, and an opinion was given by the court on September 6. In this opinion nothing was decided “except the one question, that the state, under its police power, can lay its hand upon the coal mining industry.” (American


1920]
“THE KING CAN DO NO WRONG”
761
Coal Mining Co. vs. The Special Coal and Food Commission of Indiana.)
The hearing held by the commission to determine the price at which coal should be fixed was begun on September 27, and the order prescribing the classification and fixing the prices of coal was issued on October 5. This order divided all mining companies in the state into four classes and fixed the price for each class. A rehearing on the merits of this order was concluded on October 15, and if the coal companies and dealers wish to obtain further
redress they will be obliged to begin the necessary proceedings in the Marion circuit court.
Under the terms of this act, 1,338 retail dealers, 168 wholesale dealers and 252 operators have taken out licenses, and the total tonnage tax paid into the state treasury up to October 1 was $18,256.39.
The commission is also authorized to investigate the hoarding of food, but this provision is an amendment attached in the house, and is of only minor and subsidiary importance.
“THE KING CAN DO NO WRONG”
BY ROBERT M. GOODRICH Detroit Bureau of Governmental Research
A terse discussion of judicial opinion regarding the responsibilities of municipalities for acts of its employes. :: :: :: ::
“L’etat c’est moi” said Louis XIV; and as long as that was true the king could do no legal wrong. Kings have been beheaded and governments uprooted, but the “doctrine” still lives. Divine rights and democracies seem so utterly inconsistent that it is almost impossible to conceive one within the other. Yet so thoroughly has the “divine right” doctrine been woven into American municipal law that until now it has been almost futile to attack it.
Case after case has gone to every supreme court in this country testing the responsibility of cities for the tortious acts of employes. In as many cases the “doctrine” has been a determining factor, in the decision. Formerly its application afforded complete immunity to the government from all responsibility, but the rule, as now generally recognized, attaches liability
in those cases where the act complained of is in the commission of some “ministerial function.”
The legal differentiation between “governmental” and “ministerial” is as ambiguous as it is curious. No attempt could be made at a classification. The definition of McQuillan is illustrative: “ What are governmental powers and duties, and what are corporate ministerial duties, is not subject to precise definition further than to say this: The powers and duties of municipal corporations are of two-fold character; the one public, as regards the state at large, in so far as they are its agents in government; the other private, in so far as they provide the local necessities and conveniences for their own citizens.”
Until recently driving a fire truck has been a glaring example of a governmental function, and an injury sus-


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[December
tained by an individual through neglect of the driver could not legally be compensated.
The decision of Fowler vs. City of Cleveland offers the only exception. In that case a by-stander was injured by the negligent driving of a fire truck. Contrary to innumerable other cases, the majority opinion held that the action of the fire department in driving a hose truck was ministerial, and that the city should be liable. To the average reader this would appear sound and progressive, but it is not progressive enough for Judge Wanamaker. “I heartily agree with the authority and soundness of this judgment. I as heartily disagree with the grounds of the judgment.” The majority opinion whittles down the sphere of the governmental function to the aggrandizement of the ministerial. Judge Wanamaker would annihilate the ministerial function altogether, and hold the municipality bound to pay for all injuries in the exercise of its police powers and governmental functions. To him the immunity of a city in the exercise
of a governmental function is part and a parcel of the immunity of the sovereign state. “The doctrine,” he believes, “has been shot to death on so many battle fields that it would seem utter folly now to resurrect it.”
The niceties that may be raised by scholars of political philosophy can no longer be considered practical. The power to compel is inherent in the people, not the sovereigns. It is based on natural, not legal justice. Common councils in many of our cities, appreciating the injustices caused by adhering to the rules of law, allow claims over the objection of their legal advisors. Judges, too, must sooner or later come to the realization that their decision must be more largely governed by the mores of the day and the conviction of the community, as to what makes for general welfare.
It is interesting to note that the Georgia supreme court passed upon precisely the same set of facts as appear in the instant case with opposite results. No mention of the Fowler case was made in the opinion.
NEW YORK LEGISLATURE ACTS ON
HOUSING
BY RAYMOND V. INGERSOLL New York
I
lx August Governor Smith announced that on September 20 there would be a special session of the legislature to deal with housing. The joint legislative committee, of which Senator Lockwood has been chairman, at once resumed its sessions and hearings, and brought in to the legislature a report giving an analysis of conditions, including tables showing that whereas the rate of wages for men in
the building trades has doubled during the past few years the prices for building materials have on an average advanced still more sharply. This report recommended certain legislation to supplement the emergency laws of last winter affecting the relation of landlord and tenant and also recommended several measures which the committee thought might tend to produce a new supply of housing accommodations.
In a recently published report on


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1920] NEW YORK LEGISLATURE ACTS ON HOUSING
the New York housing crisis the city-club of New York calls attention to the fact that before the war about $75,000,-000 per year was being put into the construction of tenement houses in New York City. In 1914 new apartments were thus provided for 20,577 families and in 1915 for 32,617 families. By 1919, however, this had fallen off to a point where new apartments were made ready for only 1,481 families which was considerably less than the number of apartments actually destroyed during the year to give way for business or other uses.
This same report says that before the war the average proportion of vacancies in all tenements was .056. By 1919 the margin in the tenement houses built within the past twenty-years had fallen to .0006. This year the margin in habitable buildings has been practically wiped out. Obviously without the possibility of change usually afforded by vacancies the landlord would have the tenant completely in his power were it not for special emergency legislation.
XI
The legislature at the special session refused to approve a much advertised plan for exemption of real estate mortages from the state income tax. The purpose of this suggestion had been to overcome the scarcity of money in the mortgage market. It was generally recognized, however, that the measure would be ineffective unless followed by similar exemption from the Federal income tax law. Advocates of the measure contended that while aiming only at mortgages on new houses it would be necessary to include all other mortgages, old and new, whether on dwelling or business properties; otherwise the wish of mortgage holders to place their money where it would be tax exempt might
create a panic in the calling of mortgages. It was calculated that as applied to New York city this would mean the exemption of from forty to fifty dollars of income on existing properties to every dollar of income from the much desired new houses. Some objections to this income tax proposal were brought out in the city club report and others at the hearing in Albany.
The state reconstruction commission in its report of last winter had emphasized the need for establishing state and local housing boards to follow up this subject. They were recommended to the legislature but it refused to adopt the proposal. This refusal was doubtless based partly on a lack of inclination to carry out any suggestion emanating from any commission appointed by the governor, but still more by a very evident reluctance in all parts of the state outside of NewYork city to deal with matters of housing along new lines. This may forecast the probable attitude of the next regular session in regard to a proposed constitutional amendment to make it possible for state or municipal credit to be used for promotion of housing activities. On the whole the governor and the legislative leaders worked harmoniously and the legislature stood ready to pass any bill recommended by the joint housing committee provided it was made to apply only to New York city and the surrounding metropolitan area.
The pressing situation existing in the city is represented by the fact that about one hundred thousand dispossess notices had been served for October 1. In fact this condition was so acute that legislative leaders were carried much further in their landlord and tenant legislation than they had had any intention of going.
Without going into great detail it


NATIONAL MUNICIPAL REVIEW
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764
may be enough to say that these recent acts of the legislature seek in substance to abolish contract relations between landlord and tenant for a period of two years, especially so far as the amount of rental is concerned. In all summary proceedings for dispossession the tenant may interpose a defense that the rent is unreasonable and the agreement oppressive. The landlord must then file a detailed statement of his investment, income, expenses, etc., and the burden is upon him to make out a prima facie case of reasonableness. Provision is also made that where a tenant holds over after a termination of his lease the landlord may not demand possession except on one of three grounds. He must allege and prove either that the tenant is objectionable, or that the owner and his family wish to occupy the premises themselves, or that the building is to be demolished to give way to new construction.
Some doubt has been raised as to the constitutionality of these measures in so far as they affect tenancies based upon definite contracts. Doubt has also been expressed as to the constitutionality of one of the acts which seeks to impose upon ejectment proceedings in the supreme court the same restrictions as to hold-over tenants which have been applied in another act to the special summary proceedings. It is generally conceded that the summary dispossess proceedings being a special remedy may be strictly limited or done away with altogether. The immediate effect of this set of bills has been to prevent wholesale evictions on October 1.
in
Three things were done at the special session which look toward stimulation of house construction. In the first place definite provision was inserted in
the rent laws of the special session, and also in others which had been passed last winter, that these restrictions on the landlord should not apply to new housing accommodations built under the existing high costs. It is recognized that the pressure of demand has become overwhelming but that, chiefly due to the abnormal cost of construction, the law of supply has not responded in the usual way and must have stimulation.
Aside from a minor measure in regard to investment of certain public funds in the securities of a hitherto rather inactive institution, known as the state land bank, the only other action taken toward securing a new supply of housing was an act permitting the local authorities in a city, county or village to exempt from all local taxation until January 1, 1932, new buildings planned and used for dwelling purposes. In order, however, to get the advantage of this exemption such new buildings must have been commenced before April 1, 1922, and completed within two years after commencement.
In New York city the rate for local taxation is more than .025 and is going up. As New York real estate is assessed at 100 per cent it is obvious that this exemption will mean an accumulated saving of taxes which, in the course of the period of exemption, would amount to fully one-fourth of the entire cost of the building. From the point of view of a man building for his own use this inducement is most obvious. For an organization building with the intention of renting it would be of material aid both in figuring out a satisfactory balance sheet and in securing a larger mortgage loan. Lenders are at present very cautious about lending even up to 50 per cent of the cost of the building, because they fear that lower produc-


SERVICE AT COST
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1920]
tion costs later on may bring down the value of their security. The tax exempt building would have a more secure value and if the saving in taxes is applied toward amortization of the mortgage the margin of security increases each year. The speculative builder who constructs to sell will be better off because with the exemption feature he can get a much better price for the completed building. Public revenues are not greatly impaired for the reason that without some such encouragement the building will not
be done and with it land values in sections where there is extensive construction will be very materially increased. The increased land values would, of course, not be exempted.
If the board of aldermen and the board of estimate of New York city take favorable action on this statute it is believed by many that this factor, taken in combination with an expected moderation in the prices of building materials, will produce a widespread resumption of building activities during the coming year.
SERVICE AT COST IN LOCAL TRANSPORTATION
BY DELOS F. WILCOX New York
Analysis of the plan recommended by Federal Electric Railways Commission as the solvent of street railway difficulties. :: ::
SERVICE AT COST DEFINED
In its report to the president, the Federal Electric Railways Commission defines the service-at-cost contract, by the enumeration of its “ mainfeatures,” as follows:
(a) Fair valuation of the property;
(b) Capitalization to conform thereto;
(c) Agreed return upon capital;
(d) Public control of capital issues, and, to a certain extent, over expenditures;
(e) Public supervision over management, operation and service;
(f) Automatic changes of rates to meet fluctuating economic conditions, and to insure a proper return on the value;
(g) Private operation, subject to the right of the municipality to purchase the property at its value or upon an agreed price;
(h) Reduction of taxes and assessments.
SERVICE AT COST DISCUSSED
Then the commission says:
The service-at-cost contract is still in its experimental stage, and naturally a number of criticisms have been made of it. These have been considered, but with the limited experience under this contract we believe that the criticisms are more theoretical than real. If these defects prove to be substantial and result in unduly increasing the cost of service, they can be removed by improved regulation, but if they cannot finally be avoided, then it would seem that the public has ample protection in the contract’s purchase provisions.
Generally speaking, the main criticism of this form of contract is that it tends toward inefficiency and uneconomic operation; that it contains no provision for the control of strikes or uninterrupted service, and that labor and management may co-operatively increase the cost of operation to the point where the public may be unduly burdened.
From the point of view of credit restoration, the outstanding advantage of this contract is that rates are automatically adjusted to meet changing operating conditions. We are inclined to think that the assurance of an automatic adjustment of fare will do more than any-


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NATIONAL MUNICIPAL REVIEW
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thing else to restore the confidence of the investor in these properties. Public confidence will be immeasurably strengthened through the valuation of the properties, because the figure that is established constitutes the basis of the return to the investor and fixes, at least, the minimum price which the public will be obliged to pay if, at some future time, it should decide to purchase and operate the property. When the value is thus fixed there can be no further dispute as to capitalization or excessive profits, because the people will know just what they are paying for. The controlling element in its favor is the restoration of public confidence in the corporation due to the removal of those elements of friction which have so frequently engaged the attention of the public. It might also be said that to a certain extent it removes the railways from the idea of speculative gain and places them upon a common-sense business basis where the people pay for the service they get and where the opportunity for large profits no longer exists, since economies and lower operating costs are reflected in reduced charges for service. When the contract is once established the opportunity for municipal corruption is reduced to the minimum.
We strongly recommend the principles of the service-at-cost contract, not as the only solution, but as one means of solving a very difficult problem.
In cases where the electric railways operate in more than one municipality and between different municipalities, such service-at-cost contracts can properly, in our judgment, be made only with the public service commission, and in such cases the provisions of the contract should apply in any particular community to the system as a whole rather than to its individual parts.
The commission states that “practically all of the witnesses for the electric railway industry favored service-at-cost franchises,” and further states that the principle of service at cost is back of all public service commission regulation. On this ground it contends that the idea of service at cost is not new, but that the new thing is the method provided for carrying out that principle through contracts with devices “for automatically and quickly adjusting price to cost.”
It will be observed that “private
operation” is one of the characteristics of the service-at-cost contract as the commission defines it. Yet in Massachusetts the service-at-cost plan was put into effect on the Boston and Bay State lines through the state’s direct assumption of the operation through boards of public trustees. Evidently this Boston arrangement is not the “pure quill” service-at-cost plan that the commission favors; for the commission elsewhere in its report indicates that it is very skeptical about public ownership and operation and believes that the solution of the electric railway problem can best be worked out under continued private management.
VALUATION IS THE CORNER-STONE
The determination of the amount of the investment to be recognized as a basis for the adjustment of rates and for ultimate purchase is the cornerstone of a service-at-cost agreement, whether we look at it from the point of view of the street railway' company or from the point of view of the community. The valuation is the chief stumbling-block in the way of an amicable settlement of the public relations of a privately owned utility. The valuation of a property rendering an essential public service, with many of the characteristics of monopoly, is always a complex and difficult problem, but the ordinary complexities and difficulties have been multiplied by the abnormal price conditions growing out of the world war and by the confused status of valuation law and procedure in the United States to-day. The admitted over-capitalization of the early days of street railway development has engendered a spirit of distrust and antagonism on the part of the public, and this spirit is sharpened


1920]
SERVICE AT COST
767
by the efforts of the companies to take advantage of the reproduction-cost method of valuation as a means of absorbing the inflation in their securities.
The first feature in the service-at-cost contract mentioned by the commission is “fair valuation of the property.” In every practical application of the plan it is of the highest importance to know what this phrase means. The Federal Electric Railways Commission “discouraged” the introduction of testimony on the subject of valuation, called attention to the fact that in the process of appraising the steam railroads of the United States the Interstate Commerce Commission has made an exhaustive study of the principles of valuation for rate-making purposes, expressed the opinion that “the decisions of the Interstate Commerce Commission, based upon long experience and investigation, will in large measure settle the standards of valuation,” and suggested that municipalities and states engaged in fixing the values of electric railways by arbitration or otherwise should familiarize themselves with the Interstate Commerce Commission’s practice, experience and decisions in valuation cases. Particular reference was made to the Interstate Commerce Commission’s report in Valuation Docket No. 2, Texas Midland Railroad.
ORIGINAL COST A PRIMARY FACTOR
That the Federal Electric Railways Commission felt it necessary to hold out a warning signal to electric railway companies to restrain their passion for overvaluation is manifest from certain things contained in the commission’s report. In one place it says:
Service-at-cost plans have been recently rejected by popular vote, largely on the issue of valuation, in Chicago, Denver and Minneapolis.
The public, justly or unjustly, has become so suspicious of the electric railway companies that it may be expected to reject any service-at-cost or public ownership question submitted to popular vote, no matter how fairly the plan may be formulated, if they are not thoroughly convinced that the capital item has been fairly and honestly arrived at. (Italics are mine.)
Again, in the course of its reference to the railroad valuation work of the
I. C. C., the commission says:
The first requirement of the valuation act is for finding of original cost. The commission is reporting original cost as fully as it possibly can be obtained from the best available evidence in each particular case. In its valuation proceedings it has been earnestly contended that the cost of reproduction new as of the date of inquiry should be taken to be the value of the property. Others have contended with equal earnestness that the value of the property should be limited to the original cost, as this item represents the money which has been actually invested by the stockholders and bondholders in the property.
The rapid increase in the cost of labor, supplies and material during and subsequent to the war period seems to have served as a peculiarly vivid indication that the original cost is a primary factor in finding value for rate-making purposes.
Whatever else may be said of the recommendations of the Federal Electric Railways Commission, the country is at least to be congratulated that a report containing these statements with respect to valuation has been issued, signed, among the rest, by Mr. Philip H. Gadsden, of the United Gas Improvement Company, representing the American Electric Railway Association, and Mr. Charles W. Beall, of Harris, Forbes & Company, representing the Investment Bankers’ Association of America. This fact alone constitutes the sharpest kind of a rebuke for the extravagant claims usually put forward by street railway companies with respect to the value of their property in their efforts to negotiate service-at-cost agreements for the purpose of securing an effective guaranty for


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their outstanding issues of stock and bonds. It will be quite surprising if these portions of the commission’s report are heavily stressed by the electric railway companies in their serviee-at-cost propaganda.
THE BATE OF EETTXRN
Another fundamental element in a service-at-cost contract is the “agreed return upon capital.” The commission does not go into details about the rate of return, and makes no effort to be specific as to what that rate should be. It does state emphatically, however, the fact that “the electric railway industry as it now exists is without financial credit,” that “the electric railways must expand to meet the growing needs of their communities” and, therefore, that “the first essential is to restore credit in order to obtain necessary new capital for the extension and improvement of service.” The commission says:
It is an axiom that property devoted to the public use should secure a fair rate of return. Where money is represented by bonds the return is a part of the contract and is not changed during the life of the contract. Where capital is represented by stock the rate of return may vary according to the operating or financial conditions, and naturally it should compare favorably with the income upon other classes of investment. The undisputed testimony proves that the rate must be certain as well as reasonable to attract capital and that the absence of either of these essentials will frighten the investor away. It may be a lamentable fact, but it is nevertheless true, that most of the electric railways are obliged to go to markets outside of their territory to secure new capital; and under existing circumstances the investor is no longer willing to place his money in speculative properties.
The commission then goes on to express the opinion that “a fixed franchise fare fails to meet the requirements of the industry.” In its discussion of the service-at-cost contract, al-
ready quoted, it is “inclined to think that the assurance of an automatic adjustment of fare will do more than anything else to restore the confidence of the investors.” Discussing specifically the “cost of new money,” the commission says;
The destruction of capital incident to the world war and the unprecedented demand of the government and industries for money resulted in largely increasing the interest rate for loans. More attractive loans are now absorbing money available for investment, leaving the electric railways where, even with credit restored, they would have to compete in the money market with prosperous and unregulated enterprises.
From these statements it will appear that another dream of the companies ’ valuation experts has failed to get recognition as a robust reality. We see nothing here about the doubling of the rate of return on account of the decrease in the purchasing power of money. We do not find any sanction for the theory that the “wages” of capital should be increased to correspond with the increase in the wages of labor. The commission even intimates that rates of interest on outstanding bond issues are to be left undisturbed! It does not even specifically recommend that the rate of return upon the existing investment represented by capital stock should be increased to the level required to attract new money for necessary additions, betterments and extensions in these abnormal times, although it does intimate that the rate of return on capital represented by stock may “vary” according to conditions, and should “compare favorably” with the income upon other classes of investment. It is emphatic, however, that the rate of return must be certain as well as reasonable to avoid frightening the investor away. On the whole, it is not quite clear how the commission would handle the matter of the rate of return.


1920]
SERVICE AT COST
769
THE CLEVELAND SEVEN PER CENT RETURN PROCEEDING
In this connection, certain things that have happened in Cleveland recently are highly significant. In the summer of 1919, just about the time when the Federal Electric Railways Commission commenced its investigation, the Cleveland Railway Company demanded an increase in the “wages of capital” as a condition of its consent to come to a settlement with its striking employes on the basis of higher rates of pay for labor. The company asked that the rate of return on its capital stock be increased from 6 per cent to 7 per cent. This issue was not subject to arbitration under the terms of the Tayler franchise, but, as a part of the strike settlement, the city council agreed to submit the question to a board of arbitration constituted in the same way in which boards of arbitration have from time to time been appointed under the terms of the contract. This proceeding was referred to in the testimony before the commission, but the board of arbitration did not file its report until December, 1919, about two months after the close of the commission’s public hearings. The arbitrators, by a majority vote, awarded to the Cleveland Railway Company the 7 per cent return for which it had contended. This required the passage of an amendment to the service-at-cost ordinance, and this amendment became subject to the referendum. For the first time in the history of service at cost in Cleveland, an award by a board of arbitration was submitted to popular vote, and on August 9, 1920, less than two weeks after the Federal Electric Railways Commission had completed its report to the president, the electors of Cleveland rejected, by a vote of 35,964 to 10,660, the recommendation of the arbitrators that the rate of return on
the stock be increased to 7 per cent. The case of the Cleveland Railway Company is quite exceptional, for the reason that the company’s capital value is represented by some $28,723,-500 of capital stock as against only $5,495,000 of mortgage bonds. One of the chief arguments against the increase of 1 per cent in the rate of return upon the capital stock was that it involved the payment annually of $287,000 additional return to the old stockholders as a means of getting the “interest” rate up to a point where it would enable the company to sell more capital stock at par. The language used by the Federal Electric Railways Commission in its report, while not entirely clear, would seem to indicate that, in its opinion, the rate of return on stock already outstanding should be increased so as to keep the market value of the stock up to par.
From any point of view these recent developments in Cleveland seem to mark the beginning of a breakdown in the service-at-cost plan “in the house of its friends.” From the company’s point of view it is claimed that the refusal of the people to authorize an increase in the rate of interest makes the sale of additional securities under the Tayler plan difficult, if not impossible. From the public point of view, the company’s insistence that the original contract should be amended so as to benefit the old stockholders, who put in their money under an agreed rate of return, indicates that after all a service-at-cost contract, like any other sort of a franchise contract, is not regarded as enforceable when any of its important conditions go against the company.
THE FLEXIBLE FARE WITH NO MAXIMUM
Another main feature of service at cost as recommended by the Federal commission is a flexible fare without


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[December
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any maximum limit. The Tayler plan in Cleveland includes a top limit for the fares, but in most of the service-at-cost plans that have since been adopted, including those in Cincinnati, Youngstown, Montreal, Boston, and on the Bay State lines, no maximum fare is prescribed. In fact, it is the theory of service at cost as understood by the electric railway companies, and as recommended by the commission, that the fares shall be adjusted from time to time to meet the full cost of service, no matter how high they may have to go to do it.
The Montreal Tramways Commission, by which the new Montreal ser-vice-at-cost contract was prepared, entered upon its work early in 1917. At that time I recommended to that commission the principle of the flexible fare, saying that the cost of service should first be determined, and that then the rate of fare should be fixed to meet it. Conditions have been changing very rapidly. Even three years ago it hardly seemed possible that in a great urban community the full legitimate cost of surface street railway transportation could become so great as to exceed the reasonable worth of the service to the car riders. Since then, however, costs have been mounting so rapidly that it has become a very serious question in many communities whether a service-at-cost plan wholly dependent upon the fare payers for its revenues is everywhere practicable, unless the fundamental usefulness of the street railway as a public utility is to be sharply curtailed.
THE POLICE POWER ABROGATED
The Federal commission’s report does not suggest any limitation whatever upon the rates of fare to be charged except the cost of the service. It is apparent, therefore, that with such a
service-at-cost plan in effect the electric railway companies would be definitely relieved of one of the fundamental limitations laid down by the United States supreme court, namely, that the rates charged for public utility service must never be more than the service is reasonably worth, even though the utility is thereby kept from earning a full return upon the investment. Until recently, thereason-able worth of the service from the point of view of the consuming public has been taken care of by the fixed five-cent maximum fare, and, under commission control, the worth of the service has held the status of a more or less hypothetical and sometimes entirely forgotten issue. Because it has been generally assumed that under all ordinary conditions the necessary cost of utility service could not be more than the worth of the service to the individual patrons of the utility, commissions and courts, before the war, were not called upon very often to apply in practice this fundamental limitation upon street railway charges. Now that the time is ripe for its application, the adoption of the service-at-cost principle, without any maximum limit on fares, takes the companies out from under the exercise of the police power and places the public in a position where it may suffer incalculable harm from excessive transportation charges.
SERVICE AT COST AND PUBLIC OWNERSHIP
The Federal commission, though recognizing that the service-at-cost contract is “ in the experimental stage,” strongly recommends it, and minimizes the importance of the criticisms that have been made against the plan, deeming these to be “more theoretical than real.” At the same time, the


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1920]
commission indicates that it is decidedly averse to the adoption of the policy of public ownership and operation. A properly protected service-at-cost plan, under conditions that are likely to arise in many communities, may be highly advantageous as a stop-gap on the way to public ownership, but from the point of view of efficient government the successful administration of a service-at-cost contract can hardly be maintained in the long run with any less degree of technical skill, courage, initiative and political independence than is required for successful public operation of a municipal street railway system. The one thing that will sometimes make a service-at-cost contract more practicable than immediate public ownership and operation is the fact that it enables the municipality or the state to avoid, for the time being, the necessity of raising the necessary funds for the extinguishment of the private interest in the local transportation system. In many cases this initial financial difficulty is likely to be controlling, but a service-at-cost plan that merely reserves to the municipality the right, in words, to take over the property at a fixed valuation will ultimately fail to protect the public interest unless it is coupled with definite and practical measures by which the city can readily exercise this option whenever it desires to do so.
In this connection it is noteworthy not only that the commission is opposed to public ownership, but that its recommendations are likely to be used to make public ownership more difficult in the future, instead of less so. It says that “public confidence will be immeasurably strengthened through the valuation of the properties, because the figure that is established . . . fixes, at least, the minimum
price which the public will be obliged to pay if, at some future time, it should
decide to purchase and operate the property.” (Italics are mine.) As already pointed out, the commission indicates its opinion that original cost is a primary factor in finding value for rate-making purposes. The commission’s recommendations are not very well knit together. They show the evidences of piecemeal construction and compromise, where clarity is quite essential. I do not doubt that the commission’s endorsement of service at cost will be used as an argument for postponing public ownership while “sewing up” the future against its dangers—to the companies.
SERVICE AT COST AND STATE CONTROL
Another rather remarkable inconsistency is shown in the commission’s pronouncements on the subject of state versus municipal control of utilities. It sees no “insuperable objection to a large wide-awake city having exclusive jurisdiction over the rates and services of public utilities,” but in general it favors ultimate state control, based upon some plan of cooperation between state and local authorities. Again it says: “Where the street railway company operates wholly within one city there can be no insuperable objection to exclusive municipal control when the people are ready and willing to exercise it.” (Italics are mine.) It then goes on to quote from Secretary Baker’s testimony about Cleveland’s experience, as if that were an illustration of its point. As a matter of fact, the Cleveland Railway Company is not confined to the city limits of Cleveland, but operates in several adjoining municipalities. When we turn again to the service-at-cost discussion, we find the unequivocal statement that “in cases where the electric railways operate in more than one municipality
2


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and between different municipalities, such service-at-cost contracts can properly, in our judgment, be made only with the public service commission, and in such cases the provisions of the contract should apply in any particular community to the system as a whole rather than to its individual parts.” That knocks out municipal control in Cleveland! It makes it impossible not merely in New England, New Jersey, and upstate New York, but in Pittsburgh, Detroit, Milwaukee, Minneapolis, St. Paul, the Kansas cities,
[December
and I fancy in almost every city in the country, big or little.
Thus we see that the corollaries of the recommendations and suggestions of the Federal commission, so far as the service-at-cost plan is concerned, lead us into a labyrinth of doubt upon every subject except the guaranty of capital and the restoration of the investor’s confidence in street railway securities—and even there, although the general purpose is clear, we are not altogether sure of the practical result.
NATIONAL MUNICIPAL REVIEW
THE EFFECTS OF TAX LIMITATION IN
OHIO CITIES
BY RAYMOND C. ATKINSON
Western Reserve University
Ohio still retains the uniform general property tax with a rigid tax limitation. Cities face financial ruin while rural and urban groups
wrangle in the legislature. ::
Probably the financial problem facing American cities has arisen in its most acute form in Ohio. Ohio cities have for ten years been laboring under the handicap inflicted by the so-called Smith 1 per cent law, which throttles down the tax revenue of municipalities to a point far below the present requirements of good government.
THE SMITH ONE PER CENT LAW
The Smith law was enacted in 1910 when the taxation machinery of the state was undergoing a general overhauling. Prior to that time property had been assessed at only a fraction of its actual value. In the reassessment of 1910, however, an attempt was made to secure a 100 per cent valuation of real estate and to force out of concealment a larger amount of personal prop-
erty. To reassure the taxpayers the legislature enacted a tax limitation of 1 per cent. Within the prescribed 1 per cent levy the greater part of the tax revenue of local governments and a considerable share of the state’s income were to be obtained, with the exception that an additional levy might be imposed to meet interest and sinking fund charges upon debts previously incurred or which might thereafter be incurred by popular vote. As though this restriction was not sufficiently severe, the legislature inflicted a further check upon municipal extravagance. The total receipts of cities from taxation for 1911 were not to exceed the amount collected in 1910, and only a slight increase could be made in 1912 and 1913 after which the total was to remain stationary. Such a stupid attempt to stop the wheels of municipal progress


1920]
THE EFFECTS OF TAX LIMITATION
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can scarcely be imagined, yet it remained upon the statute books of Ohio for three years. Yielding to the pressure of city officials the legislature finally repealed that particular provision in 1913, but the percentage limitation continued in force. A further modification was also secured which enabled cities by popular vote to raise the maximum tax limit to 15 mills. Beyond that point the tax rate might not go, except to meet certain emergencies such as floods and epidemics.
Fifteen mills may seem an adequate provision for municipal revenue, but it must not be forgotten that the city is only one of several agencies of government among which the 15 mills is parcelled out. The apportionment of the tax rate is entrusted to a county budget commission consisting of the auditor, treasurer, and prosecuting attorney, all county officials. The requirements of the state are first provided for, and needless to say, the budget commissioners see that the county receives second consideration. The requests of the school board usually come next in the order of preference, while the city, library board and other agencies of government have to be content with what remains.
HOW TAX LIMITS WERE EVADED
For a time cities sought to overcome the handicap under which they labored by failure to provide for the retirement of their bonds. Debts were refunded as they fell due. In this way deductions for sinking fund charges were kept at a minimum, and the revenue available for operating purposes was increased. Such a policy must naturally be short-lived. It was not only bankrupt finance, but in direct conflict with a clause of the state constitution as well. This practice continued, nevertheless, until the state supreme
court in 1916 definitely declared that full provision for interest and debt retirement took precedence over all other expenditures. In 1917, the first year that this requirement was observed, the operating revenue of the city of Cleveland derived from the general property tax fell off almost one-third, and there was a corresponding increase in the levy for the sinking fund. This resulted in a reduction of about one-fifth in the total operating revenue of the city. According to statistics published by the state auditor in 1917, if all cities had met the interest on their bonds and the entire cost of debt retirement from taxation, debt charges alone would have exceeded the total tax revenue of the 80 cities of Ohio by $180,000. Naturally full compliance with the supreme court’s decision was impossible. Cities were confronted with the alternative of refunding their bonds as they fell due or borrowing money for running expenses. The large cities compromised by doing both. In that way immense floating debts were incurred which cities were utterly incapable of paying, and the legislature was forced to authorize the issuance of deficiency bonds.
Other factors also played a part in the creation of this situation. In the first place the assessment roll for the general property tax did not keep pace with expanding governmental needs. Revaluations were infrequent and a 100 per cent assessment was seldom actually secured. Another important factor was the accelerated growth of municipal activities after 1910. In many instances the state itself imposed additional burdens upon cities. Large expenditures for water purification and sewage disposal were ordered by the state board of health. Heavy debts were also incurred for street improvements and public buildings, thus in-


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[December
774
creasing the fixed charges of local government. Finally a modification of the state liquor license regulations reduced revenue from that source.
FLOATING DEBTS PERIODICALLY FENDED
As a result of this combination of circumstances Ohio cities have for sev'eral years been amassing floating debts which the legislature has periodically permitted to be funded with deficiency bonds. Cleveland began to run behind as early as 1915, even before the supreme court decision as to sinking fund requirements. The other principal cities have one by one fallen into line. In Dayton the city manager by vigorously cutting expenditures avoided the difficulty until 1917. Springfield has escaped with a deficiency of only a few thousand dollars, while Sandusky has an actual surplus. Most of the non-manager cities have been less fortunate. At the close of 1919, Cleveland had outstanding $7,-000,000 of deficiency bonds, almost one-tenth of its total debt, and has since been compelled to issue $5,750,-000 additional bonds to meet running expenses. (The estimated tax income of the city for operating purposes will scarcely more than cover the cost of the police and fire departments alone.) In Cincinnati a floating debt of $1,340,000 was funded in 1917, and a deficit of about $3,000,000 is anticipated for the present year. Columbus was forced to issue $560,000 of deficiency bonds in 1919, but hopes to live within its income in 1920. In Toledo, a more rapidly growing city than Columbus, $850,000 of deficiency bonds have already been accumulated, with the likelihood of a large floating debt at the close of the current year. Nor is this condition confined to the larger cities alone. Some of the smaller
municipalities have deficits which are almost as burdensome in comparison with their tax revenue.
It might be supposed that such financial straights would lead to greater administrative efficiency. Certainly the necessity of economy is apparent. It is very doubtful though whether there has been any such result. True there has been a vigorous paring of governmental services, but that the work which is done is more efficiently handled is extremely unlikely. The spectre of bankruptcy does not necessarily prevent waste. The very impossibility of living on the existing income together with the recognized necessity of reducing services exerts a blighting influence. A hopeless, don’t care attitude on the part of officials is not unnatural. Furthermore the lack of funds furnishes a ready excuse for inefficiency which the citizen cannot easily refute.
VOTERS DIVIDED ON RELIEF TO BE PROVIDED
Confronted by this situation, what remedies have been applied? The truth is that only makeshift measures have thus far been adopted. The Smith law has from the start been attacked by the larger cities which realized the impossibility of performing their functions with the limited income available. The act has, on the other hand, been popular with the rural element which has a majority in the legislature. The country population cannot understand the immense financial requirements of the greater cities, and attributes their difficulties to extravagance, inefficiency and a failure satisfactorily to administer the general property tax. There is also a widespread feeling that a tax of 15 mills on a 100 per cent valuation of real estate is heavy enough and that additional


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THE EFFECTS OF TAX LIMITATION
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revenue should be obtained from other sources. Consequently until the present year all attempts to break down the Smith law limitations have met with failure.
The validity of the claim that the burden upon real estate should not be further increased has been recognized by tax reformers. The financial difficulties of Ohio cities are not simply the result of tax limitation but of inadequate sources of revenue. How sufficient income can be secured through the general property tax without at the same time overburdening realty is a problem which has not been solved. Ohio relies chiefly upon the general property tax. In fact, it cannot do otherwise so long as the constitution remains unaltered, for it specifically provides that all taxation shall be by uniform rule. The attack upon the Smith law has, therefore, involved the question of classification of property and a revision of the whole taxation system of the state. The fight for classification thus far has not been successful. A classification amendment was submitted to referendum in 1918 and again in the fall of 1919. In 1918 it received a majority, but was later invalidated by the state supreme court. A second amendment, approved at the same election, according to the court, conflicted with the principle of classification, and inasmuch as the second measure obtained a larger popular majority the classification amendment had to give way. Another proposal was squarely defeated in 1919. Throughout the fight the farmers have been hostile to the plan and the state grange has led the opposition. The idea of uniformity in taxation seems to have a firm hold upon the rural electorate, in spite of the manifest injustice of the general property tax to the farmer in practice. A general feeling evidently prevails that the
separate taxation of real and personal property would result in even greater discrimination against the former. Whenever the general property tax has been attacked, the farmer has parried with talk of more stringent administrative provisions to force intangibles out of hiding. It would seem as though Ohio, at least, had experimented sufficiently with tax ferret legislation. Until the farmer changes his views, the financial ailments of Ohio cities cannot saisfactorily be treated.
The legislature has shown little disposition to work out a solution, although the problem has been before it for several years. Investigations have been made and cities have been allowed to explain their plight, but there is no painless method of extracting revenue for the government, and legislators shy at measures which too obviously increase the tax burden. Until thejlast session the legislature confined itself to temporary expedients in the form of acts authorizing the funding of current debts. It was hoped that these measures would tide cities over the war period. The continuance of high prices after the armistice, however, made it clear that a day of reckoning must come. Cities cannot long be financed with deficiency bonds.
Unfortunately the legislature and the governor are of opposite parties. The governor is a Democrat, while the Republicans have a majority in both houses of the assembly. Under such conditions little co-operation can be expected. At the opening of the last session the governor was glad to urge upon the legislature the solution of the taxation question, but quite unwilling to present a plan of his own. He probably felt that it was good political strategy to allow the Republicans to demonstrate their inability to handle the problem and to cast the onus upon his opponents. The assembly lacked


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NATIONAL MUNICIPAL REVIEW
[December
competent leadership and floundered sadly. When the session closed the governor denounced the failure of the legislature to reconstruct the tax system, and the Republican state committee retaliated by condemning the lack of leadership on the part of the governor. Thus the buck was passed.
THE GABDNEB ACT A MAKESHIFT
In spite of its shortcomings the session was not entirely fruitless. The enactment of a heavy automobile license tax and a new inheritance tax from which the local government receives one-half helps considerably toward replacing the former liquor tax. The way was also opened by which cities may vault over the Smith law limitations. A new measure, the Gardner act, allows taxing districts by popular vote to place their interest and sinking fund charges outside the 15 mill limit. A number of cities are now preparing to submit the question to referendum. If approved it will grant much-needed relief to municipal treasuries by permitting a considerable increase in the rate of levy for operating expenses. In many cases it will double the operating levy. The general property tax rate will be very much higher and the burden upon real estate decidedly severe. For that reason some difficulty may be encountered in securing popular approval of the change.
The Gardner act is only a makeshift remedy at best, for Ohio must soon overhaul its entire system of taxation. A higher general property tax rate will inevitably cause complaint and may hasten a thorough revision of the system, but before this can be undertaken
a constitutional amendment will be necessary. Considerable sentiment has developed in recent months in favor of an income tax. It has the endorsement of the state grange and was pressed by the rural element in the last session of the legislature, but the movement soon struck a. snag. Banking interests were unwilling to accept an income tax so long as personal property remained subject to the general property tax. It was feared that an income tax might force the disclosure of bank deposits, and thus expose them to the high general property tax levy as well, which would almost be confiscation. This encounter merely serves to re-enforce the conviction that a classification amendment is a fundamental part of any constructive tax reform in Ohio.
While the prospect of modernizing the taxation system is considerably brighter, it is only because the financial condition of municipalities and school districts has become intolerable. The ten-year struggle of Ohio cities to live upon an inadequate income has been little less than tragic. If anything could prove the utter folly of tax limitations, Ohio’s experience with the Smith one per cent law ought to be sufficient. The rural legislators in their kind endeavor to save cities from their own rapacity have nearly bankrupted a number of municipalities and have impaired services in many others. One need not be a socialist to realize the futility of such efforts. The activities of a city must inevitably grow more rapidly than the general property tax duplicate, and if progress cannot be bought with current revenue it will be purchased with bonds against the future.


NEW MORTGAGES FOR OLD
BY ARTHUR C. COMEY1 Cambridge, Mass.
The individual, short term, mortgage is antiquated. Is it not possible to stabilize building loans at low rates through a Federal mortgage bank? :: :: :: :: :: :: :: ::
Houses must be paid for. As the prospective owner seldom has more than a fraction of the cost, the balance must be borrowed. To insure an adequate supply of funds to loan requires modern methods of financing. Mortgages should be written for the full duration of the loan and should be steadily reduced by periodic payments. All house mortgages should be pooled under a mutual guarantee, and a single form of safe, easily negotiable bond issued to the lender.
BORROWING MONEY FOR HOME BUILDING
In this way may be eliminated one of the principal bugbears of house building, the difficulty of finding funds with which to pay for dwellings, though in the present acute situation it is hardly the most serious one. Whatever the reforms we may hope will be carried through in the social relations of home ownership, either independent or co-operative, it is evident that at the time of construction the majority of purchasers will be unable to pay down more than a minor part of the total cost. The rest must be loaned, in the expectation, let us
1 Member, until its abolition, of the Massachusetts Homestead Commission; fellow, American Society of Landscape Architects; member, American City Planning Institute; secretary, Massachusetts Federation of Planning Boards.
hope, that it will be gradually paid back as the occupant finds himself able to increase his investment.
Note that this result is a most worthy one and a fundamental gain to society as now constituted. For if we have individual wealth at all surely the soundest system is that in which it is most evenly divided among all citizens. This cannot be brought about simply by the general holding of stocks and bonds, even government bonds; it involves the actual responsibility for real property. Aside from personal effects everyone uses at least three classes of property; that which shelters him, that which carries him and his goods to and fro, and that which is comprised in his means of livelihood. With his ownership in the two latter relatively untried fields this article is not concerned. Home ownership has had a much longer and more general try-out. Whether individual or co-operative it is peculiarly appropriate for the initial accumulation of the individual’s share in the world’s riches; for by investing in a home one “loans to himself,” eliminates all disparity of interest on his investment, and is in a unique position to conserve and actually enhance the value of his investment through caring for his property. The political and social values arising in a community of home owners need only to be alluded to to be appreciated.
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NATIONAL MUNICIPAL REVIEW
[December
As before stated the prospective owner now and for some time past has found difficulty in borrowing. This difficulty arises largely from the antiquated machinery still in vogue to effect such loans, namely the individual, short term, one payment mortgage. Certain agencies, notably the building and loan associations, or co-operative banks, as they are known in Massachusetts, loan on small houses for a long term and require periodical payments, thus reducing the loan gradually. But their loans are on an individual basis, with the attendant individual risk to the bank, and correspondingly high rates, and their funds are at present inadequate to finance a real building era.
One class of mortgaged property is, however, breaking away from the old system and under federal organization is securing most of the benefits that are to be obtained from up-to-date methods. The Federal farm loan act, despite certain seemingly unnecessary complicating provisions, has stabilized loans on farm property at a lower rate than previously obtained and has ensured in all ordinary times an adequate supply of funds, besides giving the investor a much more satisfactory security than the old farm mortgage, in the form of a bond that is easily negotiable.
Its working is indicated in some detail in the accompanying diagram.
The writer does not believe that two such dissimilar types of property as farms and houses should mutually guarantee loans. In fact, the volume of business that the Federal land bank is already doing, combined with that of a corresponding Federal mortgage bank for houses, would be so great that the setting up of a separate organization will involve little or no waste, while effecting many minor benefits.
The subject is so vast and intricate that it was the hope of those of us in the United States Housing Corporation who became interested in the subject at the close of the war that a joint high commission of senators, representatives and others would be empowered to make a year-long study before reporting a finished scheme for enactment. Along these lines Senator Kenyon introduced a bill in the 65th Congress, third Session (S. 5581), and a similar one in the 66th Congress, first Session (S. 168), but both died without action. Meanwhile, other agencies were seeking direct assistance, and several bills were quite far advanced during 1920, but none were free from grave defects and none were enacted.
THE NECESSARY MECHANISM
The vital points of a modern mortgage mechanism may be stated in a few lines:
Mortgages for the Full Duration of the Loan. Nothing could be worse than the present two- or three-year system, which subjects the borrower to perennial fear of foreclosure.
Steady Reduction of the Loan so that it will be wiped out at the end of the term. This is both an incentive to saving, and by keeping pace with possible depreciation permits a greater initial loan.
Pooling of All Mortgages Under a Mutual Guarantee and Issuing Bonds. This both reduces the risk to the investor and therefore the rate of interest, and attracts a much wider field of investors, to most of whom a liquid investment, capable of being turned into cash on the street, is now considered almost an essential. Thus not only would more funds be available for building, but owing to the reduced competition for money the interest rate would be still further lowered.


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1920]
Farm loan bonds are on a 4f to 5 per cent basis, a rate which the proposed bonds should easily secure.
To insure success the primary responsibility should be lodged in a group of Federal mortgage banks. Borrowers would usually find it advantageous to utilize intermediary agencies, either already in existence, such as the building and loan associations, or new limited dividend or co-operative associations or simple borrowers’ associations. In order that the banks may eventually be on an entirely self-supporting basis borrowers should be required to take up stock equal to say 5 per cent of their loan. This would also increase their sense of participation in the organization. At the outset the government would do well to supplement the initial subscriptions so as to create a large capital for initiating the project. A system of four banks, with branch banks, would avoid local pressure and yet meet the needs of the four principal sections of the American building world.
The bonds should be available for government deposits and for purchase by Federal reserve banks, thus restoring mortgage loans to as favorable a position as that enjoyed by most other forms of investment. Those borrowing 60 per cent of the value of their house should pay but little more than the interest rate on the bonds. On new houses, however, 70, 80 per cent, or even higher might be loaned at sufficiently higher rates to meet the increased risks, thus overcoming a further obstacle in the way of new construction for those with little saved up?
Supervision should be centralized in a United States home loan board, representing the president, the treasury, and the department of labor, so as to be uniform and above question. Proper standards of housing should be
ensured both for the immediate protection of the loans and for the conservation of social values, which effect society over a period of years and therefore the ultimate value of the loan property as a whole. The bank inspector should make a single inspection for all purposes, preferably under the general direction of the department of labor’s representative; the establishment of the proposed permanent housing bureau would fit in perfectly to such a scheme.
Many other details must, of course, be worked out before the project can be made “water-tight” and launched. The following outline will indicate most of those points that have seemed important:
Summary op Essential Features op Proposed Federal Mortgage Bank
Board. Three governors, one appointed by the president, one by the secretary of the treasury, and one by the secretary of labor, and paid by the government.
Appointee of secretary of labor to have special duties as to character of housing.
Office. Head office in Washington.
Four Banks. New York for New England, New York, Pennsylvania and New Jersey. Atlanta for Delaware, Maryland, District of Columbia, South Atlantic, Gulf States, Kentucky, Tennessee and Arkansas. Chicago for Middle Western states, including Missouri, Iowa and Minnesota. Denver for Texas, Oklahoma, Kansas, Nebraska, and Dakotas and west thereof.
Capital. $20,000,000 in shares having a par value of $5 each, to be offered to the public for subscription; the government taking all stock not subscribed in thirty days. Capital is increased by requiring all borrowers to subscribe and pay for stock equal to 5 per cent of the amount of their loans, which stock is returned when loans are paid off.
Character Limitation, Cost of Loans, etc.
1. No loans at basic rate of interest to exceed 60 per cent of the appraised value of the property. On new houses only loans for 70 per cent, 80 per cent, or 90 per cent to be at higher rates com-


NATIONAL MUNICIPAL REVIEW [December
780
mensurate with risk. No loans to exceed 75 per cent to other than states, municipalities, housing societies with limited dividends and owners of lots for erecting houses for their own occupancy.
2. Basic interest charge not to exceed by more than 1 per cent the interest paid on the last issue of bonds made by the bank.
3. No loans to be for less than five years nor more than thirty years. No loans on property already built to be for more than twelve years.
4. All loans to be amortized at a rate which will wipe them out in the life of the loan.
5. All loans to be first mortgage upon income residence property already built or to be built with the aid of the loan.
6. No loans to be made unless property meets adequate housing standards of safety, durability, sanitation, convenience, and open spaces. A single inspection covering all factors to be made by bank inspectors under regulations of department of labor member of board.
7. Registrars to be appointed and paid by the government, to act as custodians and trustees of the first mortgages held as collateral for the issue of bonds.
8. Substitution by cash, United States government bonds or approved mortgages of same type permitted.
9. No loans to be made in any state where the mortgage laws are not adequate to protect the loans. Such laws to be passed upon by the officers of the bank with the advice of the attorney general of the United States.
10. The outstanding bonds at any time shall not exceed twenty times the capital and surplus of the bank.
11. No issue of bonds shall be permitted in excess of the value of first mortgages owned by the bank, except that at any time, in order to take advantage of favorable money market conditions, the bank may issue bonds not covered by the mortgages to an amount not exceeding its capital and surplus. The proceeds of such bonds to remain as cash or be invested in govern-
ment securities until converted into mortgage loans.
12. No loans shall be made in any one city to exceed one-tenth of the outstanding bonds.
13. Torrens titles or other titles acceptable under state laws will be accepted by the bank.
14. The borrower will be required to pay the cost of the appraisal, title search and recording fees.
15. All property offered for loan shall be appraised by a board of three appraisers appointed by the bank in any district. Said board of appraisers to be under bond to the bank and liable to fine and imprisonment for wilful overvaluation. The appraisal shall be subject to review by the bank at the expense of the bank.
16. No loan or loans to any individual shall be in excess of $1,000,000 or less than $500. No loans shall be in excess of $6,000 per family housed.
17. The stock of the bank shall carry a double liability.
Other Provisions. A reserve fund shall be created by appropriating 25 per cent of earnings to reserve until said reserve fund equals 20 per cent of the capital and thereafter by setting aside 5 per cent of earnings to reserve.
When the reserve fund reaches 20 per cent, 25 per cent of all stock subscriptions received thereafter shall be used to retire the original stock subscriptions of $20,000,000, so that after a period of years the entire stock of the bank shall be owned by borrowers from the bank, who will receive by way of dividends the equivalent of a rebate, thus procuring the loans at a minimum cost.
The government-owned stock shall not be entitled to dividends.
The bonds of the Federal mortgage bank shall be available for the investment of trust funds, for security for public deposits and may,' be purchased by the Federal reserve banks. f
The bonds of the Federal mortgage bank shall be free from all federal, state or municipal taxes.


CITY MANAGER MOVEMENT
PROGRESS OF MANAGER PLAN IN ONE HUNDRED EIGHTY-
FIVE CITIES
By HARRISON GRAY OTIS
Being the sixth installment of short stories compiled by the secretary of the City Managers’ Association. The next will be “Reports from Managers in the Prairie States.” :: :: :: :: ::
VI. BOROUGH, TOWN, AND CITY MANAGERS “DOWN EAST.”
“Down East” is a general term, and its meaning depends upon where you are standing at the time. As applied to this series, it includes New England, New York, and Pennsylvania, with an appendix for Canada, whose four manager municipalities are in Quebec and New Brunswick, not far from the New England border.
NEW ENGLAND
New England holds the palm for conservatism, as prior to 1918, Norwood, Massachusetts, with a modified manager charter, was its only heretic to time-honored political traditions. At present, there are only five New England managers, with a sixth scheduled for appointment in January, 1921.
MASSACHUSETTS
Waltham. Population, 30,891. Commission-manager charter effective January, 1918. Henry F. Beal, the second manager, succeeded C. A. Bingham, January, 1920; salary, $5,000.
Mr. Bingham has furnished the following summary of achievements:
Salaries and wages increased from 1917 to 1919 54 per cent; materials increased 82 per cent; tax rate 8 per
cent. Every street in the city oiled and practice of assessing abutters for $10,-000 discontinued. Two new schools costing half a million built in 1919.
Street department combined with sewer, water and engineering departments into a public works department, eliminating $1,800 in salaries and saving many thousands in combining available equipment and men, besides assuring permanent force of experienced men to be used on any work; $3,200 saved on early contracts for street oils for 1918 and $5,000 for 1920 contract.
First municipal bulletin by employes initiated and continued monthly to an edition of sixteen pages or more. Departmental bowling leagues, superintendents’ dinners, and other forms of recreation used to bring about co-operative spirit between city officials.
Seventy thousand dollars of government food and supplies sold the citizens at exact government prices, being the first city in New England and third in the country to do this; $3,000 saved the citizens on one carload of flour alone.
Water consumption reduced 33 per cent by meters and leak surveys, and a $300,000 new supply indefinitely postponed.
Branch library established and a series of lectures on municipal subjects by city officials carried on.
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Contracts for practically entire supplies of 1920 materials closed in 1919 at a saving of thousands, in addition to securing early deliveries. Cash discounts continued to more than pay for entire purchasing force.
Budget of $1,250,000 passed one week after the close of the financial year.
Community street dancing and free movies successfully carried out. All city officials and employes made to understand that any success in the various departments was caused by their help, and citizens were encouraged in coming to the city hall and being personally conducted through any and all departments. City hall switchboard used as complaint bureau and also for outgoing inquiries as to the condition of municipal service rendered in various districts.
Mr. Beal is 41 years old, trained in engineering, and served as director of public works prior to his promotion to the managership.
Five Years of Satisfaction
Norwood. Population, 12,627. Modified manager charter effective January, 1915. William P. Hammers-ley, the second manager, was appointed to succeed C. A. Bingham, March, 1918; salary, $4,000. Mr. Hammers-ley reports for the year 1919:
Increased our surplus in the public service department from $23,700 in 1918 to $33,700 in 1919;
Granted 21 per cent salary increases to heads of departments; 25 per cent to mechanics, and 34 per cent to laborers;
Increased local tax rate but 10 per cent, while the state tax was increased 15 per cent and the county tax 35 per cent;
Completed $300,000 high school building;
Established laboratory for analysis of milk and foods and maintained regular inspections.
A recent letter states:
“The town of Norwood at its annual
town meeting held March 11, 1920, passed unanimously every item in budget and warrant, not one dissenting vote being cast. This plainly shows the attitude of the citizens toward the ‘ manager plan.’ The meeting was the most harmonious ever held.”
Mr.Hammersley is 44 years old, with a long experience in municipal engineering. His salary has been increased three times during the past two years.
Mansfield. Population, 6,010. The commission-manager plan as provided by state law was adopted at a town meeting July 12, 1920, by vote of 508 to 255. Five selected men will be elected in January, 1921. They will appoint a town manager.
MAINE
City Finances Put on Sound Basis Auburn. Population, 16,985. Commission-manager charter effective Janu-ary, 1918. Edward A. Beck, the second manager, was appointed February, 1919, to succeed Harrison G. Otis. He was followed in September, 1920, by Horace J. Cook; salary, $4,000.
The tax rate for the year 1919 was increased from 23§ mills, the lowest of any city in the state, to 31 mills, so as to permit liquidation of a large inherited floating debt and much needed public improvements.
Year’s expenditures $61,032 under appropriation, which included a $17,003 emergency reserve fund. Revenue exceeded expenditures by $58,551. Cash balance $39,168. First year in over twenty which closed without a deficit. Eliminated floating debt in part from current revenues, the remainder by funding, leaving the city free from floating debt at close of year for the first time in its history.
City’s net debt (liabilities less quick assets) reduced $14,636 after bonding for improvements, second successive


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year compared to an increase each year since 1910, with an increase of $21,179 the last year under the old form of administration.
Municipal proprietary interest (all resources less liabilities) increased $76,-349.45, or over 12 per cent.
Civil service for police and fire departments made operative.
Improvements in health department with plans for a full time health officer.
Establishment of highway patrol system. Highway maintenance improved at a net expense of $9,256 under preceding year. Year’s highway construction included over two and one half miles, or approximately one half of city’s entire former paved mileage.
Stone crusher plant established to furnish material for future construction.
Plans for establishing city blacksmith shop completed.
Police alarm system installed.
Plans under way for new modern fire alarm equipment.
Street lighting expense reduced approximately 10 per cent.
Plans for an office building to provide for all city offices under one roof.
Mr. Beck is 34 years old and a graduate civil engineer. He served as borough manager of Edgeworth, Pennsylvania, and city manager at Goldsboro, North Carolina, prior to his appointment at Auburn. He was promoted to his fourth city, Lynchburg, Virginia, in September, 1920, Mr. Cook being advanced from public service director to manager.
CONNECTICUT
West Hartford. Population, 8,854. Manager plan adopted by vote at the town meeting July, 1919. B. I. Miller, manager; salary, $4,000.
Mr. Miller is 51 years old, has had a general business training, and served
eight years as first selectman of an adjoining town prior to becoming manager.
On November 2,1920, a commission-manager charter was adopted by the voters, making West Hartford the second city to advance from the “ordinance” class to the list of “regular” commission-manager cities.
VERMONT
Springfield. Population, 5,283. At a town meeting, the board of selectmen was empowered to employ a town manager. John B. Wright was appointed “municipal manager” April, 1920; salary, $3,600.
A newspaper reporter from a neighboring city, in summing up the situation after a three months’ trial of the new plan, emphasizes the difficulty faced by the city manager, which is due to opposition of those constitutionally opposed to any change, those resentful of employing a “stranger,” and most of all, those who endeavor to hold the manager responsible for the fact that the millennium failed to dawn the morning of his arrival. The reporter found that the whole municipal system had been organized into departments and subdivisions, the accounting modernized and city purchasing placed on a business basis. As a whole, the citizens seem well satisfied with the change.
Mr. Wright is 43 years old, a civil engineer, with extensive experience in highway and construction engineering.
NEW YORK
In New York the manager plan may be adopted by any one of three methods.
1. Special charter authorized by special act of the legislature;
2. Adoption by referendum of “Plan


NATIONAL MUNICIPAL REVIEW
[December
784
C,” the city manager plan as provided by general statute;
3. Creation of the position by ordinance, as the case of Watervliet, which adopted “Plan B” of the optional cities act, the Galveston style commission plan, the commissioners being permitted to manage city departments through such officers as they might appoint.
Unfortunately, the optional cities act does not call for non-partisan election, yet in both Watertown and Watervliet, the citizens have elected commissioners on non-partisan tickets, in the former case overturning a very strong Republican majority and in the latter defeating a Republican-Democratic fusion ticket.
Niagara Falls and Newburgh were the first two New York manager cities, the former having a special charter, the latter adopting “Plan C.”
To date but six New York cities have city managers.
Settled Down to Steady Progress
Niagara Falls. Population, 50,-760. Commission-manager charter effective January, 1916. Edwin J. Fort, the second manager, was appointed September, 1918, succeeding O. E. Carr; salary $6,000.
Niagara Falls has settled down to a steady progressive program which the manager states is “very substantial, but not spectacular nor startling.”
During the past year more than 3,-000 water meters have been added to the water system, and all services are now metered.
Several acres of land have been acquired for the construction of a municipal yard, which will contain the asphalt plant and all equipment of the public service department, and will furnish a storage place for materials of all sorts.
An extensive paving program has
been started, and four miles of construction authorized for this year.
The city ordinances have been completely codified and will be published for the first time. This will place the police and the public in a better position for law enforcement.
Modern zoning ordinances have been completed and enacted by the council.
The city has established a motor repair shop and repairs its own motor vehicles with greater speed and economy. This repair shop is used by the board of education for instructing the high school pupils and others.
Mr. Fort is 50 years old, a graduate civil engineer, with long municipal experience.
Improvements Planned at Auburn
Auburn. Population, 36,142. Commission-manager plan effective by adoption of “Plan C” January, 1920. John P. Jaeckel, manager; salary $4,000.
The first six months under the new plan, the city operated under the balance of the budget adopted by the previous administration.
A program of street improvement has been developed to care for the paving which has been permitted to go to pieces during the past three years.
It has been decided to place the fire department on a two-platoon system, and fire equipment will be motorized.
Heretofore garbage and waste have been collected under a contract system, but these functions will now be taken over by the city.
The manager is an advocate of nonpartisan city government, and feels that in spite of the handicap of the political features of the new charter, the city administration is pledged to a thoroughly businesslike conduct of affairs uninfluenced by political consideration.
Mr. Jaeckel is 54 years old, trained


CITY MANAGER MOVEMENT
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1920]
as a business executive, and has held responsible city and state positions.
Better Government in Spite of Politics
Newburgh. Population, 30,272. Commission-manager form effective by adoption of “Plan C” January, 1916. W. Johnston McKay, the fourth manager, was appointed January, 1920, and voluntarily had his salary reduced from $5,000 to $3,600.
Those who have studied the Newburgh situation are convinced that partisan efforts have in no way diminished since the adoption of the manager plan. In fact, the position of manager has been considered the most attractive of political plums, yet in spite of this handicap, Newburgh has enjoyed better city government than ever before.
The incoming manager explains his appointment as follows:
“ You know some men fish; some play poker, and I am one of the fellows unfortunate enough for a number of years to get mixed up with local city affairs, and after my complaining how things were being done by others, they at last gave me the job and told me to do better.”
Mr. McKay is 53 years old. He is reported to have resigned recently.
A Typical “Inheritance” from Political Past
Watertown. Population, 31,263. Commission-manager charter by adoption of “Plan C” effective January, 1920. C. A. Bingham, appointed manager February, 1920; salary, $7,500.
Mr. Bingham writes:
“Watertown’s report will’simply be a story of our inheritance on January 1, 1920. The old administration forgot to mention the unpaid accounts amounting to about $135,000, which were actually filling up pigeonholes and files; $90,000 was on short term notes and the remainder was for monthly bills on
labor and material, some three years old. One plumbing bill was five years old, and so on down to the city employe waiting four months for salary due. Add to this the tax limit fixed ten years ago, and a 50 per cent valuation and a wholesale water rate 50 per cent under cost, and a daily waste of 3,000,-000 gallons (enough to adequately supply our city), and you can begin to see the “ welcome to our city ” that confronted the new commissioners.
“Incidentally everybody purchased everything everywhere, and each separate department ‘kept’ its own books. Bills were paid by drafts on the treasurer who never saw them until returned from the bank, and we found one which has been out uncashed for three years.
“The pathos of the situation was that while the ‘system’ was as full of holes as a sieve in some ways, yet every little appropriation or fund was locked up in a separate account and drawn upon only by specially printed individual drafts.
“The police department was 50 per cent undermanned, and with no equipment, while the fire department was costing nearly $4 per capita!
“If we start to tell what we have already uncovered in past purchases, we would be sued for libel, so will close by stating that we have a commission of progressive business men who are disregarding the insulting slurs of the ex-politicians (who should be thankful they got out from under instead of now trying to throw sand in the gears).
“ We have installed centralized purchasing, uniform municipal accounting, 100 per cent valuation by appraisal, water meters installed, and new building methods; pushing completion of the hydro-electric plant, competent plumbing and wiring inspection, satisfactory garbage collections, enforcing fire prevention code, planning systematic


NATIONAL MUNICIPAL REVIEW [December
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extension of paving, and by the elimination of the primitive methods in other departments hope to report definite facts and figures at the close of the year. ’ ’
Mr. Bingham is 36 years old, a graduate civil engineer, and served as city manager at Waltham, Massachusetts, 1918-19, and town manager at Norwood, Massachusetts, for three years previous.
Non-Partisan Victory Over Party Politics
Watervliet. Population, 16,073. Position of manager by ordinance effective January, 1920. James B. McLeese. The first manager died shortly after taking office, and was succeeded in June by Henry E. Gabriels; salary, $3,600.
In June, 1919, the voters of Watervliet adopted “Plan B” of the optional cities act, by a majority of two to one, which provides for a mayor and two councilmen to serve as a commission. At the general election held in November, the “people’s candidates” defeated the fusion political ticket by large pluralities, thus repudiating political domination. The mayor and the councilmen elect agreed to appoint a manager, but upon advice of the general attorney of the state they gave him the title of “general” manager, so as not to conflict with the term “city” manager as used in “Plan C,” although the powers and duties are the same.
A city purchasing department is being created, and purchase of supplies will be centralized. The three big problems facing the new administration are:
Equalization of property values;
Improvement of city streets;
Law enforcement.
An effort will be made to annex by legislation part of the town of Colonie.
Sherrill. Population, 1,500. Special city-manager charter effective June, 1916. S. E. Northway, the
fourth manager, was appointed August, 1920.
The population of Sherrill consists chiefly of employes of the Oneida Community Company, and the manager is one of the company’s men, giving part time to city affairs.
PENNSYLVANIA
The Pennsylvania laws do not permit commission-manager government by charter, yet they allow the cities and boroughs to create the position of manager by ordinance.
Unique Endorsement at Altoona
Altoona. Population, 60,331. Manager plan by ordinance effective January, 1918. H. Gordon Hinkle, manager; salary, $7,500.
Mr. Hinkle notes as the outstanding achievements in Altoona during the past year:
Sinking fund earnings have been increased from $26 per thousand in 1917 to $43 per thousand in 1919 by close attention to investments.
Tax assessment map of city completed.
Tax valuation map of city started and nearing completion.
Equipment ordered that will complete the motorization of the bureau of fire.
Ordinance adopted requiring the metering of all industrial and commercial service and meters installed on approximately 800 such services.
The sewage disposal plant built in 1914 at a cost of $131,000, but never used on account of defective construction, repaired and placed in service.
Evidence that the manager plan is highly satisfactory to Altoona citizens is found in the fact that while state law has compelled the return of partisan city election, Altoona’s commissioners were all re-elected by almost unanimous consent. In fact, both Democrats and Republicans were placed in nomination on both tickets, and on the Democratic ticket a Republican re-


1920]
CITY MANAGER MOVEMENT
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ceived the highest vote, while on the Republican ticket a Democrat headed the list.
Mr. Hinkle is 45 years old, a civil engineer with extensive experience in construction.
Better Service at Lower Cost
Ambridge. Population, 12,730. Borough manager appointed under ordinance provision November, 1918. W. M. Cotton, the second manager, succeeded R. H. Hunter, February, 1920; salary, $4,500.
An Ambridge paper, in referring to the annual report of the retiring manager, calls attention to the fact that the big paving program adopted by the council has been carried out as planned; that a complete record of all streets has been made in blue prints available for work and ready reference. Nearly a mile of sidewalks was constructed last year, and more than two miles of sewer laid by the city at a saving of $10,000 under the lowest bid received. The collection of garbage was difficult and not satisfactory, due to shortage of labor, yet the expense was $3,000 less than the preceding year. Loss by fire was but $6,000, as Compared to $17,000 for the year before. Health was protected by careful analysis of milk and inspection of the dairies. The balance sheet at the end of the year shows a gain in assets of $3,172.
Mr. Hunter is 42 years old, a graduate electrical and sanitary engineer, with municipal experience. Mr. Cotton, who succeeds him, is 29 years old, trained in municipal research and served as borough manager in Edgeworth and Sewickley, Pennsylvania, two years prior to his appointment at Ambridge.
City Plan Financed by Popular Subscription
Sewickley. Population, 4,955. Borough-manager plan by ordinance Octo-
ber, 1918. W. M. Cotton, who had previously served as borough engineer was appointed borough manager, resigning February, 1920. His successor has not been announced. Upon resigning, Mr. Cotton wrote:
“During 1919 Sewickley has lived within its budget and enters the year with a balance in the general funds.
“A health ordinance has been prepared and passed, regulating the sale of milk and cream, the collection and disposal of garbage and refuse and general sanitary conditions of the borough.
“To my mind the biggest achievement of all is the increased interest created among the citizens to the extent that a fund of $3,000 has been raised by private subscription to finance a complete survey and city plan, the survey to cover all branches of government with recommendations for new organization, newprocedure and report forms. The lack of civic interest is the one big handicap in this vicinity, and this survey shows that some interest has been created and the survey will of course increase this when the report is finished.”
Better Financial Condition Than Ever
Towanda. Population, 5,610. Borough-manager plan by ordinance April, 1918. William T. Howie, manager; salary, $1,500.
The Towanda Daily Review, in commenting upon the annual report of the manager, states:
“The borough is at the present time in better financial condition than ever before.”
Since the adoption of the borough-manager plan the tax rate has not been changed and the balance on hand in the treasurer’s office at the close of 1919 is the largest yet.
Last year more than twice as much was spent on streets as in 1917. Bridges have been painted, waterways
3


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NATIONAL MUNICIPAL REVIEW
[December
damaged by a flood years ago have been permanently repaired; new equipment has been purchased and, in fact, there has been a general house cleaning, so that Towanda is now “spick and span.” A contract has been let for brick paving, which will complete the two-mile stretch through the borough.
A 23-acre park area has been offered to Towanda by the Lehigh Valley Road, and the offer will probably be accepted and the lands improved soon. To quote the local paper:
“Towanda is among the leaders in the United States in the adoption of the borough-manager plan, but the time is coming when every town or city of any size will have one. They are becoming a necessity and the people are awaking to that fact. Several thousand dollars have been saved in this borough during the past two years through the efforts of Mr. Howie.
Mr. Howie is 45 years old and experienced in highway construction prior to his appointment as manager.
Systematic Health Supervision Pays Edgeworth. Population, 2,500. Borough-manager position by ordinance effective January, 1914. Robert Lloyd, the third manager, succeeded W. M. Cotton, March, 1920; salary, $3,000.
Upon resigning Mr. Cotton wrote: “Without any increase in taxation Edgeworth has made up in one year the entire deficit from the war year, 1918, and on January 1, 1920, is in excellent financial condition. Health work has been closely followed up, with the result that we have the lowest number of communicable diseases of any year for the past five.”
Loss Converted Into Profits Mifflinbgrg. Population, 2,000. Borough-manager plan by ordinance
effective January, 1919. W. D. Koch-ersperger, manager; salary, $2,500.
Upon entering the office the manager found: “office methods of a vintage that would have been out of date thirty years ago; a complete lack of working plans of the various streets; the electric light and water accounts badly in arrears. These have now been collected and many other accounts considered bad have been turned into the treasury.”
Competitive purchasing has yielded a material saving. A business survey has been made in the water and light plant, and by the equalizing of rates, plugging of leaks and some changes in operation, a marked gain was immediately noticed.
Standard concrete paving has been constructed on the main street by town force, at an actual cost of $1.55 per square yard, with an added 24 cents for grading.
Mifflinburg has lived within its income without increased taxation. Previous to the present management, the electric light plant was operated at a loss. This loss has been converted into a profit of 15 per cent and a corresponding profit in the water department of 25 per cent.
A quarry has been opened up by the borough to still further reduce the cost of paving construction, and the pulverizing of raw limestone from the paving creates a by-product that has a ready sale to the farmers.
The new form of government has met with popular approval.
Mr. Kochersperger is 50 years old, a graduate of the United States Naval Academy and experienced in practical engineering and construction.
CANADA
Four Canadian municipalities have adopted the manager plan. The first


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1920]
of these was Westmount, Quebec, whose general manager charter dates back to 1913. The other three have appointed general managers by contract or ordinance within the past two years.
NEW BRUNSWICK
Mayor Changes Opinion Woodstock. Population, 4,000. General manager employed through contract June, 1919. R. Frazer Armstrong, manager; salary, $3,000.
In reporting the last annual town meeting the local paper comments upon the hearty support the town manager plan has received. The mayor, Thomas H. Noddin, is quoted assaying: “We tried to put the town on a business basis and at no time in the history of Woodstock has such good feeling existed. When the town manager proposition was before us I may say that for two years I was opposed to the idea, but after experience I have changed my mind. I am sure if we had adopted this system ten years ago we would have been the leading town in Canada to-day.”
One unique feature of the new order of things commented upon by the paper is the fact that the manager in presenting his report “made no attempt to cover up any matters which received attention during the year.”
A recent editorial of the Woodstock
Press calls attention to the fact that the town manager form of government has reduced the tax rate to $1.66 on $100—the lowest rate in the Maritime Provinces.
Mr. Armstrong is 30 years old, a graduate engineer, with broad experience, and served as captain of engineers in the war.
Edmundston. Population, 4,000. Town manager, L. Leon Theriault, appointed February, 1920; salary, $3,000.
Edmundston owns and operates its public utilities, and the water and light systems are yielding a profit. The sewers are being extended. Three miles of permanent roads and sidewalks have been constructed this first year. Mr. Theriault has a two-year contract with the city. He is 36 years old and experienced in engineering and highway construction.
Quebec
Westmount. Population, 14,579. Manager plan by charter April, 1913; George W. Thompson, general manager.
Grand ’Mere. Population, 9,000. Position of town manager created by charter February, 1920. Henry Ortiz, city manager, salary, $5,000. Mr. Ortiz is 38 years old, trained and experienced in civil engineering.


DEPARTMENT OF PUBLICATIONS
I. BIBLIOGRAPHY
A list of civic literature published during the past three months. Only pamphlets and books are included. Magazine articles may be found through the standard periodical indexes.
Compiled by Rebecca B. Rankin1
Americanization
Babnes, M. C. Neighboring new Americans. New York: F. H. Revell Co. 1920. 68p.
City Club op Chicago. Ideals of America. Analyses of the guiding motives of contemporary American life by leaders in various fields of thought and action. Prepared for the City club of Chicago, 1916-1919. 1919. 324p.
Woman’s Community Council, Minneapolis. A guide for new Americans of Minneapolis, Minnesota. 1920. 16p.
City Planning
Bartholomew, Haeland. A comprehensive city plan for East St. Louis, Illinois, prepared for the War Civics Committee. 1920. 63p.
Chicago. Plan Commission. Proceedings of the nineteenth meeting of the . . . commission, held on April 9, 1920. Ten years’ work of the . . . commission, 1909-1919. A resume of the work on the plan of Chicago; presented by the executive committee to and approved by the . . . commission in session April 9, 1920. April, 1920. 69p.
Citizens’ Zone Plan Conference. Chicago. Dec. 16-17, 1919, in co-operation with the city of Chicago and the civic organizations of the city of Chicago. Report of proceedings. [1920.] 94p.
Denham, R. I. and Wilkinson, L. S. G. Practical chart of town planning. (Library of plates for architects, portfolio, no. 6.) London, England: Technical Journal, Ltd., 27 Tothill street, Westminster. 1920.
International Garden Cities and Town Planning Association. Report of conference and annual meeting, 1920. 1920. 24p.
Milwaukee, Board of Public Land Commissioners. Zoning for Milwaukee. Tentative report of the commissioners. June 21, 1920. 1920. 56p.
librarian, New York Municipal Reference Library.
National Conference on City Planning. Proceedings of the eleventh conference, May 26-28, 1919. 1920. 207p.
South Australia. Attorney-General and Minister in Control of Town Planning. Planning and development of towns and cities in South Australia. Report by the government town planner, C. C. Reade, . . . upon existing conditions and defects and the need for town planning legislation relating thereto in conformity with the provisions of the Town Planning and Development Bill, 1919. 1919. 48p.
Civics
Adams, E. W. A community civics; a textbook in loyal citizenship. New York: Scribners. 1920. 385p.
Bartlett, W. H. Handbook of American government. Revised and enlarged, by H. C. Black. New York: Crowell. 1920. 162p.
Dawson, Edgar. Organized self-government. New York: Henry Holt Co. 1920. 883p.
Kinsman, D. O. Essentials of Civics, Wisconsin edition. Appleton, Wisconsin: College Press. j* 1919. S19p.
League of Women Voters (Arkansas). Twelve lessons in good citizenship, for use of Arkansas women. [1920.] 22p.
Malcolm, G. A. Philippine civics. New York: Appleton. 1919. 183p.
Munro, W. B. Government in American cities. 3d edition. New York: Macmillan. 1920. 456p.
Peterson, Samuel. Democracy and government. New York: Knopf. 1919. 287p.
Woman’s City Club of Chicago. Illinois voters’ handbook. 1920. llOp.
United States. Bureau of Education. Civic training through service, by A. W. Dunn. June, 1920. 13p. (Teachers’ leaflet no. 8.)
United States. Bureau of Education. Lessons in civics for the three primary grades of


1920]
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791
city schools, by Hannah M. Harris. July, 1920. 64p. (Teachers’ leaflet no. 9.)
Civil Service
Assembly of Civil Service Commissions. Tackling employment problems—veteran preference in nation, state and city. Experts discuss vital needs at Rochester conference. 1919. 189p.
Los Anqeles County. Civil Service Commission. Rule XIX of the rules of the . . . commission relating to classification, as amended and in force July 15, 1920. 1920. 47p.
Milwaukee. City Service Commissioners. Twenty-fourth annual report covering the year 1918, and twenty-fifth annual report covering the year 1919. [1920.] 96p.
Wisconsin. Civil Service Commission. Seventh annual report from July 1, 1916, to June 30, 1918.
Cost of Living
Academy of Political Science in the City of New York. Inflation and high prices; causes and remedies, edited by H. R. Seager, 1920. 144p. (Proceedings, June, 1920.)
American Academy of Political and Social Science. Prices. 1920. 289p. (Annals, May, 1920.)
Minnesota. Department of Agriculture. Investigation of the cost of clothing, by J. H. Hay. May, 1920. 12p. (Bulletin no. 6.)
Minnesota. Department of Agriculture. Investigation of the trade practices and profits involved in the manufacture and sale of boots and shoes, by J. H. Hay. May, 1920. 15p.
(Bulletin no. 7.)
Philadelphia. Bureau of Municipal Research. The cost of a workingman’s standard of living in Philadelphia at August 1920 prices. (Citizens’ business, no. 433.) September, 1920. lip.
United States. War Industries Board. Prices of coal and coke, by C. E. Lesher. 1919. 115p.
Education
Bureau of Municipal Research, New York. Report on a survey of the system of supervision of the elementary schools—Harrisburg, Penn. Prepared for the special committee of the board of school directors. Typewritten. June, 1920. 3Sp.
Burgess, W. R. Trends of school costs. New York: Russell Sage Foundation. 1920. 142p.
Carnegie Foundation for the Advancement of Teaching. The professional preparation of teachers for American public schools; a study based upon an examination of tax-supported normal schools in the state of Missouri, by W. S. Learned, W. C. Bagley, and C. A. McMurry and others. 1920. 475p. (Bulletin no. 14.)
Gesell, Arnold. Special provisions for exceptional school children. A guide-book on the public school care of mentally deficient and otherwise exceptional pupils, with special reference to conditions and possibilities in Connecticut. February, 1919. 76p.
United States. Bureau of Education. The university extension movement, by W. S. Bittner. 1920. 124p. (Bulletin 1919. no. 84.)
Engineering
American Concrete Institute. Proceedings of the sixteenth annual convention held at Chicago, Illinois February 16, 17 and 18, 1920. 1920. 356p.
Burgess Engineering Company. Burgess blue book; electrical formulas and electrical drawings, problems and calculations, compiled by Yorke Burgess. 747 E. 42nd Street, Chicago, n.d. 108p.
Fairfield, H. P. and others. Blue-print reading. Chicago: American Technical Society. 1920. 218p.
New Jersey. Interstate Bridge and Tunnel Commission. Report to the senate and general assembly of New Jersey. March 17, 1920. 77p.
New York State. State Office of Engineer and Surveyor. Annual report for the year ended June 30, 1919. 1920. 363p.
Newell, Frederick H. Water resources, present and future uses. A revision of the addresses delivered in the C. S. Lyman lecture series, 1913, before the senior class of the Sheffield Scientific School, Yale university. 1920. 310p.
Sloane, T. O’Conor. Electricians’ handy-book. 5th edition, revised and enlarged. New York: N. W. Henley Co. 1920. 823p.
United States. Bureau of the Census. Census of electrical industries: 1917. Central electric light and power stations, with summary of the electrical industries. 1920. 184p.


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Vigneatj, E. E. How to understand the reading of blue-print drawings. The fundamental principles simply explained. Detroit, Mich. Educational institute. 1919. 169p.
Finance
Cleveland and Buck. The budget and responsible government. New York: Macmillan. 1920. 406p.
Gulick, L. H. Evolution of the budget in Massachusetts; submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in the faculty of political science. New York: Columbia university. 1920. 241p.
Rhode Island. State Libhaby. Legislative reference bureau. The budget system, by H. W. Lord. Typewritten. Jan. 1920. 27p.
Finance, Municipal
Boston, Mass. Finance Commission. Reports and communications, vol. XV. 1920. 312p.
Kansas City, Mo. Comptroller. Annual report for the fiscal year 1919, beginning April 22, 1919, and ending April 19, 1920. 1920.
157p.
Los Angeles, Cal. Report of the auditor.
1919. 74p.
Municipal Research Bureau of Cleveland. Report upon the outstanding debt and bonding policy of the city of Cleveland. June,
1920. 43p.
New York City. Board of Education. Report of the superintendent of schools on the budget estimate for 1921. September, 1920. 114p.
Newark Department of Revenue and Finance. Annual report of the director for the year 1919. 1920. 260p.
Toronto, Canada. Commissioner of Finance. Annual financial report. 1919. 60p.
Toronto, Canada. Bureau of Municipal Research. City budget facts. 1920. 16p.
United States. Library of Congress. Division of bibliography. List of references on municipal finance and taxation. Typewritten. June, 1920. 25p.
Foods and Markets
Dowd, M. T. and J. D. Jameson. Food: its composition and preparation. New York: Wiley. 1918. 173p.
Great Britain. Food Controller. Milk control. [1919.] 8p.
Jennings, I. G. Study of the New York city milk problem. New York: National Civic Federation. 1919.
National Association of State Marketing Officials. Summary of proceedings at organization meeting, Feb. 5, 6, 7, 1920. Constitution and by-laws, election of officers, reports of standing committees and list of all members in attendance at sessions. 1920. Typewritten. 21p.
Pearl, Raymond. The nation’s food: a statistical study of a physiological and social problem. Philadelphia: Saunders. 1920. 274p.
Rhode Island. State Library. Legislative reference bureau. 1916-1919. Legislation relative to milk (in the several states), a digest, by Donald H. Curtis. April, 1920. Typewritten. 9p.
United States. Department of Agriculture. City milk plants: construction and arrangement, by Ernest Kelly and C. E. Clement. July, 1920. 35p. (Bulletin no. 849.)
United States. Department of Agriculture. Co-operative marketing, by O. B. Jes-ness. September, 1920. 27p. (Farmers’ bulletin no. 1144.)
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12p.
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Detroit Bureau of Governmental Research, Inc. Report on the organization and administration of the probation department of the Recorder’s probation department of the


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Recorder’s court. Typewritten. August, 1920. 29p.
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Health and Sanitation
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[December
terim report of the Committee on Smoke and Noxious Vapours Abatement. 1920. 8p.
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Spokane. Ordinances. Ordinance no. C2579. An ordinance relating to public health; providing for the prevention and suppression of disease in the city of Spokane, and for inspection, regulation and licensing of restaurants, caf6s, lunch counters, lunch stands, and other eating places in said city; . . . Passed August 9, 1920. (Spokane. Official Gazette, August 18, 1920. p. 5410-5411.)
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Housing Problem
CityClubofNewY ork . The housing crisis: memorandum prepared for the special session of the New York legislature. September, 1920. 13p.
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Juvenile Courts
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Labor
American Academy of Political and Social Science. Industrial stability. 1920. 177p. (Annals, July, 1920.)
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California. Bureau of Labor Statistics. Labor laws of California. 1919. 261p.
Howard, Earl D. The Hart, Sehaffner and Marx labor agreement. Industrial law in the clothing industry. 1920. 97p.
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Kansas. Court of Industrial Relations. Rules, practice and procedure, n.d. 8p.
New York State. Industrial Commission. Court decisions on workmen’s compensation law, July, 1919-June, 1920, subjects other than constitutionality and coverage. July, 1920. I13p. (Bureau of Statistics and Information. Special bulletin no. 98.
---------. Report submitted relating to the
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Laws
California Commonwealth Club. The Alien Land Law. 1920. 36p. (Transactions, August, 1920.)
Massachusetts. Department of Public Utilities. New legislation of especial interest to public utilities, including municipalities owning lighting plants, 1920. 1920. 48p.
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1919. 347p.
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1920. 16p. (Special issue of Bulletin.) Wisconsin. Industrial Commission. Building code. Revised, 1920. 1920. 133p.
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Pensions
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Police
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Ports
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Salaries
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Social Welfare
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Citizen’s Committee on City Plan of Pittsburgh. Pittsburgh playgrounds, study and recommendations. 1920.
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Haynes and S. P. Davies. 1920. 198p.
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178p.
Hartford, Conn. Juvenile Commission. Eleventh annual report to the Mayor and Court


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of Common Council. Press of T. B. Beach, Jr., Hartford. 1920. 25p.
Indiana, University. The community center; list of lantern slides, with notes on the community schoolhouse. April, 1920. SOp. (Bulletin no. 8.)
Los Angeles. Social Service Commission. Social service directory, 1920. 1920. 63p.
New York State. Probation Commission. State supervision of probation. 1920. 12p.
---- ------. Twelfth annual report for the
year 1918. 1919. 576p. (Legislative docu-
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Efficiency. Report of a survey of Toledo’s Welfare Farm. Conducted by Professor Charles Russell, Toledo University. 1920. 61p.
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Taxation
Norfolk, Va. Ordinances. An ordinance imposing taxes on the shares of stock of the capital of banks, banking associations, trust and security companies, and licenses for the payment of interest on the city debt, and to meet the general appropriations, for the fiscal year of 1920. Licenses from May 1,1920, to and including April 30, 1921. 1920. 46p.
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Transportation
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American Electric Railway Association. A compilation of cities in which fares were increased, July 1, 1920. This shows city, population, name of operating company, cash fare, ticket rates, date of change and number of fare changes granted. 1920. Typewritten. 17p.
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---------. July, 1920. Typewritten. 8p.


NOTES AND EVENTS
Municipal Operation on Staten Island, New
York.—Toward the close of last year the two surface car companies in Staten Island, one of the boroughs of New York city, threatened to abandon the service unless an increase in fare was immediately granted. One of them, the Staten Island Midland Railroad Company, after posting a warning notice to the public that they were compelled to take the action they did because of their inability to continue at the five-cent rate, did shut down early in January, despite a restraining court order to the contrary secured by the city. A receiver was appointed, who, on being urged to run the cars, claimed that he found practically no equipment that would permit him to do so. It seemed that the cars belonged to the Richmond Light & Railroad Company, from whom they were leased and who furnished the power. The city put on busses temporarily and took action looking forward to the revocation of some of the franchises of the company. Final action on this matter was prevented because the property is in the hands of the federal court.
In the meantime, negotiations were opened with the receiver to enable the city to operate the lines of the company, and an agreement was drawn up with the court’s approval, embodying the terms on which this may be done. This agreement is without prejudice to the rights of the city or the company when the courts finally decide whether or not the franchises have been forfeited. It provides for operation on the same schedule as was in force prior to discontinuance of the service at a five-cent fare.
From the receipts the city is to pay the expenses of operation. The balance, if any, is to be divided equally between the city and the receiver of the company, in lieu of rental. However, no money is to be paid directly to the receiver. It is to be paid into the court until a final determination has been made as to the right of the city to the property because of the franchise forfeitures. Besides, the city claims that the company owes it $100,000 in back taxes. There is no renewal clause, but there is no doubt of a continuation of the arrangement or of a new ar-
rangement if operation is successful. As it is, the receiver is given the right to terminate the agreement on thirty days’ notice, because the property is under the jurisdiction of the federal court and the position is taken that the court has no right to relinquish such jurisdiction.
In addition to this agreement another is made with the Richmond Company for power and the use of certain tracks approaching the ferry terminals, which tracks belong to that company.
Prior to commencing operation, the city is putting the tracks and poles into shape. This is being done under the terms of the agreement by which the city has a prior lien on all improvements made by it to the property, if done with the approval of the court. An appropriation of $300,000 was made some months ago for improvements, including the purchase of cars. About thirty of the most improved type of one-man cars have been ordered and will be ready for use beginning December first, when the agreement will come into force.
T. David Zuckerman.
*
Milwaukee Moves Toward City-County Planning.—Although the built-up territory adjoining Milwaukee is opposed to annexation to the city, it is obvious that no adequate city planning can be done without consideration to the metropolitan territory which some day will be a part of the city. Legislation is therefore being prepared which will enable the city and county planning boards to act jointly on planning matters affecting both territories.
The city of Milwaukee occupies a large part of the county of Milwaukee, and if the adjoining suburbs are considered, the greater part of the county is occupied by the population centering on the city of Milwaukee. Land adjoining the city is usually quite fully developed before it is annexed to the city. This is the cause of many of the difficulties encountered by the city.
During the consideration of the city zoning ordinance by the board of public land commissioners, it soon became apparent that any planning in the city itself would be of little avail as far as the surrounding territory is concerned,
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NATIONAL MUNICIPAL REVIEW ~ ~~ ~~~~ VOL. IX, No. 12 DECEMBER, 1920 TOTAL No. 54 VIEWS AND REVIEWS I HE present investigation into the T bond purchases of the New York state comptroller is revealing further evidence as to the fickleness of sinking funds. For some years, a rumor has been circulating that a very simple plan was being put into operation. The plan, according to the rumor, was to accumulate, with the assistance of certain banks, bonds for sale to those in charge of the state sinking fund. It was hinted that those involved were protected against loss in a falling market by a proper understanding with those in charge of the trust fund, while any “velvet” from sale at enhanced prices to the state went to the conspirators. The whole situation is now being thoroughly aired in a John Doe investigation into the affairs of the state comptroller’s office. The charge, in brief, is that hundreds of thousands of dollars have been made by securing the purchase by the state of bonds above the prevailing market rate at the time. The Brooklyn Daily Times announces that the profit on eleven purchases selected at random by its investigators amounted to $300,000. It is clear that, as the inquiry proceeds, certain persons are becoming more and more involved. Public sinking funds are an enormous risk, in compensation for which the benefits are most remote and theoretical. In addition to careless mismanagement or wilful neglect it is always possible to graft on them. Serial bonds are not only more easily handled, but usually represent a deliberate public decision in favor of sound financial methods in the payment of public debts. I1 THE Taint in Politics is the title of a book by an anonymous author, lately published in England, which will furnish welcome material for those who preach distrust of political processes. The thesis is that greed, graft or prejudice, have, in the long run, determined political conduct. Beginning with the Papal politics of the sixteenth century, developing further a century later in England under the Stuarts, the taint tinally blossomed into the poisonous and deceptive flower which we call the party system. Political parties are an obstruction to government, our author believes, because they discourage the highest type of people from becoming candidates for political office. The model candidate is described as a well-to-do, virtuous and leisured man or woman, indifferent to titles, offices and other passing rewards. Such, however, refuse to stultify themselves by associa757

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758 NATIONAL MUNICIPAL REVIEW [December tion with organized parties. If by act of God a legislature composed of such were elected, government, our author admits, wouldrest ondead center. This is assumed to be the crushing indictment of present political institutions. If there is something about the work of government which sinks a public official deeper in original sin than the rest of us, the case is indeed serious. Is it as bad as this? 111 THE Michigan Supreme Court has declared that proportional representation in municipal elections is unconstitutional. The case involved the validity of that section of the Kalamazoo charter which provided this method for the election of the city commission. The rest of the charter stood, but a new election was ordered and held last month under the old system. The opinion is invective, rather than judicial reasoning, and in years to come will be grist for the mill of those who would deny to the courts power to declare law void. Rather scornfully the opinion traces the growth of the movement. The court was not clear as to the distinction between the Hare system and cumulative voting. Criticism which in reality applies only to the latter is directed at the former. Advantage is taken of present conditions in Russia and Poland to discredit proportional representation and the slower progress of the theory in older countries is attributed to superior political wisdom. Perhaps a sufficient description of the opinion is that it is propaganda and not law. The provisions of the constitution invoked by the court are: In 811 elections [it qualified voter] shall be an elector and entitled to vote. and No city or village shall have power to abridge the right of elective franchise. . . . These are held to guarantee to every elector, equality of voting power, which (under an early case involving cumulative voting) is construed to mean the right of all to vote for every officer to be elected. The earlier case had also held that the cumulative system had denied to voters equality of voting power, since it gave an opportunity for several preferences, and concluded that equality could only be maintained by restricting voters to a single choice for each office. Proportional representation under the usual rules of counting the ballots contains an element of chance that one vote may count for more than another, and is therefore void. How remote this chance is the court does not consider, being content merely to quote, with approval, an earlier dictum that the system is “too intricate and tedious to be adopted for popular elections by the people.” The right of every elector to vote for every officer to be elected within a district with ballots of equal weight having been established, the court turns to a consideration of what constitutes an election district. It finds that the only legal voting constituency is a geographically dehed representative district. There is nothing said about geography in the sections of the constitution invoked by the court, but it is asserted that law The concept of a constituency bound together by like-mindedness and not formed by lines on a map quite exceeds judicial comprehension. As an example of judicial partisanship and muddle-headedness, this opinion will rank as a classic. recognizes ” no other. LC H. W. DODDS.

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A NEW METHOD OF SELLING BONDS BY B. H. PENNY London, Ontario RESULTING in the sale of $400,000 debentures since its inception in London, On’t., a year ago a new plan of disposing of city securities is regarded as a distinct success by both City Treasurer James S. Bell and members of the city council. Under the new arrangement city debentures are sold directly to the citizens instead of finding their way to the public through bond houses. When authorized debentures are not available, but are expected within a short time, the city treasurer accepts money for which he issues a receipt. This is used for current expenses, reducing the amount of short term loans which it is necessary to make from the banks each year until municipal taxes have been collected. As soon as a debenture issue is authorized the money is applied to its account, the interim receipts are called in and the bonds are issued in their places. Interest is paid on the money from the moment it is accepted by the city. This policy has the effect of keeping the market for city debentures always open. When the plan of selling debentures over the counter of the treasurer’s office was adopted it was found that many sales were being lost because debentures were not always available. Citizens who came with a few hundred dollars to invest would be told to return in a few weeks when it was expected that bond issues would have been authorized. Most of these prosspective investors, however, did not wish to have their money lying idle. They accordingly went elsewhere and invested in other securities. In the opinion of the city treasurer this was needless loss. Debentures to finance public improvements are always certain to be issued each year. In many cases the work is under way, but the bonds cannot be sold until it has been completed, although it is certain that they will be issued before the end of the year. The city treasurer saw no reason why money could not be accepted for these prospective bond issues. He tried out the plan and found that it was highly successful. That was a year ago. Since January 1 of the present year, $100,000 of debentures to finance a new reservoir; $85,000 for extension of the water system and $80,000 for extension of the electrical system, were sold in this manner. Municipal debentures are found to make a strong appeal to the smaller investors. They have as much confidence in them as in the government Victory bonds. The facilities now for investing in debentures on any business day of the year are making practically every citizen a bond holder. London claims to be, not only the first Ontario city to adopt this plan, but also the first Ontario city to sell its debentures directly to the citizens. The policy was adopted on a large scale soon after Canada’s declaration of war on Germany in 1914. It has been pursued successfully since then with one or two exceptions. On these occasions the quick sale of large issues was desired. This could not be accomplished by gradual disposal of small amounts and the whole issues were disposed of to bond houses. 75 9

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INDIANA REGULATES COAL BY CHARLES KETTLEBOROUGH Director, Indiana Legislative Reference Bureau Last summer the Indiana legislature created a special commission to regulate the price and distribution of coal. The courts have sus.. tained the law, and the cornmission is functioning. :: .. BY an act approved July 31, 1920, the state of Indiana created a special coal and food commission, consisting of the members of the state board of accounts, which is to remain in existence until March 31, 1921, unless continued by future legislation. Under the terms of this act, the special coal and food commission is given authority to fix the price at which all coal moving in intra-state commerce shall be sold to jobbers, wholesale and retail dealers, and to the public; to determine the priority and extent in which the various classes of users of coal in the state shall be supplied, including railroads, public utilities, industries and the people generally; and to require operators to produce and supply a sufficient quantity of coal to satisfy domestic demands, at the price fixed by the commission. In determining and fixing the price at which coal shall be sold, the commission is required to hold hearings, conduct investigations and collect the necessary evidence, and for that purpose to administer oaths, issue subpoenas, compel the attendance of witnesses and the production of books, accounts, papers, records, documents and testimony. The law provides that no price fixed shall be confiscatory, nor less than the actual cost plus a fair and reasonable return on the property used in the production and sale of the coal. In fixing the cost of coal to the producer, the commission is required to allow the cost of production, including all reasonable and proper expenses for operation, maintenance, depreciation and depletion, and in addition thereto a just and reasonable profit. In fixing the prices of coal for dealers, the commission is required to allow the cost to the dealer, including transportation and distribution charges, and in addition thereto a reasonable sum for profit. In order that the commission may be enabled adequately to control the coal industry, and for the purpose of obtaining the necessary revenue to defray the expenses of the commission, the law requires every person engaged in the business of mining coal and every wholesale and retail dealer to take out a license. The fee for a mining license is $25 per year; for a wholesale dealer’s license, $10 per year; and for a retail dealer’s license, $5 per year. In addition, the act imposes a license fee of one cent per ton on all coal mined in the state, payable into the state treasury monthly. The validity of this law was speedily assailed, and a suit to test its constitutionality was instituted in the federal district court for the district of Indiana, and an opinion was given by the court on September 6. In this opinion nothing was decided “except the one question, that the state, under its police power, can lay its hand upon the coal mining industry.” (American 760

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19201 “THE KING CAN DO NO WFtONG” 761 Coal Mining Co. vs. The Special Coal and Food Commission of Indiana.) The hearing held by the commission to determine the price at which coal should be fixed was begun on September 27, and the order prescribing the classification and fixing the prices of coal was issued on October 5. This order divided all mining companies in the state into four classes and fixed the price for each class. A rehearing on the merits of this order was concluded on October 15, and if the coal companies and dealers wish to obtain further “THE KIXG CAN redress they will be obliged to begin the necessary proceedings in the Marion circuit court. Under the terms of this act, 1,338 retail dealers, 168 wholesale dealers and 252 operators have taken out licenses, and the total tonnage tax paid into the state treasury up to October 1 was $18,256.39. The commission is also authorized to investigate the hoarding of food, but this provision is an amendment attached in the house, and is of only minor and subsidiary importance. DO NO WRONG” BY ROBERT M. GOODRICH Detroit Bureau of Governmental Research A terse discussion of judicial opinion regarding the responsibilities .. .. .. .. .. of municipalities for acts of its employes. :: .. ‘‘L%TAT c’est moi” said Louis XIV; and as long as that was true the king could do no legal wrong. Kings have been beheaded and governments uprooted, but the “doctrine” still lives. Divine rights and democracies seem so utterly inconsistent that it is almost impossible to conceive one within the other. Yet so thoroughly has the “ divine right ” doctrine been woven into American municipal law that until now it has been almost futile to attack it. Case after case has gone to every supreme court in this country testing the responsibility of cities for the tortious acts of employes. In as many cases the “doctrine” has been a determining factor, in the decision. Formerly its application afforded complete immunity to the government from all responsibility, but the rule, as now generally recognized, attaches liability in those cases where the act complained of is in the commission of some “ministerial function.” The legal differentiation between “governmental ” and “ministerial ” is as ambiguous as it is curious. No attempt could be made at a classification. The definition of McQuillan is illustrative : “What are governmental powers and duties, and what are tor.. porate ministerial duties, is not subject to precise definition further than to say this: The powers and duties of municipal corporations are of two-fold character; the one public, as regards the state at large, in so far as they are its agents in government; the other private, in so far as they provide the local necessities and conveniences for their own citizens.” Until recently driving a fire truck has been a glaring example of a governmental function, and an injury sus

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76 NATIONAL MUNICIPAL REVIEW [December tained by an individual through neglect of the driver could not legally be compensated. The decision of Fowler vs. City of Cleveland offers the only exception. In that case a by-stander was injured by the negligent driving of a fire truck. Contrary to innumerable other cases, the majority opinion held that the action of the fire department in driving a hose truck was ministerial, and that the city should be liable. To the average reader this would appear sound and progressive, but it is not progressive enough for Judge Wanamaker. “I heartily agree with the authority and soundness of this judgment. I as heartily disagree with the grounds of the judgment.” The majority opinion whittles down the sphere of the governmental function to the aggrandizement of the ministerial. Judge Wanamaker would annihilate the ministerial function altogether, and hold the municipality bound to pay for all injuries in the exercise of its police powers and governmental functions. To him the immunity of a city in the exercise of a governmental function is part and a parcel of the immunity of the sovereign state. “The doctrine,” he believes, “has been shot to death on so many battle fields that it would seem utter folly now to resurrect it.” The niceties that may be raised by scholars of political philosophy can no longer be considered practical. The power to compel is inherent in the people, not the sovereigns. It is based on natural, not legal justice. Common councils in many of our cities, appreciating the injustices caused by adhering to the rules of law, allow claims over the objection of their legal advisors. Judges, too, must sooner or later come to the realization that their decision must be more largely governed by the mores of the day and the conviction of the community, as to what makes for general welfare. It is interesting to note that the Georgia supreme court passed upon precisely the same set of facts as appear in the instant case with opposite results. No mention of the Fowler case was made in the opinion. NEW YORK LEGISLATURE ACTS ON HOUSING BY RAYMOK’D V. INGERSOLL New York I IS August Governor Smith announced that on September 20 there would be a special session of the legislature to deal with housing. The joint legislative committee, of which Senator Lockwood has been chairman, at once resumed its sessions and hearings, and brought in to the legislature a report giving an analysis of conditions, including tables showing that whereas the rate of wages for men in the building trades has doubled during the past few years the prices for building materials have on an average advanced still more sharply. This report recommended certain legislation to supplement the emergency laws of last winter affecting the relation of landlord and tenant and also recommended several measures which the committee thought might tend to produce a new supply of housing accommodations. In a recently published report on

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19201 NEW YORK LEGISLATURE ACTS ON HOUSING 763 the New York housing crisis the city club of New York calls attention to the fact that before the war about $75,000,000 per year was being put into the construction of tenement houses in New York City. In 1914 new apartments were thus provided for 20,577 families and in 1915 for 32,617 families. By 1919, however, this had fallen off to a point where new apartments were made ready for only 1,481 families which was considerably less than the number of apartments actually destroyed during the year to give way for business or other uses. This same report says that before the war the average proportion of vacancies in all tenements was .056. By 1919 the margin in the tenement houses built within the past twentyyears had fallen to .0006. This year the margin in habitable buildings has been practically wiped out. Obviously without the possibility of change usually afforded by vacancies the landlord would have the tenant completely in his power were it not for special emergency legislation. I1 The legislature at the special session refused to approve a much advertised plan for exemption of real estate mortages from the state income tax, The purpose of this suggestion had been to overcome the scarcity of money in the mortgage market. It was generally recognized, however, that the measure would be ineffective unless followed by similar exemption from the Federal income tax law. Advocates of the measure contended that while aiming only at mortgages on new houses it would be necessary to include all other mortgages, old and new, whether on dwelling or business properties; otherwise the wish of mortgage holders to place their money where it would be tax exempt might create a panic in the calling of mortgages. It was calculated that as applied to New York city this would mean the exemption of from forty to fifty dollars of income on existing properties to every dollar of income from the much desired new houses. Some objections to this income tax proposal were brought out in the city club report and others at the hearing in Albany. The state reconstruction commission in its report of last winter had emphasized the need for establishing state and local housing boards to follow up this subject. They were recommended to the legislature but it refused to adopt the proposal. This refusal was doubtless based partly on a lack of inclination to carry out any suggestion emanating from any commission appointed by the governor, but still more by a very evident reluctance in all parts of the state outside of NewYork city to deal with matters of housing along new lines. This may forecast the probable attitude of the next regular session in regard to a proposed constitutional amendment to make it possible for state or municipal credit to be used for promotion of housing activities. On the whole the governor and the legislative leaders worked harmoniously and the legislature stood ready to pass any bill recommended by the joint housing committee provided it was made to apply only to New York city and the surrounding metropolitan area. The pressing situation existing in the city is represented by the fact that about one hundred thousand dispossess notices had been served for October 1. In fact this condition was so acute that legislative leaders were carried much further in their landlord and tenant legislation than they had had any intention of going. Without going into great detail it

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764 NATIONAL MUNICIPAL REVIEW [December may be enough to say that these recent acts of the legislature seek in substance to abolish contract relations between landlord and tenant for a period of two years, especially so far as the amount of rental is concerned. In all summary proceedings for dispossession the tenant may interpose a defense that the rent is unreasonable and the agreement oppressive. The landlord must then file a detailed statement of his investment, income, expenses, etc., and the burden is upon him to make out a prima facie case of reasonableness. Provision is also made that where a tenant holds over after a termination of his lease the landlord may not demand possession except on one of three grounds. He must allege and prove either that the tenant is objectionable, or that the owner and his family wish to occupy the premises themselves, or that the building is to be demolished to give way to new construction. Some doubt has been raised as to the constitutionality of these measures in so far as they affect tenancies based upon definite contracts. Doubt has also been expressed as to the constitutionality of one of the acts which seeks to impose upon ejectment proceedings in the supreme court the same restrictions as to hold-over tenants which have been applied in another act to the special summary proceedings. It is generally conceded that the summary dispossess proceedings being a special remedy may be strictly limited or done awaywith altogether. The immediate effect of this set of bills has been to prevent wholesale evictions on October 1. I11 Three things were done at the special session which look toward stimulation of house construction. In the first place definite provision was inserted in the rent laws of the special session, and also in others which had been passed last winter, that these restrictions on the landlord should not apply to new housing accommodations built under the existing high costs. It is recognized that the pressure of demand has become overwhelming but that, chiefly due to the abnormal cost of construction, the law of supply has not responded in the usual way and must have stimulation. Aside from a minor measure in regard to investment of certain public funds in the securities of a hitherto rather inactive institution, known as the state land bank, the only other action taken toward securing a new supply of housing was an act permitting the local authorities in a city, county or village to exempt from all local taxation until January 1, 1938, new buildings planned and used for dwelling purposes. In order, however, to get the advantage of this exemption such new buildings must have been commenced before April 1, 1988, and completed within two years after commencement. In New York city the rate for local taxation is more than .025 and is going up. As New York real estate is assessed at 100 per cent it is obvious that this exemption will mean an accumulated saving of taxes which, in the course of the period of exemption, would amount to fully one-fourth of the entire cost of the building. From the point of view of a man building for his own use this inducement is most obvious. For an organization building with the intention of renting it would be of material aid both in Gguring out a satisfactory balance sheet and in securing a larger mortgage loan. Lenders are at present very cautious about lending even up to 50 per cent of the cost of the building, because they fear that lower produc

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19201 SERVICE tion costs later on may bring down the value of their security. The tax exempt building would have a more secure value and if the saving in taxes is applied toward amortization of the mortgage the margin of security increases each year. The speculative builder who constructs to sell will be better off because with the exemption feature he can get a much better price for the completed building. Public revenues are not greatly impaired for the reason that without some such encouragement the building will not SERVICE AT COST AT COST 765 be done and with it land values in sections where there is extensive construction will be very materially increased. The increased land values would, of course, not be exempted. If the board of aldermen and the board of estimate of New York city take favorable action on this statute it is believed by many that this factor, taken in combination with an expected moderation in the prices of building materials, will produce a widespread resumption of building activities during the coming year. IN LOCAL TRANSPORTATION BY DELOS F. WILCOX New Ymk Analysis of the plan recommended by Federal Electric Railways .. Commission as the solvent of street railway dificulties. :: .. SERVICE AT COST DEFINED IN its report to the president, the Federal Electric Railways Commission defines the service-at-cost contract, by the enumeration of its “ mainfeatures,” as follows: (a) Fair valuation of the property; (b) Capitalization to conform thereto; (c) Agreed return upon capital; (d) Public control of capital issues, and, to a certain extent, over expenditures; (e) Public supervision over management, operation and service; (f) Automatic changes of rates to meet fluctuating economic conditions, and to insure a proper return on the value; (9) Private operation, subject to the right of the municipality to purchase the property at its value or upon an agreed price; (h) Reduction of taxes and assessments. SERVICE AT COST DISCUSSED Then the commission says : The service-at-cost contract is still in its experimental stage, and naturally a number of criticisms have been made of it. These have been considered, but with the limited experience under this contract we believe that the criticisms are more theoretical than real. If these defects prove to be substantial and result in unduly increasing the cost of service, they can be removed by improved regulation, but if they cannot finally be avoided. then it would seem that the public has ample protection in the contract’s purchase provisions. Generally speaking, the main criticism of this form of contract is that it tends toward inefficiency and uneconomic operation; that it contains no provision for the control of strikes or uninterrupted service, and that labor and management may co-operatively increase the cost of operation to the point where the public may be unduly burdened. From the point of view of credit restoration, the outstanding advantage of this contract is that rates are automatically adjusted to meet changing operating conditions. We are inclined to think that the assurance of an automatic adjustment of fare will do more than any

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NATIONAL MUNICIPAL REVIEW [December thing else to restore the confidence of the investor in these properties. Public confidence will be immeasurably strengthened through the valuation of the properties, because the Egure that is established constitutes the basis of the return to the investor and fixes, at least, the minimum price which the public will be obliged to pay if, at some future time, it should decide to purchase and operate the property. When the value is thus fixed there can be no further dispute as to capitalization or excessive profits, because the people will how just what they are paying for. The controlling element in its favor is the restoration of public confidence in the corporation due to the removal of those elements of friction which have so frequently engaged the attention of the public. It might also be said that to a certain extent it removes the railways from the idea of speculative gain and places them upon a common-sense business basis where the people pay for the service they get and where the opportunity for large profits no longer exists, since economies and lower operating costs are reflected in reduced charges for service. When the contract is once established the opportunity for municipal corruption is reduced to the minimum. We strongly recommend the principles of the service-at-cost contract, not as the only solution, but as one means of solving a very di5cult problem. In cases where the electric railways operate in more than one municipality and between different municipalities, such service-at-cost contracts can properly, in our judgment, be made only with the public service commission, and in such cases the provisions of the contract should apply in any particular community to the system as a whole rather than to its individual parts. The commission states that “ practically all of the witnesses for the electric railway industry favored service-atcost franchises,” and further states that the principle of service at cost is back of all public service commission regulation. On this ground it contends that the idea of service at cost is not new, but that the new thing is the method provided for carrying out that principle through contracts with devices “for automatically and quickly adjusting price to cost.” It will be observed that “private operation” is one of the characteristics of the service-at-cost contract as the commission defines it. Yet in Massachusetts the service-at-cost plan was put into effect on the Boston and Bay State lines through the state’s direct assumption of the operation through boards of public trustees. Evidently this Boston arrangement is not the “pure quill” service-at-cost plan that the commission favors; for the commission elsewhere in its report indicates that it is very skeptical about public ownership and operation and believes that the solution of the electric railway problem can best be worked out under continued private management. VALUATION IS THE CORNER-STONE The determination of the amount of the investment to be recognized as a basis for the adjustment of rates and for ultimate purchase is the cornerstone of a service-at-cost agreement, whether we look at it from the point of view of the street railway‘ company or from the point of view of the community. The valuation is the chief stumbling-block in the way of an amicable settlement of the public relations of a privately owned utility. The valuation of a property rendering an essential public service, with many of the characteristics of monopoly, is always a complex and difficult problem, but the ordinary complexities and difficulties have been multiplied by the abnormal price conditions growing out of the world war and by the confused status of valuation law and procedure in the United States to-day. The admitted over-capitalization of the early days of street railway development has engendered a spirit of distrust and antagonism on the part of the public, and this spirit is sharpened

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19201 SERVICE by the efforts of the companies to take advantage of the reproduction-cost method of valuation as a means of absorbing the inflation in their securities. The first feature in the service-atcost contract mentioned by the commission is “fair valuation of the property.” In every practical application of the plan it is of the highest importance to know what this phrase means. The Federal Electric Railways Commission “discouraged ” the introduction of testimony on the subject of valuation, called attention to the fact that in the process of appraising the steam railroads of the United States the Interstate Commerce Commission has made an exhaustive study of the principles of valuation for rate-making purposes, expressed the opinion that “the decisions of the Interstate Cornmerce Commission, based upon long experience and investigation, will in large measure settle the standards of valuation,” and suggested that municipalities and states engaged in fixing the values of electric railways by arbitration or otherwise should familiarize themselves with the Interstate Commerce Commission’s practice, experience and decisions in valuation cases. Particular reference was made to the Interstate Commerce Commission’s report in valuation Docket No. 2, Texas Midland Railroad. AT COST 767 ORIGINAL COST A PRIMARY FACTOR That the Federal Electric Railways Commission felt it necessary to hold out a warning signal to electric railway companies to restrain their passion for overvaluation is manifest from certain things contained in the commission‘s report. In one place it says: Service-at-cost plans have been recently rejected by popular vote, largely on the issue of valuation, in Chicago, Denver and Minneapolis. The public, justly or unjustly, has become so suspicious of the electric railway companies that it may be expected to reject any service-at-cost or public ownership question submitted to popular vote, no matter how fairly the plan may be formulated, if they are not thoroughly conmnced that the capital item has been fairly and honestly arrived at. (Italics are mine.) Again, in the course of its reference to the railroad valuation work of the I. C. C., the commission says: The first requirement of the valuation act is for finding of original cost. The commission is reporting original cost as fully as it possibly can be obtained from the best available evidence in each particular case. In its valuation proceedings it has been earnestly contended that the cost of reproduction new as of the date of inquiryshould be taken to be the value of the property. Others have contended with equal earnestness that the value of the property should be limited to the original cost, as this item represents the money which has been actually invested by the stockholders and bondholders in the property. The rapid increase in the cost of labor, supplies and material during and subsequent to the war period seems to have served as a peculiarly vivid indication that the original cost is a primary factor in finding value for rate-making purposes. Whatever else may be said of the recommendations of the Federal Electric Railways Commission, the country is at least to be congratulated that a report containing these statements with respect to valuation has been issued, signed, among the rest, by Mr. Philip H. Gadsden, of the United Gas Improvement Company, representing the American Electric Railway Association, and Mr. Charles W. Beall, of Harris, Forbes & Company, representing the Investment Bankers’ Association of America. This fact alone constitutes the sharpest kind of a rebuke for the extravagant claims usually put forward by street railway companies with respect to the value of their property in their efforts to negotiate serviceat-cost agreements for the purpose of securing an effective guaranty for

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768 NATIONAL MUNICIPAL REVIEW [December their outstanding issues of stock and bonds. It will be quite surprising if these portions of the commission’s report are heavily stressed by the electric railway companies in their serviceat-cost propaganda. THE RATE OF RETURN Another fundamental element in a service-at-cost contract is the (‘ agreed return upon capital.” The commission does not go into details about the rate of return, and makes no effort to be specif% as to what that rate should be. It does state emphatically, however, the fact that “the electric railway industry as it now exists is without financial credit,” that ((the electric railways must expand to meet the growing needs of their communities ” and, therefore, that “the first essential is to restore credit in order to obtain necessary new capital for the extension and improvement of service.” The commission says : It is an axiom that property devoted to the public use should secure a fair rate of return. Where money is represented by bonds the return is a part of the contract and is not changed during the life of the contract. Where capital is represented by stock the rate of return may vary according to the operating or financial conditions, and naturally it should compare favorably with the income upon other classes of investment. The undisputed testimony proves that the rate must be certain as well as reasonable to attract capital and that the absence of either of these essentials will frighten the investor away. It may be a lamentable fact, but it is nevertheless true, that most of the electric railways are obliged to go to markets outside of their territory to secure new capital; and under existing circumstances the investor is no longer willing to place his money in speculative properties. The commission then goes on to express the opinion that “a fixed franchise fare fails to meet the requirements of the industry.” In its discussion of the service-at-cost contract, already quoted, it is “inclined to think that the assurance of an automatic adjustment of fare will do more than anything else to restore the confidence of the investors.” Discussing specifically the “cost of new money,” the commission says : The destruction of capital incident to the world war and the unprecedented demand of the government and industries for money resulted in largely increasing the interest rate for loans. More attractive loans are now absorbing money available for investment, leaving the electric railways where, even with credit restored, they would have to compete in the money market with prosperous and unregulated enterprises. From these statements it will appear that another dream of the companies’ valuation experts has failed to get recognition as a robust reality. We see nothing here about the doubling of the rate of return on account of the decrease in the purchasing power of money. We do not find any sanction for the theory that the “wages” of capital should be increased to correspond with the increase in the wages of labor. The commission even intimates that rates of interest on outstanding bond issues are to be left undisturbed! It does not even specifically recommend that the rate of return upon the existing investment represented by capital stock should be increased to the level required to attract new money for necessary additions, betterments and extensions in these abnormal times, although it does intimate that the rate of return on capital represented by stock may “vary” according to conditions, and should “compare favorably” with the income upon other classes of investment. It is emphatic, however, that the rate of return must be certain as well as reasonable to avoid frightening the investor away. On the whole, it is not quite clear how the commission would handle the matter of the rate of return.

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19201 SERVICE THE CLEVELAND SEVEN PER CENT RETURN PROCEEDING In this connection, certain things that have happened in Cleveland recently are highly significant. In the summer of 1919, just about the time when the Federal Electric Railways Commission commenced its investigation, the Cleveland Railway Company demanded an increase in the “wages of capital” as a condition of its consent to come to a settlement with its striking employes on the basis of higher rates of pay for labor. The company asked that the rate of return on its capital stock be increased from 6 per cent to 7 per cent. This issue was not subject to arbitration under the terms of the Tayler franchise, but, as a part of the strike settlement, the city council agreed to submit the question to a board of arbitration constituted in the same way in which boards of arbitration have from time to time been appointed under the terms of the contract. This proceeding was referred to in the testimony before the commission, but the board of arbitration did not file its report until December, 1919, about two months after the close of the commission’s public hearings. The arbitrators, by a majority vote, awarded to the Cleveland Railway Company the 7 per cent return for which it had contended. This required the passage of an amendment to the service-at-cost ordinance, and this amendment became subject to the referendum. For the first time in the history of service at cost in Cleveland, an award by a board of arbitration was submitted to popular vote, and on August 9, 1920, less than two weeks after the Federal Electric Railways Commission had completed its report to the president, the electors of Cleveland rejected, by a vote of 35,964 to 10,660, the recommendation of the arbitrators that the rate of return on AT COST 769 the stock be increased to 7 per cent. The case of the Cleveland Railway Company is quite exceptional, for the reason that the company’s capital value is represented by some $28,723,500 of capital stock as against only $5,495,000 of mortgage bonds. One of the chief arguments against the increase of 1 per cent in the rate of return upon the capital stock was that it involved the payment annually of $287,000 additional return to the old stockholders as a means of getting the “interest” rate up to a point where it would enable the company to sell more capital stock at par. The language used by the Federal Electric Railways Commission in its report, while not entirely clear, would seem to indicate that, in its opinion, the rate of return on stock already outstanding should be increased so as to keep the market value of the stock up to par. From any point of view these recent developments in Cleveland seem to mark the beginning of a breakdown in the service-at-cost plan “in the house of its friends.” From the company’s point of view it is claimed that the refusal of the people to authorize an increase in the rate of interest makes the sale of additional securities under the Tayler plan difficult, if not impossible. From the public point of view, the company’s insistence that the original contract should be amended so as to benefit the old stockholders, who put in their money under an agreed rate of return, indicates that after all a service-at-cost contract, like any other sort of a franchise contract, is not regarded as enforceable when any of its important conditions go against the company. THE FLEXIBLE FARE WITH NO MAXIMUM Another main feature of service at cost as recommended by the Federal commission is a flexible fare without

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770 NATIONAL MUNICIPAL REVIEW [December any maximum limit. The Tayler plan in Cleveland includes a top limit for the fares, but in most of the service-atcost plans that have since been adopted, including those in Cincinnati, Youngstown, Montreal, Boston, and on the Bay State lines, no maximum fare is prescribed. In fact, it is the theory of service at cost as understood by the electric railway companies, and as recommended by the commission, that the fares shall be adjusted from time to time to meet the full cost of service, no matter how high they may have to go to do it. The Montreal Tramways Commission, by which the new Montreal service-at-cost contract was prepared, entered upon its work early in 1917. At that time I recommended to that commission the principle of the flexible fare, saying that the cost of service should first be determined, and that then the rate of fare should be fixed to meet it. Conditions have been changing very rapidly. Even three years ago it hardly seemed possible that in a great urban community the full legitimate cost of surface street railway transportation could become so great as to exceed the reasonable worth of the service to the car riders. Since then, however, costs have been mounting so rapidly that it has become a very serious question in many communities whether a service-at-cost plan wholly dependent upon the fare payers for its revenues is everywhere practicable, unless the fundamental usefulness of the street railway as a public utility is to be sharply curtailed. THE POLICE POWER ABROGATED The Federal commission’s report does not suggest any limitation whatever upon the rates of fare to be charged except the cost of the service. It is apparent, therefore, that with such a service-at-cost plan in effect the electric railway companies would be definitely relieved of one of the fundamental limitations laid down by the United States supreme court, namely, that the rates charged for public utility service must never be more than the service is reasonably worth, even though the utility is thereby kept from earning a full return upon the investment. Until recently, thereasonable worth of the service from the point of view of the consuming public has been taken care of by the fixed five-cent maximum fare, and, under commission control, the worth of the service has held the status of a more or less hypothetical and sometimes entirely forgotten issue. Because it has been generally assumed that under all ordinary conditions the necessary cost of utility service could not be more than the worth of the service to the individual patrons of the utility, commissions and courts, before the war, were not called upon very often to apply in practice this fundamental limitation upon street railway charges. Now that the time is ripe for its application, the adoption of the service-atcost principle, without any maximum limit on fares, takes the companies out from under the exercise of the police power and places the public in a position where it may suffer incalculable harm from excessive transportation charges. SERVICE AT COST AND PUBLIC OWNERSHIP The Federal commission, though recognizing that the service-at-cost contract is “in the experimental stage,” strongly recommends it, and minimizes the importance of the criticisms that have been made against the plan, deeming these to be “more theoretical than real.” At the same time, the

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19201 SERVICE AT COST 771 commission indicates that it is decidedly averse to the adoption of the policy of public ownership and operation. A properly protected service-at-cost plan, under conditions that are likely to arise in many communities, may be highly advantageous as a stop-gap on the way to public ownership, but from the point of view of efficient government the successful administration of a service-at-cost contract can hardly be maintained in the long run with any less degree of technical skill, courage, initiative and political independence than is required for successful public operation of a municipal street railway system. The one thing that will sometimes make a service-at-cost contract more practicable than immediate public ownership and operation is the fact that it enables the municipality or the state to avoid, for the time being, the necessity of raising the necessary funds for the extinguishment of the private interest in the local transportation system. In ‘many cases this initial financial difficulty is likely to be controlling, but a service-at-cost plan that merely reserves to the municipality the right, in words, to take over the property at a fixed valuation will ultimately fail to protect the public interest unless it is coupled with definite and practical measures by which the city can readily exercise this option whenever it desires to do so. In this connection it is noteworthy not only that the commission is opposed to public ownership, but that its recommendations are likely to be used to make public ownership more difficult in the future, instead of less so. It says that “public confidence will be immeasurably strengthened through the valuation of the properties, because the figure that is established . . . Jixes, at least, the minimum price which the public will be obliged to pay if, at some future time, it should 2 decide to purchase and operate the property.” (Italics are mine.) As already pointed out, the commission indicates its opinion that original cost is a primary factor in finding value for rate-making purposes. The commission’s recommendations are not very well knit together. They show the evidences of piecemeal construction and compromise, where clarity is quite essential. I do not doubt that the commission’s endorsement of service at cost will be used as an argument for postponing public ownership while “sewing up” the future against its dangers-to the companies. SERVICE AT COST AND STATE CONTROL Another rather remarkable inconsistency is shown in the commission’s pronouncements on the subject of state versus municipal control of utilities. It sees no “insuperable objection to a large wide-awake city having exclusive jurisdiction over the rates and services of public utilities,” but in general it favors ultimate state control, based upon some plan of cooperation between state and local authorities. Again it says: ‘‘Where the street railway company operates wholly within one city there can be no insuperable objection to exclusive municipal control when the people are ready and willing to exercise it.” (Italics are mine.) It then goes on to quote from Secretary Baker’s testimony about Cleveland’s experience, as if that were an illustration of its point. As a matter of fact, the Cleveland Railway Company is not confined to the city limits of Cleveland, but operates in several adjoining municipalities. When we turn again to the service-at-cost discussion, we find the unequivocal statement that “in cases where the electric railways operate in more than one municipality

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772 NATIONAL RIII.3-ICIPAL REVIEW [December and between different municipalities, such service-at-cost contracts can properly, in our judgment, be made only with the public service commission, and in such cases the provisions of the contract should apply in any particular community to the system as a whole rather than to its individual parts.” That knocks out municipal control in Cleveland! It makes it impossible not merely in Kew England, New Jersey, and upstate New York, but in Pittsburgh, Detroit, Milwaukee, Xuneapolis, St. Paul, the Kansas cities, and I fancy in almost every city in the country, big or little. Thus we see that the corollaries of the recommendations and suggestions of the Federal commission, so far as the service-at-cost plan is concerned, lead us into a labyrinth of doubt upon every subject except the guaranty of capital and the restoration of the investor’s confidence in street railway securities-and even there, although the general purpose is clear, we are not altogether sure of the practical result. THE EFFECTS OF TAX LIMITATION IN OHIO CITIES BY RAYMOXD C. ATKIXSON Western Reserve University Ohio still retains the uniform general property tax with a rigid tax limitation. Cities faceJinancia1 ruin while rural and urban groups wrangle in the legislature. :: PROBABLY the financial problem facing American cities has arisen in its most acute form in Ohio. Ohio cities have for ten years been laboring under the handicap inflicted by the so-called Smith 1 per cent law, which throttles down the tax revenue of municipalities to apoint far below the present requirements of good government. THE SMITH ONE PER CENT LAW The Smith law was enacted in 1910 when the taxation machinery of the state was undergoing a general overhauling. Prior to that time property had been assessed at only a fraction of its actual value. In the reassessment of 1910, however, an attempt was made to secure a 100 per cent valuation of real estate and to force out of concealment a larger amount of personal prop.. .. .. .. .. .. .. .. .. .. .. .. erty. To reassure the taxpayers the legislature enacted a tax limitation of 1 per cent. Within the prescribed 1 per cent levy the greater part of the tax revenue of local governments and a considerable share of the state’s income were to be obtained, with the exception that an additional levy might be imposed to meet interest aild sinking fund charges upon debts previously incurred or which might thereafter be incurred by popular vote. As though this restriction was not sufficiently severe, the legislature inflicted a further check upon municipal extravagance. The total receipts of cities from taxation for 1911 were not to exceed the amount collected in 1910, and only a slight increase could be made in 1912 and 1913 after which the total was to remain stationary. Such a stupid attempt to stop the wheels of municipal progress

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19201 THE EFFECTS OF can scarcely be imagined, yet it remained upon the statute books of Ohio for three years. Yielding to the pressure of city officials the legislature finally repealed that particular provision in 1913, but the percentage limitation continued in force. A further modification was also secured which enabled cities by popular vote to raise the maximum tax limit to 15 mills. Beyond that point the tax rate might not go, except to meet certain emergencies such as floods and epidemics. Fifteen mills may seem an adequate provision for municipal revenue, but it must not be forgotten that the city is only one of several agencies of government among which the 15 mills is parcelled out. The apportionment of the tax rate is entrusted to a county budget commission consisting of the auditor, treasurer, and prosecuting attorney, all county officials. The requirements of the state are first provided for, and needless to say, the budget commissioners see that the county receives second consideration. The requests of the school board usually come next in the order of preference, while the city, library board and other agencies of government have to be content with what remains. HOW TAX LIMITS WERE EVADED For a time cities sought to overcome the handicap under which they labored by failure to provide for the retirement of their bonds. Debts were rehnded as they fell due. In this way deductions for sinking fund charges were kept at a minimum, and the revenue available for operating purposes was increased. Such a policy must naturally be short-lived. It was not only bankrupt finance, but in direct conflict with a clause of the state constitution as well. This practice continued, nevertheless, until the state supreme TAX LIMITATION 773 court in 1916 definitely declared that full provision for interest and debt retirement took precedence over all other expenditures. In 1917, the first year that this requirement was observed, the operating revenue of the city of Cleveland derived from the general property tax fell off almost one-third, and there was a corresponding increase in the levy for the sinking fund. This resulted in a reduction of about one-fifth in the total operating revenue of the city. According to statistics published by the state auditor in 1917, if all cities had met the interest on their bonds and the entire cost of debt retirement from taxation, debt charges alone would have exceeded the total tax revenue of the 80 cities of Ohio by $180,000. Naturally full compliance with the supreme court’s decision was impossible. Cities were confronted with the alternative of refunding their bonds as they fell due or borrowing money for running expenses. The large cities compromised by doing both. In that way immense floating debts were incurred which cities were utterly incapable of paying, and the legislature was forced to authorize the issuance of deficiency bonds. Other factors also played a part in the creation of this situation. In the first place the assessment roll for the general property tax did not keep pace with expanding governmental needs. Revaluations were infrequent and a 100 per cent assessment was seldom actually secured. Another important factor was the accelerated growth of municipal activities after 1910. In many instances the state itself imposed additional burdens upon cities. Large expenditures for water purification and sewage disposal were ordered by the state board of health. Heavy debts were also incurred for street improvements and public buildings, thus in

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774 NATIOXAL MUNICIPAL REVIEW [December creasing the fixed charges of local government. Finally a modification of the state liquor license regulations reduced revenue from that source. FLOATING DEBTS PERIODICALLY FUNDED As a result of this combination of circumstances Ohio cities have for several years been amassing floating debts which the legislature has periodically permitted to be funded with deficiency bonds. Cleveland began to run behind as early as 1915, even before the supreme court decision as to sinking fund requirements. The other principal cities have one by one fallen into line. In Dayton the city manager by vigorously cutting expenditures avoided the difficulty until 1917. Springfield has escaped with a deficiency of only a few thousand dollars, while Sandusky has an actual surplus. Most of the non-manager cities have been less fortunate. At the close of 1919, Cleveland had outstanding $7,000,000 of deficiency bonds, almost one-tenth of its total debt, and has since been compelled to issue $5,750,000 additional bonds to meet running expenses. (The estimated tax income of the city for operating purposes will scarcely more than cover the cost of the police and fire departments alone.) In Cincinnati a floating debt of $1,340,000 was funded in 1917, and a deficit of about $3,000,000 is anticipated for the present year. Columbus was forced to issue $560,000 of deficiency bonds in 1919, but hopes to live within its income in 1920. In Toledo, a more rapidly growing city than Columbus, $850,000 of deficiency bonds have already been accumulated, with the likelihood of a large floating debt at the close of the current year. Nor is this condition confined to the larger cities alone. Some of the smaller municipalities have deficits which are almost as burdensome in comparison with their tax revenue. It might be supposed that such financial straights would lead to greater administrative efficiency. Certainly the necessity of economy is apparent. It is very doubtful though whether there has been any such result. True there has been a vigorous paring of governmental services, but that the work which is done is more efficiently handled is extremely unlikely. The spectre of bankruptcy does not necessarily prevent waste. The very impossibility of living on the existing income together with the recognized necessity of reducing services exerts a blighting influence. A hopeless, don’t care attitude on the part of officials is not unnatural. Furthermore the lack of funds furnishes a ready excuse for inefficiency which the citizen cannot easily refute. VOTERS DIVIDED ON RELIEF TO BE PROVIDED Confronted by this situation, what remedies have been applied? The truth is that only makeshift measures have thus far been adopted. The Smith law has from the start been attacked by the larger cities which realized the impossibility of performing their functions with the limited income available. The act has, on the other hand, been popular with the rural element which has a majority in the legislature. The country population cannot understand the immense financial requirements of the greater cities, and attributes their difficulties to extravagance, inefficiency and a failure satisfactorily to administer the general property tax. There is also a widespread feeling that a tax of 15 mills on a 100 per cent valuation of real estate is heavy enough and that additional

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19201 THE EFFECTS OF TAX LIMITATION 775 revenue should be obtained from other sources. Consequently until the present year all attempts to break down the Smith law limitations have met with failure. The validity of the claim that the burden upon real estate should not be further increased has been recognized by tax reformers. The financial difficulties of Ohio cities are not simply the result of tax limitation but of inadequate sources of revenue. How sufficient income can be secured through the general property tax without at the same time overburdening realty is a problem which has not been solved. Ohio relies chiefly upon the general property tax. In fact, it cannot do otherwise so long as the constitution remains unaltered, for it specifically provides that all taxation shall be by uniform rule. The attack upon the Smith law has, therefore, involved the question of classification of property and a revision of the whole taxation system of the state. The fight for classification thus far has not been successful. A classification amendment was submitted to referendum in 1918 and again in the fall of 1919. In 1918 it received a majority, but was later invalidated by the state supreme court. A second amendment, approved at the same election, according to the court, conflicted with the principle of classification, and inasmuch as the second measure obtained a larger popular majority the classification amendment had to give way. Another proposal was squarely defeated in 1919. Throughout the fight the farmers have been hostile to the plan and the state grange has led the opposition. The idea of uniformity in taxation seems to have a firm hold upon the rural electorate, in spite of the manifest injustice of the general property tax to the farmer in practice. A general feeling evidently prevails that the separate taxation of real and personal property would result in even greater discrimination against the former. Whenever the general property tax has been attacked, the farmer has parried with talk of more stringent administrative provisions to force intangibles out of hiding. It would seem as though Ohio, at least, had experimented sufficiently with tax ferret legislation. Until the farmer changes his views, the financial ailments of Ohio cities cannot saisfactorily be treated: The legislature has shown little disposition to work out a solution, although the problem has been before it for several years. Investigations have been made and cities have been allowed to explain their plight, but there is no painless method of extracting revenue for the government, and legislators shy at measures which too obviously increase the tax burden. Until th41ast session the legislature confined itself to temporary expedients in the form of acts authorizing the funding of current debts. It was hoped that these measures would tide cities over the war period. The continuance of high prices after the armistice, however, made it clear that a day of reckoning must come. Cities cannot long be financed with deficiency bonds. Unfortunately the legislature and the governor are of opposite parties. The governor is a Democrat, while the Republicans have a majority in both houses of the assembly. Under such conditions little co-operation can be expected. At the opening of the last session the governor was glad to urge upon the legislature the solution of the taxation question, but quite unwilling to present a plan of his own. He probably felt that it was good political strategy to allow the Republicans to demonstrate their inability to handle the problem and to cast the onus upon his opponents. The assembly lacked

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776 NATIONAL MUNICIPAL REVIEW [December competent leadership and floundered sadly. When the session closed the governor denounced the failure of the legislature to reconstruct the tax system, and the Republican state committee retaliated by condemning the lack of leadership on the part of the governor. Thus the buck was passed. THE GARDNER ACT A MAKESHIFT In spite of its shortcomings the session was not entirely fruitless. The enactment of a heavy automobile license tax and a new inheritance tax from which the local government receives one-half helps considerably toward replacing the former liquor tax. The way was also opened by which cities may vault over the Smith law limitations. A new measure, the Gardner act, allows taxing districts by popular vote to place their interest and sinking fund charges outside the 15 mill limit. A number of cities are now preparing to submit the question to referendum. If approved it will grant much-needed relief to municipal treasuries by permitting a considerable increase in the rate of levy for operating expenses. In many cases it will double the operating levy. The general property tax rate will be very much higher and the burden upon real estate decidedly severe. For that reason some di5culty may be encountered in securing popular approval of the change. The Gardner act is only a makeshift remedy at best, for Ohio must soon overhaul its entire system of taxation. A higher general property tax rate will inevitably cause complaint and may hasten a thorough revision of the system, but before this can be undertaken a constitutional amendment will be necessary. Considerable sentiment has developed in recent months in favor of an income tax. It has the endorsement of the state grange and was pressed by the rural element in the last session of the legislature, but the movement soon struck a snag. Banking interests were unwilling to accept an income tax so long as personal property remained subject to the general property tax. It was feared that an income tax might force the disclosure of bank deposits, and thus expose them to the high general property tax levy as well, which would almost be confiscation. This encounter merely serves to re-enforce the conviction that a classification amendment is a fundamental part of any constructive tax reform in Ohio. While the prospect nf modernizing the taxation system is considerably brighter, it is only because the financial condition of municipalities and school districts has become intolerable. The ten-year struggle of Ohio cities to live upon an inadequate income has been little less than tragic. If anything could prove the utter folly of tax limitations, Ohio's experience with the Smith one per cent law ought to be sufficient. The rural legislators in their kind endeavor to save cities from their own rapacity have nearly bankrupted a number of municipalities and have impaired services in many others. One need not be a socialist to realize the futility of such efforts. The activities of a city must inevitably grow more rapidly than the general property tax duplicate, and if progress cannot be bought with current revenue it will be purchased with bonds against the future.

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NEW MORTGAGES FOR OLD BY ARTHTJR C. COMEY1 Cambridge, Mass. The individual, short term mortgage is antiquated. Is it not possible to stabilize building loans at low rates through a Federal mort.. .. .. .. .. gage bank? .. HOUSES must be paid for. As the prospective owner seldom has more than a fraction of the cost, the balance must be borrowed. To insure an adequate supply of funds to loan requires modern methods of financing. Mortgages should be written for the full duration of the loan and should be steadily reduced by periodic payments. All house mortgages should be pooled under a mutual guarantee, and a single form of safe, easily negotiable bond issued to the lender. BORROWING MONEY FOR HOME BUILDING In this way may be eliminated one of the principal bugbears of house building, the difficulty of finding funds with which to pay for dwellings, though in the present acute situation it is hardly the most serious one. Whatever the reforms we may hope will be carried through in the social relations of home ownership, either independent or co-operative, it is evident that at the time of construction the majority of purchasers will be unable to pay down more than a minor part of the total cost. The rest must be loaned, in the expectation, let us Member, until its abolition, of the Massachusetts Homestead Commission; fellow, American Society of Landscape Architects; member, American City Planning Institute; secretary, Massachusetts Federation of Planning Boards. .. .. .. .. .. .. .. .. .. .. hope, that it will be gradually paid back as the occupant finds himself able to increase his investment. Note that this result is a most worthy one and a fundamental gain to society as now constituted. For if we have individual wealth at all surely the soundest system is that in which it is most evenly divided among all citizens. This cannot be brought about simply by the general holding of stocks and bonds, even government bonds: it involves the actual responsibility for real property. Aside from personal effects everyone uses at least three classes of property: that which shelters him, that which carries him and his goods to and fro, and that which is comprised in his means of livelihood. With his ownership in the two latter relatively untried fields this article is not concerned. Home ownership has had a much longer and more general try-out. Whether individual or co-operative it is peculiarly appropriate for the initial accumulation of the individual’s share in the world’s riches; for by investing in a home one “loans to himself,” eliminates all disparity of interest on his investment, and is in a unique position to conserve and actually enhance the value of his investment through caring for his property. The political and social values arising in a community of home owners need only to be alluded to to be appreciated. 777

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778 NATIONAL MUNICIPAL REVIEW [December As before stated the prospective owner now and for some time past has found difficulty in borrowing. This difficulty arises largely from the antiquated machinery still in vogue to effect such loans, namely the individual, short term, one payment mortgage. Certain agencies, notably the building and loan associations, or co-operative banks, as they are known in Massachusetts, loan on small houses for a long term and require periodical payments, thus reducing the loan gradually. But their loans are on an individual basis, with the attendant individual risk to the bank, and correspondingly high rates, and their funds are at present inadequate to finance a real building era. One class of mortgaged property is, however, breaking away from the old system and under federal organization is securing most of the benefits that are to be obtained from up-to-date methods. The Federal farm loan act, despite certain seemingly unnecessary complicating provisions, has stabilized loans on farm property at a lower rate than previously obtained and has ensured in all ordinary times an adequate supply of funds, besides giving the investor a much more satisfactory security than the old farm mortgage, in the form of a bond that is easily negotiable. Its working is indicated in some detail in the accompanying diagram. The writer does not believe that two such dissimilar types of property as farms and houses should mutually guarantee loans. In fact, the volume of business that the Federal land bank is already doing, combined with that of a corresponding Federal mortgage bank for houses, would be so great that the setting up of a separate organization will involve little or no waste, while effecting many minor benefits. The subject is so vast and intricate that it was the hope of those of us in the United States Housing Corporation who became interested in the subject at the close of the war that a joint high commission of senators, representatives and others would be empowered to make a year-long study before reporting a finished scheme for enactment. Along these lines Senator Kenyon introduced a bill in the 65th Congress, third Session (S. 5581), and a similar one in the (36th Congress, first Session (S. 168), but both died without action. Meanwhile, other agencies were seeking direct assistance, and several bills were quite far advanced during 1920, but none were free from grave defects and none were enacted. THE NECESSARY MECHANISM The vital points of a modern mortgage mechanism may be stated in a few lines: Mortgages for the Full Duration of the Loan. Nothing could be worse than the present twoor three-year system, which subjects the borrower to perennial fear of foreclosure. Steady Reduction of the Loan so that it will be wiped out at the end of the term. This is both an incentive to saving, and by keeping pace with possible depreciation permits a greater initial loan. Pooling of All Mortgages Under a Mutual Guarantee and Issuing Bonds. This both reduces the risk to the investor and therefore the rate of interest, and attracts a much wider field of investors, to most of whom a liquid investment, capable of being turned into cash on the street, is now considered almost an essential. Thus not only would more funds be available for building, but owing to the reduced competition for money the interest rate would be still further lowered.

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19201 NEW MORTGAGES FOR OLD 779 Farm loan bonds are on a 44 to 5 per cent basis, a rate which the proposed bonds should easily secure. To insure success the primary responsibility should be lodged in a group of Federal mortgage banks. Borrowers would usually find it advantageous to utilize intermediary agencies, either already in existence, such as the building and loan associations, or new limited dividend or co-operative associations or simple borrowers’ associations. In order that the banks may eventually be on an entirely self-supporting basis borrowers should be required to take up stock equal to say 5 per cent of their loan. This would also increase their sense of participation in the organization. At the outset the government would do well to supplement the initial subscriptions so as to create a large capital for initiating the project. A system of fourbanks, with branch banks, would avoid local pressure and yet meet the needs of the four principal sections of the American building world. The bonds should be available for government deposits and for purchase by Federal reserve banks, thus restoring mortgage loans to as favorable a position as that enjoyed by most other forms of investment. Those borrowing 60 per cent of the value of their house should pay but little more than the interest rate on the bonds. On new houses, however, 70, 80 per cent, or even higher might be loaned at sufficiently higher rates to meet the increased risks, thus overcoming a further obstacle in the way of new construction for those with little saved up: Supervision should be centralized in a United States home loan board, representing the president, the treasury, and the department of labor, so as to be uniform and above question. Proper standards of housing should be ensured both for the immediate protection of the loans and for the conservation of social values, which effect society over a period of years and therefore the ultimate value of the loan property as a whole. The bank inspector should make a single inspection for a11 purposes, preferably under the general direction of the department of labor’s representative; the establishment of the proposed permanent housing bureau would fit in perfectly to such a scheme. Many other details must, of course, be worked out before the project can be made “water-tight” and launched. The following outline will indicate most of those points that have seemed important: SW~Y OF ESSENTXAL FEATURES OF PROPOSED FEDERAL MORTGAGE BANK Board. Three governors, one appointed by the president, one by the secretary of the treasury, and one by the secretary of labor, and paid by the government. Appointee of secretary of labor to have special duties as to character of housing. O&e. Head office in Washington. Fow Banks. New York for New England, New York, Pennsylvania and New Jersey. Atlanta for Delaware, Maryland, District of Columbia, South Atlantic, Gulf States, Kentucky, Tennessee and Arkansas. Chicago for Middle Western states, including Missouri, Iowa and Minnesota. Denver for Texas, Oklahoma, Kansas, Nebraska, and Dakotas and west thereof. $$!O,OOO,OOO in shares having a par value of $5 each, to be offered to the public for subscription; the government taking all stock not subscribed in thirty days. Capital is increased by requiring all borrowers to subscribe and pay for stock equal to 5 per cent of the amount of their loans, which stock is returned when loans are paid off. Capital. Character Limitation, Cost of Loans, etc. 1. No loans at basic rate of interest to exceed 60 per cent of the appraised value of the property. On new houses ody loans for 70 per cent, 80 per cent, or 90 per cent to be at higher rates com

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780 NATIONAL MUNICIPAL REVIEW [December mensurate with risk. No loans to exceed 75 per cent to other than states, municipalities, housing societies with limited dividends and owners of lots for erecting houses for their own occupancy. 2. Basic interest charge not to exceed by more than 1 per cent the interest paid on the last issue of bonds made by the bank. 3. No loans to be for less than five years nor more than thirty years. No loans on property already built to be for more than twelve years. 4. All loans to be amortized at a rate which will wipe them out in the life of the loan. 5. All loans to be first mortgage upon income residence property already built or to be built with the aid of the loan. 6. No loans to be made unless property meets adequate housing standards of safety, durability, sanitation, convenience, and open spaces. A single inspection covering all factors to be made by bank inspectors under regulations of department of labor member of board. 7. Registrars to be appointed and paid by the government, to act as custodians and trustees of the first mortgages held as collateral for the issue of bonds. 8. Substitution by cash, United States government bonds or approved mortgages of same type permitted. 9. No loans to be made in any state where the mortgage laws are not adequate to protect the loans. Such laws to be passed upon by the officers of the bank with the advice of the attorney general of the United States. 10. The outstanding bonds at any time shall not exceed twenty times the capital and surplus of the bank. 11. No issue of bonds shall be permitted in excess of the value of first mortgages owned by the bank, except that at any time, in order to take advantage of favorable money market conditions, the bank may issue bonds not covered by the mortgages to an amount not exceeding its capital and surplus. The proceeds of such bonds to remain as cash or be invested in government securities until converted into mortgage loans. 1%. No loans shall be made in any one city to exceed one-tenth of the outstanding bonds. 13. Tomens titles or other titles acceptable under state laws will be accepted by the bank. 14. The borrower will be required to pay the cost of the appraisal, title search and recording fees. 15. All property offered for loan shall be appraised by a board of three appraisers appointed by the bank in any district. Said board of appraisers to be under bond to the bank and liable to fine and imprisonment for wilful overvaluation. The appraisal shall be subject to review by the bank at the expense of the bank. 16. No loan or loans to any individual shall be in excess of $l.OOO,OOO or less than $500. No loans shall be in excess of $6,000 per family housed. 17. The stock of the bank shall carry a double liability. Other Promsions. A reserve fund shall be created by appropriating 25 per cent of earnings to reserve until said reserve fund equals 20 per cent of the capital and thereafter by setting aside 5 per cent of earnings to reserve. When the reserve fund reaches 20 per cent, 25 per cent of all stock subscriptions received thereafter shall be used to retire the origina1 stock subscriptions of $%O,OOO,OOO, so that after a period of years the entire stock of the bank shall be owned by borrowers from the bank, who will receive by way of dividends the equivalent of a rebate, thus procuring the loans at a minimum cost. The government-owned stock shall not be entitled to dividends. The bonds of the Federal mortgage bank shall be available for the investment of trust funds, for security for public deposits and may:!. be purchased by the Federal reserve banks. The bonds of the Federal mortgage bank shall be free from all federal, state or municipal taxes.

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CITY MANAGER MOVEMENT PROGRESS OF MANAGER PLAN IN ONE HUNDRED EIGHTYFIVE CITIES B~ HARRISON GRAY oms Being the sixt?t installment of short stories compiled by the secretary of the City Managers’ Association. The next will be “Reports .. .. .. .. .. .. I. from Managers in the Prairie States.” :: .. M. BOROUGH, TOWN, AND CITY MANAGERS “DOWN EAST.” “DOWN EAST” is a general term, and its meaning depends upon where you are standing at the time. As applied to this series, it includes New England, New York, and Pennsylvania, with an appendix for Canada, whose four manager municipalities are in Quebec and New Brunswick, not far from the New England border. NEW ENGLAND New England holds the palm for conservatism, as prior to 1918, Norwood, Massachusetts, with a modified manager charter, was its only heretic to time-honored political traditions. At present, there are only five New England managers, with a sixth scheduled for appointment in January, 1991. MASSACHUSETTS WALTHAM. Population, 30,891. Commission-manager charter effective January, 1918. Henry F. Beal, the second manager, succeeded C. A. Bingham, January, 1920; salary, $5,000. Mr. Bingham has furnished the following summary of achievements : Salaries and wages increased from 1917 to 1919 54 per cent; materials increased 82 per cent; tax rate 8 per cent. Every street in the city oiled and practice of assessing abutters for $10,000 discontinued. Two new schools costing half a million built in 1919. Street department combined with sewer, water and engineering departments into a public works department, eliminating $1,800 in salaries and saving many thousands in combining available equipment and men, besides assuring permanent force of experienced men to be used on any work; $3,200 saved on early contracts for street oils for 1918 and 45,000 for 1920 contract. First municipal bulletin by employes initiated and continued monthly to an edition of sixteen pages or more. Departmental bowling leagues, superintendents’ dinners, and other forms of recreation used to bring about co-operative spirit between city officials. Seventy thousand dollars of government food and supplies sold the citizens at exact government prices, being the first city in New England and third in the country to do this; $3,000 saved the citizens on one carload of flour alone. Water consumption reduced 33 per cent by meters and leak surveys, and a $300,000 new supply indefinitely postponed. Branch library established and a series of lectures on municipal subjects by city officials carried on. 78 1

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782 NATIONAL MUNICIPAL REVIEW [December Contracts for practically entire supplies of 1920 materials closed in 1919 at a saving of thousands, in addition to securing early deliveries. Cash discounts continued to more than pay for entire purchasing force. Budget of $1,250,000 passed one week after the close of the financial year. Community street dancing and free movies successfully carried out. All city 05cials and employes made to understand that any success in the various departments was caused by their help, and citizens were encouraged in coming to the city hall and being personally conducted through any and all departments. City hall switchboard used as complaint bureau and also for outgoing inquiries as to the condition of municipal service rendered in various districts. Mr. Beal is 41 years old, trained in engineering, and served as director of public works prior to his promotion to the managership. Five Years of Satisfaction NORWOOD. Population, 12,627. Modified manager charter effective January, 1915. William P. Hammersley, the second manager, was appointed to succeed C. A. Bingham, March, 1918; salary, $4,000. Mr. Hammersley reports for the year 1919: Increased our surplus in the public service department from $93,700 in 1918 to $33,700 in 1919; Granted 21 per cent salary increases to heads of departments; %5 per cent to mechanics, and 34 per cent to laborers; Increased local tax rate but 10 per cent, while the state tax was increased 15 per cent and the county tax 35 per cent; Completed $300,000 high school building; Established laboratory for analysis of milk and foods and maintained regular inspections. A recent letter states : “The town of Norwood at its annual town meeting held March 11, 1920, passed unanimously every item in budget and warrant, not one dissenting vote being cast. This plainly shows the attitude of the citizens toward the ‘manager plan.’ The meeting was the most harmonious ever held.” Mr.Hammersley is 44 years old, with a long experience in municipal engineering. His salary has been increased three times during the past two years. MANSFIELD. Population, 6,010. The commission-manager plan as provided by state law was adopted at a town meeting July 12, 1920, by vote of 508 to 255. Five selected men will be elected in January, 1921. They will appoint a town manager. MAINE City Finances Put on Sound Basis AUBURN. Population, 16,985. Commission-manager charter eff ective January, 1918. Edward A. Beck, the second manager, was appointed February, 1919, to succeed Harrison G. Otis. He was followed in September, 1920, by Horace J. Cook; salary, $4,000. The tax rate for the year 1919 was increased from 234 mills, the lowest of anycityin the state, to 31 mills, so as to permit liquidation of a large inherited floating debt and much needed public improvements. Year’s expenditures $61,032 under appropriation, which includeda $17,003 emergency reserve fund. Revenue exceeded expenditures by $58,551. Cash balance $39,168. First year in over twenty which closed without a deficit. Eliminated floating debt in part from current revenues, the remainder by funding, leaving the city free from floating debt at close of year for the first time in its history. City’s net debt (liabilities less quick assets) reduced $14,636 after bonding for improvements, second successive

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19201 CITY MANAGER MOVEMENT 783 year compared to an increase each year since 1910, with an increase of $21,179 the last year under the old form of administration. Municipal proprietary interest (all resources less liabilities) increased $76,349.45, or over 12 per cent. Civil service for police and fire departments made operative. Improvements in health department with plans for a full time health o5cer. Establishment of highway patrol system. Highway maintenance improved at a net expense of $9,256 under preceding year. Year’s highway construction included Over two and one half miles, or approximately one half of city’s entire former paved mileage. Stone crusher plant established to furnish material for futureconstruction. Plans for establishing city blacksmith shop completed. Police alarm system installed. Plans under way for new modern fire alarm equipment. Street lighting expense reduced approximately 10 per cent. Plans for an office building to provide for all city offices under one roof. Mr. Beck is 34 years old and a graduate civil engineer. He served as borough manager of Edgeworth, Pennsylvania, and city manager at Goldsboro, North Carolipa, prior to his appointment at Auburn. He was promoted to his fourth city, Lynchburg, Virginia, in September, 1920, Mr. Cook being advanced from public service director to manager. CONNECTICUT WEST HARTFORD. Population, 8,854. Manager plan adopted by vote at thc town meeting July, 1919. B. I. Miller, manager; salary, $4,000. Mr. Miller is 51 years old, has had a general business training, and served eight years as first selectman of an adjoining town prior to becoming manager. On November 2,1920, a commissionmanager charter wm adopted by the voters, making West Hartford the second city to advance from the “ordinance” class to the list of “regular” commission-manager cities. VERMONT SPRINGFIELD. Population, 5,283. At a town meeting, the board of selectmen was empowered to employ a town manager. John B. Wright was appointed “municipal manager” April, 1920; salary, $3,600. A newspaper reporter from a neighboring city, in summing up the situation after a three months’ trial of the new plan, emphasizes the difficulty faced by the city manager, which is due to opposition of those constitutionally opposed to any change, those resentful of employing a “stranger,” and most of all, those who endeavor to hold the manager responsible for the fact that the millennium failed to dawn the morning of his arrival. The reporter found that the whole municipal system had been organized into departments and subdivisions, the accounting modernized and city purchasing placed on a business basis. As a whole, the citizens seem well satisfied with the change. Mr. Wright is 43 years old, a civil engineer, with extensive experience in highway and construction engineering. NEW YORK In New York the manager plan may be adopted by any one of three methods. 1. Special charter authorized by special act of the legislature; 2. Adoption by referendum of “Plan

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784 C,” the city manager plan as provided by general statute; 3. Creation of the position by ordinance, as the case of Watervliet, which adopted “Plan B” of the optional cities act, the Galveston style commission plan, the commissioners being permitted to manage city departments through such o%cers as they might appoint. Unfortunately, the optional cities act does not call for non-partisan election, yet in both Watertown and Watervliet, the citizens have elected commissioners on non-partisan tickets, in the former case overturning a very strong Republican majority and in the latter defeating a Republican-Democratic fusion ticket. Niagara Falls and Newburgh were the first two New York manager cities, the former having a special charter, the latter adopting “Plan C. ” To date but six New York cities have city managers. Settled Down to Steady Progress NIAGARA FALLS. Population, 50,760. Commission-manager charter effective January, 1916. Edwin J. Fort, the second manager, was appointed September, 1918, succeeding 0. E. Carr; salary $6,000. Niagara Falls has settled down to a steady progressive program which the manager states is “very substantial, but not spectacular nor startling.” During the past year more than 3,000 water meters have been added to the water system, and all services are now metered. Several acres of land have been acquired for the construction of a municipal yard, which will contain the asphalt plant and all equipment of the public service department, and will furnish a storage place for materials of all sorts. An extensive paving program has NATIONAL MUNICIPAL REVIEW [December been started, and four miles of construction authorized for this year. The city ordinances have been completely codified and will be published for the first time. This will place the police and the public in a better position for law enforcement. Modern zoning ordinances have been completed and enacted by the council. The city has established a motor repair shop and repairs its own motor vehicles with greater speed and economy. This repair shop is used by the board of education for instructing the high school pupils and others. Mr. Fort is 50 years old, a graduate civil engineer, with long municipal experience. Improvements Planned at Auburn AUBURN. Populat.ion, 36,142, Commission-manager plan effective by adoption of “Plan C” January, 1920. John P. Jaeckel, manager; salary $4,000. The first six months under the new plan, the city operated under the balance of the budget adopted by the previous administration. A program of street improvement has been developed to care for the paving which has been permitted to go to pieces during the past three years. It has been decided to place the fire department on a two-platoon system, and fire equipment will be motorized. Heretofore garbage and waste have been collected under a contract system, but these functions will now be taken over by the city. The manager is an advocate of nonpartisan city government, and feels that in spite of the handicap of the political features of the new charter, the city administration is pledged to a thoroughly businesslike conduct of affairs uninfluenced by political consideration. Mr. Jaeckel is 54 years old, trained

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19201 CITY MANAGER MOVEMENT 785 as a business executive, and has held responsible city and state positions. Better Government in Spite of Politics NEWBURGH. Population, 30,272. Commission-manager form effective by adoption of “Plan C” January, 1916. W. Johnston McKay, the fourth manager, was appointed January, 1920, and voluntarily had his salary reduced from $5,000 to $3,600. Those who have studied the Newburgh situation are convinced that partisan efforts have in no way diminished since the adoption of the manager plan. In fact, the position of manager has been considered the most attractive of political plums, yet in spite of this handicap, Newburgh has enjoyed better city government than ever before. The incoming manager explains his appointment as follows : “You know some men fish; some play poker, and I am one of the fellows unfortunate enough for a number of years to get mixed up with local city affairs, and after my complaining how things were being done by others, they at last gave me the. job and told me to do better.” Mr. McKay is 53 years old. He is reported to have resigned recently. A Typical “Inheritance” from Political Past WATERTOWN. Population, 31,263. Commission-manager charter by adoption of “Plan C” effective January, 1920. C. A. Bingham, appointed manager February, 1920; salary, $7,500. Mr. Bingham writes: “Watertown’s report wilrsimply be a story of our inheritance on January 1, 1920. The old administration forgot to mention the unpaid accounts amounting to about $135,000, which were actually filling up pigeonholes and files; $90,000 was on short term notes and the remainder was for monthly bills on labor and material, some three years old. One plumbing bill was five years old, and so on down to the city employe waiting four months for salary due. Add to this the tax limit fixed ten years ago, and a 50 per cent valuation and a wholesale water rate 50 per cent under cost, and a daily waste of 3,000,000 gallons (enough to adequately supply our city), and you can begin to see the “welcome to our city” that confronted the new commissioners. “Incidentally everybody purchased everything everywhere, and each separate department ‘kept’ its own books. Bills were paid by drafts on the treasurer who never saw them until returned from the bank, and we found one which has been out uncashed for three years. “The pathos of the situation was that while the ‘system’ was &s full of holes as a sieve in some ways, yet every little appropriation or fund was locked up in a separate account and drawn upon only by specially printed individual drafts. “The police department was 50 per cent undermanned, and with no equipment, while the fire department was costing nearly $4 per capita! “If we start to tell what we have already uncovered in past purchases, we would be sued for libel, so will close by stating that we have a commission of progressive business men who are disregarding the insulting slurs of the ex-politicians (who should be thankful they got out from under instead of now trying to throw sand in the gears). “We have installed centralized purchasing, uniform municipal accounting, 100 per cent valuation by appraisal, water meters installed, and new building methods; pushing completion of the hydro-electric plant, competent plumbing and wiring inspection, satisfactory garbage collections, enforcing fire prevention code, planning systematic

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786 NATIONAL MUNICIPAL REVIEW [December extension of paving, and by the elimination of the primitive methods in other departments hope to report definite facts andfiguresat thecloseof theyear.” Mr. Bingham is 36 years old, a graduate civil engineer, and served as city manager at Waltham, Massachusetts, 1918-19, and town manager at Norwood, Massachusetts, for three years previous. Non-Partisan Victory Over Party Politics WATERVLIET. Population, 16,073. Position of manager by ordinance effective January, 1920. James B. McLeese. The first manager died shortly after taking office, and was succeeded in June by Henry E. Gabriels; salary, $3,600. In June, 1919, the voters of Watervliet adopted “Plan B” of the optional cities act, by a majority of two to one, which provides for a mayor and two councilmen to serve as a commission. At the general election held in November, the “people’s candidates ” defeated the fusion political ticket by large pluralities, thus repudiating political domination. The mayor and the councilmen elect agreed to appoint a manager, but upon advice of the general attorney of the state they gave him the title of “general” manager, so as not to conflict with the term “city” manager as used in “Plan C,” although the powers and duties are the same. A city purchasing department is being created, and purchase of supplies will be centralized. The three big problems facing the new administration are: Equalization of property values; Improvement of city streets; Law enforcement. An effort will be made to annex by legislation part of the town of Colonie. SHERRILL. Population, 1,500. Special city-manager charter effective June, 1916. S. E. Northway, the fourth manager, was appointed August, 1920. The population of Sherrill consists chiefly of employes of the Oneida Community Company, and the manager is one of the company’s men, giving part time to city affairs. PENNSYLVANIA The Pennsylvania laws do not permit commission-manager government by charter, yet they allow the cities and boroughs to create the position of manager by ordinance. Unique Endorsement at Altoona ALTOONA. Population, 60,331. Manager plan by ordinance effective January, 1918. H. Gordon Hinkle, manager; salary, $7,500. Mi. Hinkle notes as the outstanding achievements in Altoona during the past year: Sinking fund earnings have been increased from $26 per thousand in 1917 to $43 per thousand in 1919 by close attention to investments. Tax assessment map of city completed. Tax valuation map of city started and nearing completion. Equipment ordered that will complete the motorization of the bureau of fire. Ordinance adopted requiring the metering of all industrial and commercial service and meters installed on approximately 800 such services. The sewage disposal plant built in 1914 at a cost of $131,000, but never used on account of defective construction, repaired and placed in service. Evidence that the manager plan is highly satisfactory to Altoona citizens is found in the fact that while state law has compelled the return of partisan city election, Altoona’s commissioners were all re-elected by almost unanimous consent. In fact, both Democrats and Republicans were placed in nomination on both tickets, and on the Democratic ticket a Republican re

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1!?20] CITY MANAGER MOVEMENT 787 ccived the highest vote, while on the Republican ticket a Democrat headed the list. Mr. Hinkle is 45 years old, a civil engineer with extensive experience in construction. Better Service at Lower Cost AMBRIDGE. Population, 12,730. Borough manager appointed under ordinance provision November, 1918. W. M. Cotton, the second manager, succeeded R. H. Hunter, February, 1920; salary, $4,500. An Xmbridge paper, in referring to the annual report of the retiring manager, calls attention to the fact that the big paving program adopted by the council has been carried out as planned; that a complete record of all streets has been made in blue prints available for work and ready reference. Nearly a mile of sidewalks was constructed last year, and more than two miles of sewer laid by the city at a saving of $71 0,000 under the lowest bid received. The collection of garbage was difficult and not satisfactory, due to shortage of labor, yet the expense was $3,000 less than the preceding year. Loss by fire was but $6,000, as compared to $17,000 for the year before. Health was protected by careful analysis of milk and itspection of the dairies. The balance sheet at the end of the year shows a gain in assets of $3,172. Mr. Hunter is 42 years old, a graduate electrical and sanitary engineer, with municipal experience. Mr. Cotton, who succeeds him, is 29 years old, trained in municipal research and served as borough manager in Edgeworth and Sewickley, Pennsylvania, two years prior )Lo his appointment at Ambridge. City Plan Financed by Popular Subscription SEWJCKLEY. Population, 4,955. Borough-manager plan by ordinance Octo3 ber, 1918. W. M. Cotton, who had previously served as borough engineer was appointed boroughmanager, resigning February, 1920. His successor has not been announced. Upon resigning, Mr. Cotton wrote: “During 1919 Sewickley has lived within its budget and enters the year with a balance in the general funds. “A health ordinance has been prepared and passed, regulating the sale of milk and cream, the collection and disposal of garbage and refuse and general sanitary conditions ofthe borough. “To my mind the biggest achievement of all is the increased interest created among the citizens to the extent that a fund of $3,000 has been raised by private subscription to finance a complete survey and city plan, the survey to cover all branches of government with recommendations for new organization, newprocedure and report forms. The lack of civic interest is the one big handicap in this vicinity, and this survey shows that some interest has been created and the survey will of course increase this when the report is finished.” Better Financial Condition Than Ever TOWANDA. Population, 5,610. Borough-manager plan by ordinance April, 1918. William T. Howie, manager; salary, $1,500. The Towanda Daily Review, in commenting upon the annual report of the manager, states: “The borough is at the present time in better financial condition than ever before.” Since the adoption of the horoughmanager plan the tax rate has not been changed and the balance on hand in the treasurer’s office at the close of 1919 is the largest yet. Last year more than twice as much was spent on streets as in 1917. Bridges have been painted, waterways

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788 NATIONAL MUNICIPAL REVIEW [December damaged by a flood years ago have been permanently repaired; new equipment has been purchased and, in fact, there has been a general house cleaning, so that Towanda is now “spick and span.” A contract has been let for brick paving, which will complete the two-mile stretch through the borough. A 23-acre park area has been offered to Towanda by the Lehigh Valley Road, and the offer will probably be accepted and the lands improved soon. To quote the local paper: “Towanda is among the leaders in the United States in the adoption of the borough-manager plan, but the time is coming when every town or city of any size will have one. They are becoming a necessity and the people are awaking to that fact. Several thousand dollars have been saved in this borough during the past two years through the efforts of Mr. Howie. Mi. Howie is 45 years old and experienced in highway construction prior to his appointment as manager. Systematic Health Supervision Pays EDGEWORTH. Population, 2,500. Borough-manager position by ordinance effective January, 1914. Robert Lloyd, the third manager, succeeded W. M. Cotton, March, 1920; salary, $3,000. Upon resigning Mr. Cotton wrote: “Without any increase in taxation Edgeworth has made up in one year the entire deficit from the war year, 1918, and on January 1, 1920, is in excellent financial condition. Health work has been closely followed up, with the result that we have the lowest number of communicable diseases of any year for the past five.” Loss Converted Into Profits MIFFLINBURG. Population, 2,000. effective January, 1919. W. D. Kochersperger, manager; salary, $2,500. Upon entering the office the manager found: “oEce methods of a vintage that would have been out of date thirty years ago; a complete lack of working plans of the various streets; the electric light and water accounts badly in arrears. These have now been collected and many other accounts considered bad have been turned into the treasury.” Competitive purchasing has yielded a material saving. A business survey has been made in the water and light plant, and by the equalizing of rates, plugging of leaks and some changes in operation, a marked gain was immediately noticed. Standard concrete paving has been constructed on the main street by town force, at an actual cost of $1.55 per square yard, with an added 24 cents for grading. Mifflinburg has lived within its income without increased taxation. Previous to the present management, the electric light plant was operated at a loss. This loss has been converted into a profit of 15 per cent and a corresponding profit in the water department of 85 per cent. A quarry has been opened up by the borough to still further reduce the cost of paving construction, and the pulverizing of raw limestone from the paving creates a by-product that has a ready sale to the farmers. The new form of government has met with popular approval. Mr. Kochersperger is 50 years old, a graduate of the United States Naval Academy and experienced in practical engineering and construction. CANADA Four Canadian municipalities have Borough-manager plan by ordinance adopted the manager plan. The first

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19201 CITY MANAGER MOVEMENT 789 of these was Westmount, Quebec, whose general manager charter dates back to 1913. The other three have appointed general managers by contract or ordinance within the past two years. NEW BRUNSWICK Mayor Changes Opinion WOODSTOCK. Population, 4,000. General manager employed through contract June, 1919. R. Frazer Armstrong, manager; salary, $3,000. In reporting the last annual town meeting the local paper comments upon the hearty support the town manager plan has received. The mayor, Thomas H. Noddin, is quoted as saying: “We tried to put the town on a business basis and at no time in the history of Woodstock has such good feeling existed. When the town manager proposition was before us I may say that for two years I was opposed to the idea, but after experience I have changed my mind. I am sure if we had adopted this system ten years ago we would have been the leading town in Canada to-day.” One unique feature of the new order of things commented upon by the paper is the fact that the manager in presenting his report “made no attempt to cover up any matters which received attention during the year.” A recent editorial of the Woodstoclc Press calls attention to the fact that the town manager form of government has reduced the tax rate to $1.66 on $100-the lowest rate in the Maritime Provinces. Mi. Armstrong is 30 years old, a graduate engineer, with broad experience, and served as cqptain of engineers in the war. EDMUNDSTON. Population, 4,000. Town manager, L. Leon Theriault, appointed February, 1920; salary, $3,000. Edmundston owns and operates its public utilities, and the water and light systems are yielding a profit. The sewers are being extended. Three miles of permanent roads and sidewalks have been constructed this first year. Mr. Theriault has a two-year contract with the city. He is 36 years old and experienced in engineering and highway construction. QUEBEC WESTMOUNT. Population, 14,579. Manager plan by charter April, 1913; George W. Thompson, general manager. GRAND ’&RE. Population, 9,000. Position of town manager created by charter February, 1920. Henry Ortiz, city manager, salary, $5,000. Mr. Ortiz is 38 years old, trained and experienced in civil engineering.

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DEPARTMENT OF PUBLICATIONS I. BIBLIOGRAPHY A list of civic literature published during the past three months. Only pamphlets and books are included. Magazine articles may be found through the standard periodical indexes. Compiled by Rebecca B. Rankin Americanization BARNES, M. C. Neighboring new Americans. New York: F. H. Revell Co. 1920. 68p. CITY CLUB OF CHICAGO. Ideals of America. Analyses of the guiding motives of contemporary American life by leaders in various fields of thought and action. Prepared for the City club of Chicago, 1916-1919. 1919. 324p. WOMAN’S COMMUNITY COUNCIL, MINNEAPOLIS. A guide for new Americans of Minneapolis, Minnesota. 1920. 16p. City Planning BARTHOLOMEW, HARLAND. A comprehensive city plan for East St. Louis, Illinois, prepared for the War Civics Committee. 1920. 63p. CHICAGO. PLAN COMMISSION. Proceedings of the nineteenth meeting of the . . . commission, held on April 9, 1920. Ten years’ work of the . . . commission, 1909-1919, A resume of the work on the plan of Chicago; presented by the executive committee to and approved by the . . . commission in session April 9, 1920. April, 1920. 69p. CITIZENS’ ZONE PLAN CONFERENCE. Chicago. Dec. 16-17, 1919, in co-operation with the city of Chicago and the civic organizations of the city of Chicago. Report of proceedings. [19ZO.] 94p. DENHAM, R. I. and WILKINSON, L. S. G. Practical chart of town planning. (Library of plates for architects, portfolio, no. 6.) London, England: Technical Journal, Ltd., 27 Tothill street, Westminster. 1920. INTERNATIONAL GARDEN CITIES AND TOWN PLANNING ASSOCIATION. Report of conference and annual meeting, 1920. 1920. 24p. MILWAUKEE, BOARD OF PUBLIC LAND COMMISSIONERS. Zoning for Milwaukee. Tentative report of the commissioners. June 21, 1920. 1920. 56p. 1 Librarian, New York Municipal Reference Library. NATIONAL CONFERENCE ON CITY PLANNINQ. Proceedings of the eleventh conference, May 2628. 1919. 1920. 207p. SOUTH AUSTRALIA. ATTORNEY-GENERAL AND MINISTER IN CONTROL OF TOWN PLANNING. Planning and development of towns and cities in South Australia. Report by the government town planner, C. C. Reade, . . . upon existing conditions and defects and the need for town planning legislation relating thereto in conformity with the provisions of the Town Planning and Development Bill, 1919. 1919. 48p. Civics A community civics; a textbook in loyal citizenship. New York: Scribners. 1920. 385p. BARTLETT, W. H. Handbook of American government. Revised and enlarged, by H. C. Black. New York: Crowell. 1920. 162p. DAWSON, EDGAR. Organized self-government. New York: Henry Holt Co. 1920. S83p. KINSMAN, D. 0. Essentials of Civics, Wisconsin edition. Appleton, Wisconsin: College Press. $ 1919. 319p. LEAGUE OF WOMEN VOTERS (ARKANSAS). Twelve lessons in good citizenship, for use of Arkansas women. [1920.] 22p. MALCOLM, G. A. Philippine civics. New York: Appleton. 1919. 183p. MUNRO, W. B. Government in American cities. 3d edition. New York: Macmillan. 1920. 456p. PETERSON, SAMUEL. Democracy and government. New York: Knopf. 1919. 287p. WOMAN’S CITY CLUB OF CHICAGO. Illinois voters’ handbook. 1920. 11Op. UNITED STATES. BUREAU OF EDUCATION. Civic training through service, by A. W. Dun. June, 1920. 13p. (Teachers’ leaflet no. 8.) UNITED STATES. BUREAU OF EDUCATION. Lessons in civics for the three primary grades of ADAMS, E. W. 790

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BIBLIOGRAPHY 79 1 city schools, by Hannah M. Harris. July, 1990. 64p. (Teachers’ leaflet no. 9.) Civil Service ASSEMBLY OF CIVIL SERVICE COMMISSIONS. Tackling employment problems-veteran preference in nation, state and city. Experts discuss vital needs at Rochester conference. 1919. 189p. Los ANQELES COLXTY. CIVIL SERVICE COMYISSION. commission relating to classification, as amended and in force July 15, 1990. 1920. 47p. MILWAUKEE. CITY SERVICE COMMISSIONERS. Twenty-fourth annual report covering the year 1918, and twenty-fifth annual report covering the year 1919. [1920.] 96p. WISCONSIN. CIVIL SERVICE CO~~~IOX. Seventh annual report from July 1, 1916, to June 30, 1918. Cost of Living ACADEMY OF POLITICAL SCIENCE IN THE CITY OF NEW YO=. Idation and high prices; causes and remedies, edited by H. R. Seager, 1920. 144p. (Proceedings, June, 1920.) AUERICAN ACADEXT OF POLITICAL AND SOCLAL SCIENCE. Prices. 1920. 289~. (Annals, May, Rule XIX of the rules of the . . . 1920.) >hh-ESOTh. DEPARTMENT OF AGRICCLTURE. Investigation of the cost of clothing, by J. H. Hay. May, 1990. lop. (Bulletin no. 6.) MINNESOTA. DEPARTMENT OF AGRICCLTTJRE. Investigation of the trade practices and profits involved in the manufacture and sale of boots and shoes, by J. H. Hay. May, 1920. 15p. (Bulletin no. 7.) PHILAOELPHIA. BUREAU OF MUNICIPAL RESEARCH. The cost of a workingman’s standard of living in Philadelphia at August 1990 prices. (Citizens’ business, no. 433.) September, 1990. llp. UNITED STATES. WAR IKDCSTRIES BOARD. Prices of coal and coke, by C. E. Lesher. 1919. 115p. Education BITREAU OF MUNICIPAL RESEARCH, New York. Report on a survey of the system of supervision of the elementary schools-Harrisburg, Penn. Prepared for the special committee of the board of school directors. Typewritten. June, 1990. 3sp. BURGESS, W. R. Trendsof schoolcosts. New York: Russell Sage Foundation. 1920. 142p. CARNEGIE FOUNDATION FOR THE ADVANCEMENT OF TEACHING. The professional preparation of teachers for American public schools; a study based upon an examination of tax-sup ported normal schools in the state of Missouri, by W. S. Learned, W. C. Bagley, and C. A. McMurry and others. 1920. 475p. (Bulletin no. 14.) GESELL, ARNOLD. Special provisions for exceptional school children. A guidebook on the puhlic school careof mentally deficient and otherwise exceptional pupils, with special reference to conditions and possibilities in Connecticut. February, 1919. 76p. CS-XTED STATES. BUREAU OF EDTJCATION. The university extension movement, by W. S. Bittner. 1920. l24p. (Bulletin 1919. no. 84.) Engineering AKERICLV CONCRETE INSTITUTE. Proceedings of the sixteenth annual convention held at Chicago, Illinois February 16, 17 and 18, 1920. 1920. 356p. BLXGESS ENGISEERPJQ ComPAxr. Burgess blue book: electrical formulas and electrical drawings, problems and calculations, compiled by Yorke Burgess. 747 E. 42nd Street, Chicago. n.d. 108p. F.URFIELD, H. P. and others. Blueprint reading. Chicago: American Technical Society. 1920. 218p. NEW JERSEY. INTERSTATE BRIDGE AND TUNNEL COMMISSION. Report to the senate and general assembly of New Jersey. March 17, 1920. 77p. NEW Yo= STATE. STATE OFFICE OF ENGINEER AND SURVEYOR. hnnual report for the year ended June 30, 1919. 1990. 363p. KEWELL, FREDERICK H. Water resources, present and future uses. A revision of the addresses delivered in the C. S. Lyman lecture series, 1913, before the senior class of the Sheffield Scientific School, Yale university. 1920. Slop. SLOANE, T. O’CONOR. Electricians’ handybook. 5th edition, revised and enlarged. New York: N. W. Henley Co. l9YO. 823p. Census of electrical industries: 1917. Central electric light and poa-er stations, with summary of the electrical industries. 1920. 184p. UhTTED STATES. BUREAG OF THE CENCIUS.

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793 NATIONAL MUNICIPAL REVIEW [December VIGNEAU, E. R. How to understand the reading of blueprint drawings. The fundamental principles simply explained. Detroit, Mich. Educational institute. 1919. 169p. Finance CLEVELAND AND BUCK. The budget and responsible government. New York: Macmillan. 1920. 406p. GULICK, L. H. Evolution of the budget in Massachusetts; submitted in partial fallment of the requirements for the degree of Doctor of Philosophy in the faculty of political science. New York: Columbia university. 1920. 241p. RHODE ISLAND. STATE LIBRARY. Legislative reference bureau. The budget system, by H. W. Lord. Typewritten. Jan. 1920. 27p. Finance, Municipal BOSTON, Mass. FINANCE COMMISSION. Reports and communications, vol. XV. 1920. 312p. KANSAS CITY, Mo. COMPTROLLER. Annual report for the fiscal year 1919, beginning April %2, 1919, and ending April 19, 1920. 1920. 157p. LOS ANGELES, CAL. Report of the auditor. 1919. 74p. MUNICIPAL RESEARCH BUREAU OF CLEVELAND. Report upon the outstanding debt and bonding policy of the city of Cleveland. June, 1920. 43p. NEW YORK CITY. BOARD OF EDUCATION. Report of the superintendent of schools on the budget estimate for 1921. September, 1920. 114p. NEWARK DEPARTMENT OF REVENUE AND FINANCE. Annual report of the director for the year 1919. 1920. 260p. TORONTO, CANADA. COMMISSIONER OF FINANCE. Annual financial report. 1919. 60p. TORONTO, CANADA. BUREAU OF MUNICIPAL RESEARCH. City budget facts. 1920. 16p. UNITED STATES. LIBRARY OF CONGRESS. Division of bibliography. List of references on municipal finance and taxation. Typewritten. June, 1920. 25p. Foods and Markets DOWD, M. T. and J. D. JAMESON. Food: its composition and preparation. New York: Wiley. 1918. 173p. GREAT BRITAIN. FOOD CONTROLLER. Milk control. [1919.] 8p. JENNINGS, I. G. Study of the New York city milk problem. New York: National Civic Federation. 1919. NATIONAL ASSOCUTION OF STATE MARKETING OFFICIALS. Summary of proceedings at organization meeting, Feb. 5, 6, 7, 1920. Constitution and by-laws, election of officers, reports of standing committees and list of all members in attendance at sessions. 1920. Typewritten. 2lp. PEARL, RAYMOND. The nation’s food: a statistical study of a physiological and social problem. Philadelphia: Saunders. 1920. 274p. RHODE ISLAND. STATE LIBRARY. Legislative reference bureau. 1916-1919. Legislation relative to milk (in the several states), a digest, by Donald H. Curtis. April, 1920. Typewritten. 9P. UNITED STATES. DEPARTMENT OF AOFLICUOLTURE. City milk plants: construction and arrangement, by Ernest Kelly and c. E. Clement. July, 1920. 35p. (Bulletin no. 849.) UNITED STATES. DEPARTMENT OF AGRICULTURE. Co-operative marketing, by 0. B. Jesness. September, 1920. 27p. (Farmers’ bulletin no. 1144.) UNITED STATES. LIBRARY OF CONGRESS. Division of bibliography. List of references on cc-operative stores. Typewritten. May, 1920. l2p. WING, H. H. Milk and its products. New York: Macmillan. 1920. 433p. Government, Municipal CLEVELAND. Ordinances. Index to miscellaneous ordinances, general ordinances, special ordinances, resolutions. (Cleveland City record. Index, 1919. p. 318-343.) CITY MANAGERS’ ASSOCIATION. Progress of manager plan in one hundred and eighty-five cities. (In its year-book [proceedings], 1920. p. 5-92.) CITY MANAGERS’ ASSOCIATION. Sixth yearbook [proceedings], 1920. 183~. DETROIT BUREAU OF GOVERNMENTAL RESEARCH, Inc. Report on conditions of personal service, with a tentative draft of a civil service tenure ordinance, and a classification of personal service, with specifications and standard salaries, October, 1920. Typewritten. 91p. DETROIT BUREAU OF GOVERNMENTAL RESEARCH, Inc. Report on the organization and administration of the probation department of the Recorder’s probation department of the

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BIBLIOGRAPHY 793 Recorder’s court. Typewritten. August, 1920. 29p. EAST ST. LOUIS, ILLINOIS. WAR CIVICS COMICITTEE. Second annual report, October 1, 1919-September 30, 1920. The spirit of East St. Louis, Illinois, by A. W. Coffin. 33p. LONDON, ONTARIO. CITY CLERK. Municipal year-book, 1920. 1920. 148p. MEMPHIS. Ordinances. Memphis traffic rules and regulations. effective March 24, 1920. 1920. 1P. MERCHANTS AND MANUFACTURERS’ ASSOCIATION OF BALTIMORE. Report of committee on municipal problems. June, 1920. 63p. NEW YORX CITY. COMPTROLIJCR. Memorandum in support of Senate bill, Int. no. 994, pt. nos. 1080, 1543, introduced by Senator Bernard Downing; assembly bill, Int. no. 1289, pt. nos. 1452, 1860, introduced by assemblyman W. T. Simpson, entitled, “An Act to amend the Greater New York charter, respecting the receipt, deposit and disbursement of public moneys, and abolishing the o5ce of chamberlain,” by Charles L. Craig, April, 1920. 6p. NOVA SCOTIA. Proceedings of the Union of Nova Scotia Municipalities. Fourteenth annual convention, held at Yarmouth, N. S., August, 1919. Halifax: Weeks Printing Co. Ltd. 1920. 172p. PONTIAC, MICHIGAN. Proposed new charter. June, 1920. 55p. Tomno. Ordinances. New bill-board ordinance. An ordinance, no. 1839, amending sections 136 to 141, both inclusive, of the Toledo Code of 1919, and adding supplemental sections to be known as sections 141-1. 141-2, and 141-3 relating to and regulating bill-boards, signboards, roof-signs and similar structures, and repealing said original sections 136 to 141, both inclusive. Passed May 17, 1920. 1920. 8p. UNITED STATES. LIBRARY OF CONGRESS. Division of bibliography. List of references on commission government for cities. (Supplementary to the printed list, 1913.) Typewritten. February, 1920. 13p. UNITED STATES. LIBRARY OF CONGRESS. Division of bibliography. List of references on mayoralty government of cities. Typewritten. May, 19fzO. 6p. WESTERVILLE, OHIO. CITY MANAGER. Fourth annual report to the village council. 1919. alp. XENIA, OHIO. CITY MANAGER. Report of the city of Xenia, Ohio, for years 1918 and 1919. ment. 56p. Government, State CANADA. BUREAU OF STATISTICS. First annual report of the dominion statistician for the fiscal year ended March 31, 1919. (Sessional paper no. 10f.) 1919. 51p. NEBRASKA. Constitutional convention, 191920, with explanatory statements and sample ballot. To be submitted to the people at a special election to be held September 21,1950. 1920. 52p. NEBRASKA. Constitutions of 1866, 1871 and 1875, and proposed amendments submitted to the people September 21, 1920, with critical notes and comparisons with constitutions of other states.-A joint publication of Nebraska State Historical Society. (Bulletin no. 13.) Nebraska history and political science series, September, 19!20.-Lincoln: American Printing Co. 207p. NEW HAMPSHIRE. SECRETARY OF STATE. Manual of the constitutional convention of 1918; convened at the Shte House at Concord, June 5,1918. [1918.] 209p. TEXAS. UNIVERSITY. BUREAU OF GOVERNMENT RESEARCH. O5cers, boards, and commissions of Texas. By Frank Mann Stewart. Government research series no. 18. September, 1918. 63p. WALDMAN, LOUIS. Albany: the crisis in government. The history of the suspension, trial and expulsion from the New York state legislature, in 1920, of the five Socialist assemblymen by their political opponents. 1920. 23.3~. Health and Sanitation AMERICAN RED CROSS IN ITALY. COMMISSION FOR TUBERCULOSIS. Supplementary reports; school hygiene-an illustration of a method of work in a foreign country, by E. A. Peterson; child labor in Italy, by R. M. Underhill; housing in Italy, by Mildred Chadsey. [1919.1 147p. CAMERON, H. C. The nervous child. Published by the Joint Committee of Henry Frowde. Hodder & Stoughton. 1919. 20%~. CLEVELAND. Ordinances. Ordinance no. 46186-a; an ordinance establishing a sanitary code for the Division of Health of the city of Cleveland. Passed July 12, 1920. Effective August 22, 1920. (Cleveland. City Record, GREAT BRITAIN. MINISTRY OF HEALTH. InCommission manager form of governJuly 28, 1920. p. 6-38.)

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794 NATIONAL MUNICIPAL REVIEW [December terim report of the Committee on Smoke and Noxious Vapours Abatement. 1920. 8p. INTERNATIONAL CONFERENCE OF WOMEN PHYSICIANS. Proceedings, 1919. 6 volumes. Woman’s Press. 1920. NEW ORLEANS. BOARD OF HEALTH, AND METROPOLITAN LIFE INSURANCE COMPANY OF NEW YORK. Report of the health and sanitary survey of the city of New Orleans. 1918-1919. 163p. SPOKANE. Ordinances. Ordinance no. C2579. An ordinance relating to public health; providing for the prevention and suppression of disease in the city of Spokane, and for inspection, regulation and licensing of restaurants, cafb, lunch counters, lunch stands, and other eating places in said city; . I . Passed August 9, 1920. (Spokane. Official Gazette, August 18, 1920. p. 5410-5411.) THOMSON, H. H. Tuherculosis and public health. Longmans. 1919. 104p. UNITED STATES. CHILDREN’S BUREAU. Standards of normal development and physical fitness for working children. Preliminary report of a committee appointed by the United States Children’s Bureau, December, 1919, to formulate standards of normal development and sound health, for the use of physicians in examining children entering employment and children at work. July, 1920. Typewritten. 16p. WALLACE AND TIERMAN COMPANY, Inc. The sanitation of swimming-pools. 349 Broadway. 1920. 3lp. (Technical publication no 21.) WISCONSIN. BOARD OF HEALTH. Wisconsin public comfort station code, and rest-room suggestions. 1920. Sap. Housing Problem CITY CLUB OF NEW YORK. The housing crisis : memorandum prepared for the special session of the New York legislature. September, 1920. 13p. GREAT BRITAIN. MINISTRY OF HEALTH. The housing problem in Germany. 1919. 89p. NEW YORE STATE. LEGISLATURE. Housing bills passed at the special legislative session, September, 1920. Albany: Lyon Co. 1920. 33p. PENNSYLVANIA. STATE CHAMBER OF COMMERCE. Report of the Housing Code Committee. Proposed housing code for the state of Pennsylvania. September 28, 1920. 19p. REAL ESTATE BOARD OF NEW YORE. Recommendations on legislation to relieve the housing shortage, submitted to the Governor, the Joint Legislative Housing Committee and the legislature, for the special session of September 20, 1920. 19520. llp. REAL ESTATE OWNERS’ ASSOCIATION. New rent laws which became effective April 1, 1920. 1920. lop. ST. LOUIS. CITY PLAN COMMISSION. The housing problem in St. Louis. 1920. 51p. WISCONSIN. UNIVERSITY. Library school. Regulation of rents; a bibliography by Mabel Cross. June, 1920. Typewritten. 9p. BUREAU OF MUNICIPAL RESEARCH, New York. Shall Wilmington stop growing? Summary of report on housing situation in Wilmington. November, 1919. lap. Juvenile Courts BRECEINRIDGE, S. P. and JETAR, H. R. A summary of juvenile court legislation in the United States. (United States Children’s Bureau. Legal series no. 5.) 1920. BTJREAU OF MUNICIPAL RESEARCH, Toronto. Interim report on the Juvenile Court of Toronto. The Detention Home. September, l9!20. 14p. Labor AMERICAN ACADEMY OF POLITICAL AND SoCIAL SCIENCE. Industrial stability. 1920. 177p. (Annals, July, 1920.) ASSOCIATED INDUSTRIES OF SEATTLE. The Industrial Court of Kansas. [1920.] 38p. CALIFORNIA. BUREAU OF LABOR STATISTICS. Labor laws of California. 1919. 261p. HOWARD, EARL D. The Hart, Schaffner and Marx labor agreement. Industrial law in the clothing industry. 1920. 97p. HUSSLEIN, JOSEPH. Democratic industry. Kennedy. 1920. 362p. KANSAS. COURT OF INDUSTRIAL RELATIONS. Rules, practice and procedure. n.d. 8p. NEW YORK STATE. INDUSTRIAL COMMISSION. Court decisions on workmen’s compensation law, July, 1919-June, 1920, subjects other than constitutionality and coverage. July, 1920. 113p. (Bureau of Statistics and Information. Special bulletin no. 98. -. Report submitted relating to the telephone industry in New York state to His Excellency, the Governor of the State of New York. Prepared by the Bureau of Women in Industry. July, 1920. 95p. (Special bulletin no. 100.) . Statutes. New York labor laws en

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19201 BIBLIOGRAPHY 795 acted in 1920. June, 1920. 93p. (Bureau of Statistics and Information. Special bulletin no. 99.) -c_ . Workmen’s Compensation Law, with amendments, additions and annotations to August 1,1920. 1920. 114p. (Issued under the direction of the Industrial Commission. Prepared by the Bureau of Statistics and Information.) UNITED STATES. CHILDREN’S BUREAU. Industrial instability of child workers; a study of employment-certificate records in Connecticut, by Robert M. Woodbury. 1920. 86p. (Industrial series no. 5. Bureau publication no. 74.) Laws CALIFORNIA COMNONWEALTH CLUB. The Alien Land Law. 1920. 36p. (Transactions, August, 1920.) MASSACHUSETTS. DEPARTMENT OF PUBLIC UTILITIES. New legislation of especial interest to public utilities, including municipalities owning lighting plants, 1920. 1920. 48p. NEW Yo% STATE. Statutes. The Highway Law; laws of 1909, chapter 30, constituting chapter 25 of the Consolidated Laws as amended, acts of legislature 1910-1911-1912-1913-1914-19151916-1917-1918 and 1919, with annotations, and the General Highway Traffic Law, laws of 1917, chapter 655, chapter 70 of the Consolidated Laws 1919. 347p. PUBLIC AFFAIRS INFORMATION SERVICE. Index to state legislation, 1920. September 25, 1920. 16p. (Special issue of Bulletin.) WISCONSIN. INDUSTRIAL COMMISSION. Building code. Revised, 1920. 1920. 1.33~. Libraries ILLINOIS LIBRARY EXTENSION COMMISSION. Statistics of the public libraries SPRINGFIELD. of Illinois. 1919. 31p. Pensions ILLINOIS. TEACHERS’ PENSION AND RETIREMENT FUND. Board of Trustees. Illinois State Teachers’ Pension and Retirement Fund Law, handbook. Compiled and arranged by R. 0. Clarida, secretary. Revised edition. January, 1920. 38p. MILWAUKEE. PENSION LAWS COMMISSION. Tentative recommendations. June 2, 1920. 67p. Police KANSAS. UNIVERSITY. Municipal Reference Bureau. A report on police departments in seventeen Kansas cities of the first and second clsss and in twenty-five out-of-state cities. March, 1920. Typewritten. 15p. TORONTO BUREAU OF MUNICIPAL RESEARCH. Memorandum . . . women police, women magistrates, etc. August, 1920. Typewritten. 5p. Ports COHEN, JULIUS HENRY. The New York harbor problem and its legal aspects. Reprinted from Cornell Law Quarterly, May, 1920. Pp. 373-408. LONDON. PORT OF LONDON AUTHORITY. Eleventh annual report for the year ended March 31, 1920. 2Op. UNITED STATES. SHIPPING BOARD. Port Facilities Commission. English port facilities, by F. T. Chambers. 1919. Maps. 387p. Salaries CIVIL SERVICE ASSOCIATION OF THE STATE OB NEW YORK. Preliminary report of the Committee on Salaries of Capitol City Council 98. October, 1920. 16p. LABOR BUREAU, Inc. Fire Department, New York City, comparative salary increases 18981990. 1920. 1 sheet. Police Department, New York City, comparative salary increases 1898-19, compiled for the Patrolmen’s Benevolent Association. 1920. 1 sheet. Social Welfare BALTIMORE. DEP-ARTMENT OF CIIARITIES AND CORRECTION. Twentieth annual report, subdepartment of Supervisors of City Charities, for fiscal year ending December 31, 1919. BROOKLYN BUREAU OF CHARITIES. Fortyfirst annual report, 1919-20: mending broken lives. 1920. 28p. CITIZEN’S COMMITTEE ON CITY PLAN OF PITTSBURGH. Pittsburgh playgrounds, study and recommendations. 1920. CLEVELAND FOUNDATION. Cleveland recreation survey: commercial recreation. 1920. 155p. Public provision for recreation, by R. Haynes and S. P. Davies. 1920. 198p. The sphere of private agencies. 1920. 178p. HARTFORD, CONN. JUVENILE COMMISSION. Eleventh annual report to the Mayor and Court

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796 NATIONAL MUNICIPAL REVIEW [December of Common Council. Press of T. B. Beach, Jr., Hartford. 1920. 25p. INDIANA, UNIVERSITY. The community center; list of lantern slides, with notes on the community schoolhouse. April, 1920. 30p. (Bulletin no. 8.) LOS ANGELES. SOCIAL SERVICE COMMISSION. Social service directory, 19'20. 1920. 63p. NEW Yo= STATE. PROBATION CO~SSION. State supervision of probation. 1920. I&p. . Twelfth annual report for the year 1918. 1919. 576p. (Legislative document no. 116.) RUSSELL SAGE FOUNDATION LIBRARY. Juvenile delinquency, by F. W. Jenkins. August, 1920. 4p. (Bulletin no. 42.) S~YBERT INSTITUTION (PHILADELPHIA). BuREAD OF SOCIAL RESEARCH. The functional relations of 15 case working agencies, as shown by a study of 421 individual families and the report of the Philadelphia Intake Committee, by H. C. Wauerstein. 1919. 176p. TOLEDO. COMMISSION OF PUBLICITY AND EFFICIENCY. Report of a survey of Toledo's Welfare Farm. Conducted by Professor Charles Russell, Toledo University. 1920. 61p. UNION OF SOUTH AFRICA. Office of Census and Statistics. Social statistics; statistics of retail and wholesale prices, rents and cost of living (1895 to 1919), with a statement of the methods of compilation. 1919. 120~. WOOD, ARTHUR E. Some unsolved social problems of a university town. 1920. 77p. Taxation NORFOLK, VA. Ordinances. An ordinance imposing taxes on the shares of stock of the capital of banks, banking associations, trust and security companies, and licenses for the payment of interest on the city debt, and to meet the general appropriations, for the fiscal year of 1920. Licenses from May 1,1920, to and including April 30, 1921. 1920. 46p. The coming land policy. The antithesis of the single tas policy. Supplement to untaxing the consumer. 1920. GGp. Transportation AERIAL YEAR-BOOK and who's who in the air, 19'20. London, Cross-Atlantic House, 184 Fleet Street. 19%0. ALL-AMERICAN CAHAL BOARD. Report of the All-American Canal Board, Elwood Mead, W. W. Schlecht, C. E. Grunsky, on a canal -THUM, WILLIAM. located entirely within the United States, from the Colorado river at Laguna dam into the Imperial valley, California, July 22, 1919, together with the report of the engineer in charge of surveys and examinations, Porter J. Preston, June 17, 1919. 1920. 98p. 5 plates. AMERICAN ELECTRIC RAILWAY ASSOCIATION. A compilation of cities in which fares were increased, July I, 1920. This shows city, population, name of operating company, cash fare, ticket rates, date of change and number of fare changes granted. 1920. Typewritten. 17p. Changes and additions to fare compilation of July 1, 1920. August 6, 1920. Typewritten. 2p. Changes and additions to fare compilation of July 1,1920. September 1,1920. Typewritten. 5p. . Methods of interurban companies in increasing fares, July 31, 1920. 1920. Typewritten. 30p. Mileage of electric railways that has been dismantled and sold as junk. September, 1990. Typewritten. 3p. Summary of opinions of railway executives on effect of increased fares on their properties (based on replies to letter of May 27, 1920). Interurban companies. June, 1920. Typewritten. 3p. BOULUOIS, H. P. Modern roads. Arnold. 1919. 302p. BUREAU OF RAILWAY Ecolvonms, Washington, D. C. Railway earnings in 1919; railways having annual operating revenues above $1,000,000. September, 1920. 18p. (Consecutive no. 150.) CLARK, H. C. Service-at-cost plans. An identical analysis of statutes, ordinances, agreements and commission orders in effect., or proposed, together with a discussion of the essentials of local transportation franchises. American Electric Railway Association. 1990. 315p. DETROIT BUREAU OF GOVERNMENTAL RESEARCH, Inc. Memorandum to Joseph Goodwin, general manager for the Street Railway Commission re type of street railway construction used in St. Joseph, Missouri, and Cleveland, Ohio. September, 1920. 7p. 3 blue prints. EYTINGE, CAPTAIN BRUCE. The landing field guide and pilot's log-book. Published by author. 1990. 64p. FORD, BACON & DAVIS. The New Jersey valuation law. A few editorial opinions of chapter . . . ,

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19201 BIBLIOGRAPHY 797 351, Lqws of 1920, state of New Jersey. 115 Broadway, New York, October, 1920. . The serviceat-cost plan. 115 Broadway, New York. October, 1920. 5p. NEW YORE STATE. SUPERINTENDENT OF PUBLIC WORKS. Annual report on the canals of the state for the year ended June 30, 1919, and on the trade and tonnage of the canals for the year 1919. 1920. 492p. (Legislative document no. 109.) . Transit Construction Commissioner. Map showing routes and stations of the dual system. November 21, 1919. Size: 14a x 31i in. PAGE, V. W. The A-B-C of aviation. N. W. Henley Co. 1919. 274 p., charts, diagrams. WILCOX, DELOS F. Local transportation issues in New Jersey. Associated Municipalities in the Public Service Railway Rate Proceedings. Mimeographed. 83p. Waste Disposal hmcm PWLIC HEALTH ASSOCIATION. Standard methods for the examination of water sewage. 1920. 115p. TALBOT, F. A. Millions from waste. Lippincott. 1920. 308p. Miscellaneous AMERICAN SOCIETY FOR MUNICIPAL IMPROVEMENTS. Advance papers to be presented at the twenty-sixth convention, October 12-15, 1920. 1920. 48p. CONYNGTON. THOMAS. Business law. A working manual of every-day law. 2 ed. 1920. 2v. HAYTHE AND CO~ANY. Standard legal directory, 1920. A selected list of prominent realty, insurance, title, mortgage, patent, admiralty, corporation and probate lawyers and lawlQp. yers engaged in the general practice of the law; foreign correspondents; consular agents; professional cards. 1920. 223p.122~. HYDE, E. BELCBER. Atlas of the borough of Brooklyn. Vol. 3. 1920. LEWIS, A. F., AND COMPANY. National trades blue book, 1920. 1920. 287p. MOTION PICTTJRE NEWS, INC. Motion picture studio directory and trade annual, 1920. 6 ed. 1920. 534p. NATIONAL TRADE EXTENSION BUREAU. Classified directory of plumbing and heating contrao tors of the United States. 1919 ed. 231p. NEW YORK STATE. AVIATION COMMISSION. Report of the . . . Commission to His Excellency Alfred E. Smith, Governor of the State of New York. 1920. 18p. (Legislative document no. 103.) PORTSMOUTH CHAMBER OF COMMERCE. Report of Telephone Committee. n.d. 28p. PWLIC OWNERSHIP LEAGUE OF AMERICA. Proceedings Public Ownership Conference, held in Chicago, November 15, 16, 17, 1919. 29Op. (Bulletin no. 14.) REAL ESTATE directory of Manhattan, 19201921. ST. Loms PUBLIC LIBRARY. Municipal Reference Library. Motion pictures. Laws, ordinances and regulations of censorship, minors and other related subjects, by Lucius H. Cannon, July, 1920. 162p. TEXAS. UNIVERSITY. Public service rates in Texas cities, compiled by Frank M. Stuart. 1919. 191p. (Government research series no. 19.) UNITED STATES. BUREAU OF MINES. Motor gasoline survey, by N. A. C. Smith. February, 1920. Typewritten. 8p. -. July, 1920. Typewritten. 8p.

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Municipal Operation on Staten Island, New York.-Toward the close of last year the two surface car companies in Staten Island, one of the boroughs of New York city, threatened to abandon the service unless an increase in fare was immediately granted. One of them, the Staten Island Midland Railroad Company, after posting a warning notice to the public that they were compelled to take the action they did because of their inability to continue at the fivecent rate, did shut down early in January, despite a restraining court order to the contrary secured by the city. A receiver was appointed, who, on being urged to run the cars, claimed that he found practically no equipment that would permit him to do so. It seemed that the cars belonged to the Richmond Light & Railroad Company, from whom they were leased and who furnished the power. The city put on busses temporarily and took action looking forward to the revocation of some of the franchises of the company. Final action on this matter was prevented because the property is in the hands of the federal court. In the meantime, negotiations were opened with the receiver to enable the city to operate the lines of the company, and an agreement was drawn up with the court’s approval, embodying the terms on which this may be done. This agreement is without prejudice to the rights of the city or the company when the courts finally decide whether or not the franchises have been forfeited. It provides for operation on the same schedule as was in force prior to discontinuance of the service at a five-cent fare. From the receipts the city is to pay the expenses of operation. The balance, if any, is to be divided equally between the city and the receiver of the company, in lieu of rental. However, no money is to be paid directly to the receiver. It is to be paid into the court until a final determination has been made as to the right of the city to the property because of the franchise forfeitures. Besides, the city claims that the company owes it $100,000 in back taxes. There is no renewal clause, but there is no doubt of a continuation of the arrangement or of a new arNOTES AND EVENTS 798 rangement if operation is successful. As it is, the receiver is given the right to terminate the agreement on thirty days’ notice, because the property is under the jurisdiction of the federal court and the position is taken that the court has no right to relinquish such jurisdiction. In addition to this agreement another is made with the Richmond Company for power and the use of certain tracks approaching the ferry terminals, which tracks belong to that company. Prior to commencing operation, the city is putting the tracks and poles into shape. This is being done under the terms of the agreement by which the city has a prior lien on all improvements made by it to the property, if done with the approval of the court. An appropriation of $300,000 was made some months ago for improvements, including the purchase of cars. About thirty of the most improved type of oneman cars have been ordered and will be ready for use beginning December fist, when the agreement will come into force. * Milwaukee Moves Toward City-County Planning.-Although the built-up territory adjoining Milwaukee is opposed to annexation to the city, it is obvious that no adequate city planning can be done without consideration to the metropolitan territory which some day will be a part of the city. Legislation is therefore being prepared which will enable the city and county planning boards to act jointly on planning matters affecting both territories. The city of Milwaukee occupies a large part of the county of Milwaukee, and if the adjoining suburbs are considered, the greater part of the county is occupied by the population centering on the city of Milwaukee. Land adjoining the city is usually quite fully developed before it is annexed to the city. This is the cause of many of the di5culties encountered by the city. During the consideration of the city zoning ordinance by the board of public land commissioners, it soon .became apparent that any planning in the city itself would be of little avail as far as the surrounding territory is concerned, T. DAVID ZUCEERMAN.