The plan of selling the franchise (b) is difficult to apply because of the limited number of bidders and because of the unpredictable character of the returns. There remain the policies of administrative rate-fixing (d) and of public owner ship to secure the profits of monopoly to the public, either directly or in a diffused manner. In the recent period of rising prices the administrative state commissions have, like the Interstate Commerce Commission, performed very valu able services. But, on the whole, the general trend of muni cipal policy is everywhere toward public ownership of this type of local public-service industries.
§ 10. State ownership of various kinds. The movement toward public ownership by the American states has been much less marked than that by the municipalities. Many of the states have retired from some where once they were engaged in industry. Students of American history know that between the years 1830 and 1840 some states en gaged largely, even wildly, in canal-building, railroad con struction, banking, and in other enterprises. The undertak ing of these industries was determined often by political and by selfish local interests, and their operation often was waste ful. A few enterprises succeeded for a time, the most notable of these being the Erie Canal in New York, though this too be came almost worthless as a result of railroad competition. The unsuccessful ones remained in the hands of the state or were sold to private companies, as in the case of the Pennsylvania Railroad. These reckless state enterprises were bitter lessons in public ownership, and continued for three quarters of a cen tury to have such an effect on public opinion that few pro posals for public ownership could have a fair hearing in America. But railroads and canals are publicly owned, and
more or less successfully operated, by many foreign states, as in Prussia and other German states, in Switzerland, and in the new states of Australia, and this policy is rapidly extend ing to other countries and to varied industries.
There has been recently a greatly increased interest in for estry shown by the American states. This is especially likely to be a state enterprise wherever the forest tracts are entirely within the limits of the state, as in the case in New York with 2,000,000 acres and Pennsylvania with 1,000,000 acres of state forests. At present at least thirty-three states have forestry departments. Most of the forests in Germany are either communal or state-owned. The schools, a. great in dustry for turning out a product of public utility, are largely conducted by the American state and by local units rather than by the nation or by private enterprise. The state en courages researches in the arts and sciences, and gives tech nical training. A variety of minor enterprises have been undertaken by states to supply salt, phosphate, banking facili ties, even some manufactures. One after another the states are adopting the "state use" system of labor in the prisons and public institutions, engaging in agriculture and manu facturing on a large scale, and using the products, amount ing to millions of dollars annually, almost entirely for public purposes.
§ 11. National ownership. The national governments ev erywhere appear to be enlarging the field of their ownership. This policy has its roots far in the past. Some industries grow out of the political needs of government. Established as a means of communication with military outposts, the post be came a convenient means of communication for merchants and other citizens and grew into a great economic institution. In most countries the telegraph is publicly owned and has been annexed to the post, to which it is very closely related in pur pose. National ownership of railroads is the rule, and our policy of private ownership the great exception in the world to-day. Many persons, some in railroad circles, have long believed that national ownership of railroads is sure to de velop out of our present policy of regulation; and this opinion is gaining ground, since the passage of the Transpor tation Act of 1920, even with many that deplore the prospect.