Public Utilities

However, the evils of

a system which left the supply of basic economic wants to private industry insufficiently regulated by government became too flagrant to be overlooked. Beginning about 1840 the revolt against laissez faire doctrines caused an enlargement of the scope of governmental action. The older public utility services were continued for the most part as public enter prises, while the newer services were supplied by private initiative under some form of public supervision and assistance. Thus emerged the modern notion of a public utility, distinct from strictly governmental services and strictly private business.

Need for New Utilities.

The beginnings of the modern postal system date back to the 15th century. In the 18th century England was covered with improved roads built by public author ity or by private turnpike companies. The first canal in a new era of canal building was completed in 1761. The first steam railroad was built in 1825 and the first regular steamboat began operation in 1812. The steam railway has developed into the backbone of land transportation, yet canals and inland-waterways continue to serve as important arteries of commerce. With the coming of the automobile, in the United States as elsewhere, highway systems are being reorganized upon an unprecedented scale. The motor bus and the motor-truck are making use of this development and are rapidly cutting into the short-distance traffic of steam rail roads. Since 185o, systems of rapid, world-wide communication have been perfected. The commercial electric telegraph and the telephone are now of tremendous importance. (See TELEPHONE; TELEGRAPH.) After 190o radio-telegraphy and since 1907 radio telephony have increased the varieties of means of communication. The ancient art of irrigation is undergoing a rebirth.

In the field of municipal public utilities local transportation was supplied, at first, by fleets of omnibuses in the '20S of the 19th century. The horse-car came in the '3os. Artificial gas for illumi nation was introduced commercially in London in 1812 and was widely in use for lighting by 1840. A new development in water supply systems appears to have been introduced by the munici pality of London in 1583, followed by Plymouth in 1585 and by Oxford in 161o. Boston in 1652 installed the first modern central water-supply system of the gravity type in America. Central water-supply systems became general in the large cities by 182o. Growing out of experiences in the cholera epidemic, British sani tary authorities put forward the trilogy of public hygiene street paving, canalization and water-supply. As a final achieve ment in the development of municipal sociology came a new city planning movement, begun in Paris about 185o. (See TowN PLAN

NING and related articles.) New public utilities centring in cities have developed out of the industrial applications of electric power. In 1882 the first central station for electric lighting began operation in the United States. By 1885, electric power was applied to street-railways. The first hydro-electric plant began operation in 1882, the precursor of a new movement in power production.

In this historical survey it is important to note that public utilities were not definitely segregated from public functions until the laissez faire philosophy of the 18th century restricted the scope of governmental activity and created institutions and processes whereby the supplying of these changing public needs could be left to private initiative. Industrial interdependence now prevails. Thus public utilities, although privately owned, must be subjected to governmental regulation. The term socialization has been chosen to describe this latest phase of utility development because it implies that government may actively promote these enterprises through public ownership or arrive at the same result by creating private agencies and controlling them through well conceived policies of regulation.

Developments in the engineering arts bring changes in economic organization. For instance, lighting of the home has been trans formed first from a self-sufficient household industry (as the making of candles) to a commercial competitive industry (the supply of candles, lamps, whale-oil and petroleum), and then to monopolistic industry (as in electric lighting and the various forms of gas illumination), where central sources of supply satisfy all demands. Perhaps the most significant economic conclusion founded upon these changes is that the social value of public utility services is increased and the economic cost of rendering them is reduced by a consolidation of enterprises. The individual user of water in our urban centres no longer depends for his supply upon his own well, nor does he buy from one of several competing sources. He resorts to a single common source of supply along with other users. This has been found to be more convenient, economical and, indeed, the only practical solution. But this process of integration of supply has been a long process. In some public service industries it is not even yet completely realized. There are still competing gas, electric, transportation and tele phone utilities. This tendency toward monopoly, whether the result of a competitive struggle or brought about by legislation, is a fundamental characteristic of public utility business.