The Online Library of Liberty

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• Preface
• Translator's Note
• Where and Why Public Ownership Has Failed
• Book I: Public and Private Trading Operations
• Chapter I: Two Precepts
• Chapter II: The Three Mainsprings of Human Action
• Chapter III: Determining Motives of Private As Against Public Enterprises
• Chapter IV: Government and Municipal Trading Operations
• Book II: Financial Results of Government and Municipal Ownership
• Chapter I: Bookkeeping In State and Municipal Trading Enterprises
• Chapter II: The Belgian State Railroads
• Chapter III: Prussian Railroads
• Chapter IV: State Railways of Austria and Hungary
• Chapter V: Italian Railways
• Chapter VII: Railways of New Zealand
• Chapter VIII: Government Railroads In France
• Chapter IX: Public Vs. Private Operation
• Chapter X: The Holy Cities of Municipal Operation
• Chapter XI: Operation of Gas and Electricity In the United Kingdom
• Chapter XII: Tramways In Great Britain
• Chapter XIII: Housing of the Working Classes and Public Ownership In Great Britain
• Chapter XIV: Housing of the Working Classes On the Continent
• Chapter XV: Government Control of Food Supplies
• Chapter XVI: Victims of Government Ownership
• Chapter XVII: Charges, Debts and Credit
• Chapter XVIII: Fictitious Profits
• Chapter XIX: Fiscal Monopolies
• Chapter XX: The Alcohol Monopoly In Switzerland and Russia
• Chapter XXI: Financial Disorder
• Chapter XXII: The Purchase Price
• Chapter XXIII: Delusions of Profit and the Life Insurance Monopoly In Italy
• Chapter XXIV: The Fiscal Mines of the Saar District
• Chapter XXV: Public Versus Private Enterprise
• Book III: Administrative Results
• Chapter I: Administrative Results
• Chapter II: The Safety of Travelers Upon State and Private Railway Lines
• Chapter III: Disorders, Delays and Errors
• Chapter IV: Official Conservatism
• Chapter V: Labor
• Chapter VI: The Consumer
• Chapter VII: Programs of Organization and Regulation
• Book IV: Political and Social Consequences of Public Operation
• Chapter I: Socialist Programs and the Facts
• Chapter II: Bluff
• Chapter III: Results of Experience
• Chapter IV: The State a Dishonest Man
• Chapter V: Corruption
• Chapter VI: Nationalization of Public Utilities and the Foundation of Great Fortunes
• Chapter VII: Disintegrating Character of Public Operation
• Appendix %u201ca%u201d: Alcoholism In Russia
• Appendix %u201cb%u201d: the Financial Year In Australia
• Appendix %u201cc%u201d: the Shortcomings of the Telephone In England

CHAPTER XV

GOVERNMENT CONTROL OF FOOD SUPPLIES

To a questionnaire sent out to Swiss towns by Edgar Milhaud concerning markets operated by them1 74 towns responded; 33 returned purely negative answers; 41 have made some headway against the high cost of living; Glarus has leased a fish market to a merchant who has been authorized to raise his price from 10 to 20 centimes (2 cents to 4 cents) a pound above cost. Oerlikon had given to certain families the right to reductions of from 10 to 20 per cent. from all retail dealers, at the expense of the commune. In 1908 Romanshorn opened a public fish market: “No gains and few losses.” Saint-Imier, Herisau, Rorschach, Schaffhausen have renounced similar attempts. Thun has leased a fish market.

At Saint Gall the sale of fish yields several hundreds of francs profit to the city, and has lowered the price of fish in the private market. The market is patronized, however, only by wealthy families or those in easy circumstances.

Zurich, three years ago, entrusted the sale of sea fish to a coöperative society, the Zurich Lebensmittel-verein; the fish were sold at cost, plus a percentage to cover expenses. The administrative council of the society declared that “the attempts made to accustom the Swiss population to the use of fish food must be regarded as having failed.” Zurich then organized cooking classes. The results of this latter experiment are not yet known.

Zug has established a municipal slaughter house. Freiburg bought and sold, in the autumn of 1910 and the spring of 1911, 193,000 kilos (474,600 lbs.) of potatoes, at a loss of 2,833 francs ($538). Lucerne, in 1911, sold 13 carloads of potatoes, 4 carloads of apples, and 2 carloads of carrots, for cash. The shipping costs were met by the town. In addition 43,750 kilos (96,250 lbs.) of coke were sold by the city. The undertaking ultimately resulted in a loss of 2,842 francs. In any event, the authorities of Lucerne can hardly be accused of supplying over-substantial nourishment to their fellow-citizens!

The town of Saint Gall caused vegetables to be sold by a coöperative society at cost price f.o.b. Saint Gall at the receiving point (the railroad station). The city paid the difference, which amounted to 400 francs a month. The sale was limited to “that part of the public without income.” The total sales amounted to only 1,700 francs, the expenses to 6,131 francs, and the attempt lasted only from the first of November, 1911, to February 29, 1912.

During the winter months 1910–1911 and 1911–1912, Bern undertook to purchase potatoes at wholesale and to sell them at retail. In the latter year, it added the sale of white cabbages. As a matter of course the experiment resulted in losses.

Lausanne, during several days in 1910, sold potatoes with a profit of 230 francs 15 centimes, and distributed a balance of 1,340 kilos (2,948 lbs.) gratis.

In 1911–1912 Zurich sold 550 kilos (1,210 lbs.) of potatoes at a loss of 901 francs 25 centimes which was reduced to 569 francs, following a reduction in the freight costs of 332 francs 25 centimes made by the Federal railways. “A reduction of the freight rates has been granted for the transportation of food supplies from October 1, 1911, to May 31, 1912, if the supplies are to be utilized for the public good.”

Anybody who ships potatoes ships them for the public benefit since they are destined to provide food for those who buy them. This reduction, therefore, simply gave a subsidy to municipalities as against individual merchants. The figures that I have just reproduced prove that, if the Swiss, in order to live, had been forced to rely upon the municipality for their food in 1910–1911, they would all be dead of starvation.

As a matter of fact, 18 communes have made attempts at public regulation of food supplies, in order to combat the high cost of living. These are: Brugg (3,000 inhabitants); Weinfelden (4,000); Baden (6,050); Grenchen (5,202); Romanshorn (6,000); Thun (6,030); Herisau (13,853); Le Locle (13,197); Rorschach (13,481); Schaffhausen (17,148); Freiburg (20,300); La Chaux-de-Fonds (39,497); Lucerne (38,467); Saint Gall (35,000); Basle (129,600); Bern (78,500); Lausanne (59,327); Zurich (180,000).

Milhaud concludes his article with this enthusiastic statement:

“As a result of these public services we have remarked the following cost reductions: Potatoes, from 12 per cent, to 24 per cent.; fuel, 15 per cent. to 50 per cent.; fish, 30 per cent. to 50 per cent.”

Or in other words free competition is making a losing fight against public operation, and Edgard Milhaud considers this a most desirable state of affairs.

If the custom of providing government food should ever become general, it would be necessary for an individual to have great courage in order to engage in any similar undertaking in view of the prospect of being undersold by the municipality. The town can lose with impunity; the taxpayers will make up the loss. On the other hand, loss to a merchant means his whole financial standing in the community and that of those who may have placed confidence in him, all of whom have a right not to anticipate such disturbing factors as result from the intervention of municipalities turned merchants of potatoes, apples, cabbages, carrots, and fish.

The towns concerned would answer that their action was only one form of philanthropy. As a matter of fact, several of them did limit their sales to the poor. Others, however, did not take this precaution, and, in the majority of cases, they did not seek any justification for the measures they took.

I do not believe that the results of this investigation would encourage very many towns to follow the example of the 18 Swiss communes. They are such that it is not even necessary to furnish further arguments for an amendment to the law of 1884 prohibiting municipalities from going into business.

In 1911 there were several attempts in France to regulate the food supply. The mayor of Denain, M. Selle, opened a municipal slaughter house. Cattle decked with ribbons were conducted there solemnly to the tune of the “Internationale.” At the end of one week the undertaking developed the following figures (in francs):

The mayor called a halt. The indignant populace, whom he had promised to feed below cost, broke into his house, from which he managed to escape under the protection of the police. Thereafter neither the mayoralty nor the municipal council knew him more.

At Montpellier an attempt at a municipal slaughter house was made, which resulted in a loss of 6,000 francs.

Edgard Milhaud, who sees all attempts at public ownership through rose-colored glasses,1 has declared that at Eberwald, Thionville, and Freiburg-im-Breisgau the attempts at municipalizing a slaughter house were successful. According to the director of the abattoir of Freiburg, M. Metz, the experiment, which took place in 1895, was only temporary, and a burden while it lasted. The enormous waste, which may and does occur in such enterprises, renders management very difficult.

At Thionville experiments were made with pork in order to force the butchers to lower their prices. “The meager profits realized were divided between two old butchers who had been entrusted with the purchase, slaughter and sale of the meat.” In 1905, at Vienna, four municipal abattoirs were established, which disappeared after a short period.2

All these undertakings are direct attacks on commercial freedom. In Italy3 such attacks are made without scruple. Udine opened a municipal oven in order to ruin the existing bakeries. Verona sells fish to the injury of other fish merchants.

[1]Les Annales de la Régie Dirécte, Feb.-April, 1912.

[1]Annales de la Régie Directe, 1908.

[2]The Revue Bleue: La Municipalisation de la Boucherie, by Henri Martel, director of the Veterinary Service of the Prefecture of Police.

[3]See Book 4, The State, a Dishonest Man.