Municipal Trading
| Date | 01 July 1927 |
| Author | J. L. Mackenzie |
| Published date | 01 July 1927 |
| DOI | http://doi.org/10.1111/j.1467-9299.1927.tb02295.x |
Municipal Trading
By
J.
L.
MACKEKZIE,
M.A.,
LL.B.,
J.P.
[Paper
reid
to
the
Institute
of
Public Adminastratio;i, Glasgoio,
OIZ
5th
Nniember,
19261
UNICIPAL trading, although taken part in by every municipality
M
of any consequence to
a
greater or less estent, has probably
given rise to more controversy than any other municipal activity. Not-
withstanding the period during which municipalities have exercised
trading powers, the policy involved in municipal trading is still matter
of
dispute. Every proposal to extend the scope of municipal trading raises
anew the old controversy. There may be differences of opinion, too,
regarding the undertakings carried on by municipalities that come within
the scope of municipal trading, but these may be disregarded,
as
they
haw no bearing on what
I
have to say. By municipal trading
I
mean
generally all these undertakings camed on by municipalities which
if
they
were carried on by companies or individuals would be carried on for the
purpose of making a profit.
While municipal trading has its roots in the remote past, very little
progress was made, so far as this country
is
concerned, until the middle
of last century, by which time the era
of
industrial development which
set in early in the century had led to the expansion
of
the larger burghs.
One of the earliest forms of trading
was
the holding
of
markets. These
markets were usually established under the authority
of
Royal Charters.
In the case of Glasgow the markets which are now carried
on
by the
Corporation of the City under Statute had their origin in a Charter
obtained in the year
1176.
Other early
forms
of municipal trading
related to water supply and harbours. With regard to the former,
Southampton,
I
think, gets the credit
of
instituting the first municipal
water supply. This has been in the hands
of
that burgh since
1440.
Glasgow did not get authority from Parliament to buy up the water
companies that formerly supplied the city with water and bring water
from Loch Katrine until the year
1855,
a
Bill promoted for the purpose
the preceding year having been rejected by Parliament. There are
several instanccs
of
harbours that have been maintained by burghs for
over
300
years. By a Charter granted in
16GS
Glasgow was authorized
to
establish a port and harbour at Port-Glasgow, but this undertaking
did not prove
a
success, and in course
of
time the alternative was adopted
244
Mu
nicip
a1
Trading
of deepening the River Clyde, and making a port and harbour at Glasgow.
This work was instituted by the Corporation, but in
1819
the undertaking
was transferred to the Clyde Navigation Trustees, who continued the
policy which had been inaugurated by the Corporation.
All
that remains
to the Corporation of the Port-Glasgow venture is
an
interest which they
still retain in certain lands which they acquired in connection. with the
undertaking and from which they derive some small annual payments.
While there are,
as
I
have said, instances
of
municipal trading that
go
back beyond the middle of last century, these are comparatively limited
in number, while the undertakings carried on were also more or less
limited to those
I
have mentioned. Since that time, however, there has
been an extension, both in range and character, of the undertakings
carried on by municipalities. With perhaps one exception, to which
I
will
refer
in
;I
moment, the initiation
of
the undertakings
was
generally
due to private enterprise, the undertakings being subsequently acquired,
either by agreement
or
compulsorily, by the municipalities. The first
and most important of all to be acquired on
a
large scale were the water
undertakings. Sheftield led the way in
1830,
Manchester acquired their
undertaking in
1847,
and Glasgow,
as
I
have already said, bought out
the water companies in
1855.
This policy was generally adopted through-
out the country, with the result that to-day the water supply is for the
most part in the hands
of
the municipalities, or in those of Boards or
Trusts on which they are represented.
Not content with buymg up the water works, municipalities then
began to devote attention to other utilities such as markets and harbours
stdl in private hands. Many
of
these have been acquired from time to
time. The use of
gas
as
an
illuminant afforded another opportunity to
enlarge the scope of municipal enterprise. The original
gas
works were
nearly all established by companies, Manchester being
a
notable exception,
their undertaking having been instituted
by
that municipality
as
long ago
as
1824.
In the case of Glasgow the supply of gas
was
at one time in
the hands of two companies, the Glasgow Gas Light Company and the
City and Suburban Gas Company of Glasgow. The Corporation bought
the companies’ undertakings in
1869,
the purchase being confirmed by
Parliament by an Act passed the
same
year. Many other municipalities
throughout the country have
also
acquired the gas works in their areas,
some compulsorily, some voluntarily, but municipal ownership
is
not
quite so common in the case
of
gas
as
in that
of
water. In Sheffield, for
instance, which was the first municipality to take over the water under-
taking, the supply of
gas
is
stdl
in
the hands of
a
company.
The construction of tramways, which began to be undertaken on a
consiaerable scale about the year
1870,
afforded a further opportunity to
extend the sphere of municipal enterprise. At first, Parliament, while
it
authorized municipalities to construct tramways, did not generally
245
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