Unfortunately, many of the splendid assets enumerated possess no realisable value whatever, and many municipal enterprises are run without an adequate profit or with a loss.
The Socialist views and aims regarding local indebtedness are well summed up as follows by Suthers: "The 'municipal debt' argument is a bogey. The greater the municipal debt, the less private enterprise there will be. The greater the municipal debt, the cheaper and better the public services will be. The less private capital, the less profits going into a few pockets, the richer the general public will be. Up, then, with municipal debt."[684] These are principles which threaten to make Great Britain bankrupt. "The annual report of the work of the Local Government Board for 1907 shows that the local debt of England and Wales, from being 17 per cent. of the National Debt in 1879-80, has grown to 58.5 per cent. of the National Debt in 1904-5. The National and Local debts have grown as follows:
1879-80 1904-5 _Increase_ National Debt £770,604,774 £796,736,491 £26,131,717 Local Debt 136,934,070 466,459,269 329,525,199"[685]
Unless the Imperial Government interferes, the local debt will soon be larger than the National Debt.
We have seen in the beginning of this Chapter that, as regards local government, the Socialists pursue a twofold aim: (1) To level up their districts; (2) To urge their districts to launch out into something new. Therefore we find, as Mr. John A. Fairlie says in his book on "Municipal Administration," that "the danger of excessive debt is most serious in the smallest cities. The largest cities, while they have the largest debts, have also the largest resources, and also the best-developed financial administration. The cities of modest size, however, which attempt to equal the works of the metropolis without its available sources of revenue, are very likely to find themselves in serious difficulties."
The time may come, and it may come soon, when British local indebtedness will become greatly reduced by local bankruptcy and repudiation. That process would have no terrors for Socialists. They ought rather to look forward to it. As they demand the repudiation of the National Debt (see Chapter IX.), they should logically also strive to repudiate the local debt. A general repudiation of local debt would be the fitting and logical aim and end of municipal enterprise. Municipal enterprise aims at expropriating private property-owners, who, rightly considered, are paid not in cash but in debt certificates. The repudiation of all local debts would convey gratis to the municipality the municipally managed undertakings which, rightly considered, belong to the stockholders, and would at the same time ruin the capitalists who have advanced the money for acquiring those undertakings. The Socialist policy would triumph. This would be the fitting end of a rule by irresponsible and penniless demagogues.