On Municipal Ownership

On Municipal Ownership


(note -


Municipal Ownership means A government-owned corporation, state-owned company, state-owned entity, state enterprise, publicly-owned corporation, government business enterprise, or parastatal is a legal entity created by a government to undertake commercial activities on behalf of an owner government. Their legal status varies from being a part of government into stock companies with a state as a regular stockholder. There is no standard definition of a government-owned corporation (GOC) or state-owned enterprise (SOE), although the two terms can be used interchangeably. The defining characteristics are that they have a distinct legal form and they are established to operate in commercial affairs. While they may also have public policy objectives, GOCs should be differentiated from other forms of government agencies or state entities established to pursue purely non-financial objectives that have no need or goal of satisfying the shareholders with return on their investment through price increase or dividends.


The government-sponsored enterprises (GSEs) are a group of financial services corporations created by the United States Congress. The United States GSEs are private corporations owned by their stockholders, rather than government-owned corporations. Their primary function is to generate profits for their stockholders, but they are structured and regulated by the US government to enhance the availability and reduce the cost of credit to targeted borrowing sectors. Congress created the first GSE in 1916 with the creation of the Farm Credit System; it initiated GSEs in the home finance segment of the economy with the creation of the Federal Home Loan Banks in 1932; and it targeted education when it chartered Sallie Mae in 1972 (although Congress allowed Sallie Mae to relinquish its government sponsorship and become a fully private institution via legislation in 1995). The residential mortgage borrowing segment is by far the largest of the borrowing segments in which the GSEs operate. Together, the three mortgage finance GSEs (Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks) have several[quantify] trillion dollars of on-balance sheet assets.[citation needed] The federal government possesses warrants which, if exercised, would allow them to take a 79.9% ownership share in the companies. The federal government has not currently exercised these warrants. Government sponsored enterprises include:


Fannie Mae

Farmer Mac

Federal Home Loan Banks (former)

Freddie Mac

Sallie Mae (former)


The federal government chartered and owned corporations are a separate set of corporations enchartered and owned by the federal government, which operate to provide public services, but unlike the federal agencies (Environmental Protection Agency, Bureau of Indian Affairs), or the federal independent commissions (e.g. the Federal Communications Commission, the Nuclear Regulatory Commission, etc.), they have a separate legal personality from the federal government, providing the highest level of political independence. They sometimes receive federal budgetary appropriations, but some also have independent sources of revenue. These include:


Conrail (former)

Corporation for National and Community Service (Americorps)

Corporation for Public Broadcasting

Federal Crop Insurance Corporation

Federal Deposit Insurance Corporation

Legal Services Corporation

Millennium Challenge Corporation

National Railroad Passenger Corporation (Amtrak)

Overseas Private Investment Corporation

Panama Canal Commission (former)

Pension Benefit Guaranty Corporation

Resolution Trust Corporation (former)

St. Lawrence Seaway Development Corporation

Tennessee Valley Authority

The federal government acquired corporations are a separate set of corporations that were not chartered or created by the federal government, but the federal government has come into possession of and operates. These are corporations temporarily in possession of the Government as a result of a seizure of property of a debtor to the Government, such as a delinquent taxpayer. Usually these are awaiting auction, and most are too small to note.


There exists a second level of sovereign government in the United States after the federal government, those of the several states of which compose the United States. State governments are bodies sovereign, like the federal government, and other sovereigns; they have sovereign existence deriving from the consent of the sovereign people of their territories who created them and wrote their state constitution; they are not bodies corporate, as they are not created by the acquis of the federal government and exist with or without that Government's consent. As sovereigns, they have the power to hold radical title to land, to exercise the four fundamental powers, taxation, eminent domain, police power, and escheat, as well as numerous other powers, including the power to grant charters, and implicit in that power to charter is the power to charter corporations, which they do, extensively. The very vast majority of non-governmental corporations in the United States are chartered by the states of the US, and not the federal government, this includes most charitable corporations (though some charities of national repute are chartered by the federal government, and not by a state government), non-profit corporations, and for-profit corporations. States, as sovereigns, also have the power to charter corporations that they own, control, or are responsible for the regulation and finance of. These include municipal corporations and state chartered and owned corporations. Municipal corporations are public corporations that have devolved, democratic control over local matters within a geographic region; they are often styled villages, towns, townships, cities, or counties. Though these municipal corporations are often regulated and sometimes financed by the state government, and often can collect taxes, they are arms-length, non-sovereign, devolved public entities, and a State government which charters them is not legally responsible for their debts in the event of a municipal bankruptcy. State government chartered and owned corporations are numerous and provide public services. Examples include North Dakota Mill and Elevator or South Dakota Public Broadcasting. Generally speaking, a statute passed by a state legislature specifically sets up a government-owned company in order to undertake a specific public purpose with public funds or public property. Lotteries in the United States are also run by government corporations, such as the Georgia Lottery Corporation and many others.


There exists a third level of sovereign government in the United States as well, the sovereignty of the Native American tribal governments. Native American tribes are comprehended as ancient sovereigns, established by their sovereign people since time immemorial, and recognized as sovereign by the federal government of the United States as well as the several states, and as such, the Native American (and Alaska Native) tribal governments have rights appertaining to sovereigns, including the power to hold radical title to land, to exercise the four fundamental powers, taxation, eminent domain, police power, and escheat, as well as other powers, for instance, the power to charter corporations and undertake public undertakings that might benefit their tribal citizens, Native Americans and Alaska Natives also being citizens of their respective US state, and also citizens of the United States. For example, a tribal council could establish a public service broadcaster along the lines of RTE and partially fund it with a television licence on tribal land and partially through advertising as a means of uniting the tribe and giving it a voice as well as a commercial venture.


The Alaska Natives are particularly advanced in using their tribal sovereignty to incorporate corporations that are owned by and for the benefit of their tribal citizens and often compete in highly competitive economic sectors through the Alaska Native Regional Corporations. The Native American tribes in the lower 48 states often use their sovereignty and their ability to charter to compete using regulatory easements; for instance, Native American tribal corporations often trade in goods that are highly taxed in surrounding states (such as tobacco), or engage in activities that surrounding states have (for reasons of public policy) forbidden, such as the operation of casinos or gaming establishments. Most of these endeavors have proven very successful for Native American tribal sovereigns and their tribal corporations, bringing wealth into the hands of Native Americans.)



I AM for municipal ownership on one condition: that the civil service law be repealed. It’s a grand idea – the city the railroads, the gas works and all that. Just see how many thousands of new places there would be for the workers in Tammany. Why, there would be almost enough to go around, if no civil service law stood in the way. My plan is this: first get rid of that infamous law, and then go ahead and by degrees get municipal ownership.


Some of the reformers are sayin’ that municipal ownership won’t do because it would give a lot of patronage to the politicians. How those fellows mix things up when they argue! They’re givin’ the strongest argument in favor of municipal ownership when they say that. Who is better fitted to run the railroads and the gas plants and the ferries than the men who make a business of lookin’ after the interests of the city? Who is more anxious to serve the city? Who needs the jobs more?


Look at the Dock Department! The city owns the docks, and how beautiful Tammany manages them! I can’t tell you how many places they provide for our workers. I know there is a lot of talk about dock graft, but that talk comes from the outs. When the Republicans had the docks under Low and Strong, you didn’t hear them sayin’ anything about graft, did you? No; they’ just went in and made hay while the sun shone – That’s always the case. When the reformers are out they raise the yell that Tammany men should be sent to jail. When they get in, they’re so busy keepin’ out of jail themselves that they don’t have no time to attack Tammany.


All I want is that municipal ownership be postponed till I get my bill repealin’ the civil service law before the next legislature. It would be all a mess if every man who wanted a job would have to run up against a civil service examination. For instance, if a man wanted a job as motorman on a surface car, it’s ten to one that they would ask him: “Who wrote the Latin grammar, and, if so, why did he write it? How many years were you at college? Is there any part of the Greek language you don’t know? State all you don’t know, and why you don’t know it. Give a list of all the sciences with full particulars about each one and how it came to be discovered. Write out word for word the last ten decisions of the United States Supreme Court and show if they conflict with the last ten decisions of the police courts of New York City.”


Before the would-be motorman left the civil service room, the chances are he would be a raving lunatic Anyhow I wouldn’t like to ride on his car. Just here I want to say one last final word about civil service. In the last ten years I have made an investigation which I’ve kept quiet till this time. Now I have all the figures together, and I’m ready to announce the result. My investigation was to find out how many civil service reformers and how many politicians were in state prisons. I discovered that there was forty per cent more civil service reformers among the jailbirds. If any legislative committee wants the detailed figures, I’ll prove what I say. I don’t want to give the figures now, because I want to keep them to back me up when I go to Albany to get the civil service law repealed. Don’t you think that when I’ve had my inning, the civil service law will go down, and the people will see that the politicians are all right, and that they ought to have the job of runnin’ things when municipal ownership comes?


One thing more about municipal ownership. If the city owned the railroads, etc., salaries would be sure to go up. Higher salaries is the cryin’ need of the day. Municipal ownership would increase them all along the line and would stir up such patriotism as New York City never knew before. You can’t be patriotic on a salary that just keeps the wolf from the door. Any man who pretends he can will bear watchin’. Keep your hand on your watch and pocketbook when he’s about. But, when a man has a good fat salary, he finds himself hummin’ “Hail Columbia,” all unconscious and he fancies, when he’s ridin’ in a trolley car, that the wheels are always sayin’: “Yankee Doodle Came to Town.” I know how it is myself. When I got my first good job from the city I bought up all the firecrackers in my district to salute this glorious country. I couldn’t wait for the Fourth of July 1 got the boys on the block to fire them off for me, and I felt proud of bein’ an American. For a long time after that I use to wake up nights singin’ “The Star-Spangled Banner.”


Chapter 14. Tammany the Only Lastin’ Democracy

I’VE seen more than one hundred “Democracies” rise and fall in New York City in the last quarter of a century. At least a half-dozen new so-called Democratic organizations are formed every year. All of them go in to down Tammany and take its place, but they seldom last more than a year or two, while Tammany’s like the everlastin’ rocks, the eternal hills and the blockades on the “L” road – it goes on forever.


I recall offhand the County Democracy, which was the only real opponent Tammany has had in my time, the Irving Hall Democracy, the New York State Democracy, the German-American Democracy, the Protection Democracy, the Independent County Democracy, the Greater New York Democracy, the Jimmy O’Brien Democracy, the Delicatessen Dealers’ Democracy, the Silver Democracy, and the Italian Democracy. Not one of them is livin’ today, although I hear somethin’ about the ghost of the Greater New York Democracy bein’ seen on Broadway once or twice a year.


In the old days of the County Democracy, a new Democratic organization meant some trouble for Tammany – for a time anyhow. Nowadays a new Democracy means nothin’ at all except that about a dozen bone-hunters have got together for one campaign only to try to induce Tammany to give them a job or two, or in order to get in with the reformers for the same purpose. You might think that it would cost a lot of money to get up one of these organizations and keep it goin’ for even one campaign, but, Lord bless you! it costs next to nothin’. Jimmy O’Brien brought the manufacture of “Democracies” down to an exact science, and reduced the cost of production so as to bring it within the reach of all. Any man with $50 can now have a “Democracy” of his own.


I’ve looked into the industry, and can give rock-bottom figures. Here’s the items of cost of a new “Democracy”


A dinner to twelve bone-hunters $12.00 

A speech on Jeffersonian Democracy 00.00 

A proclamation of principles (typewriting) 2.00 

Rent of a small room one month for headquarters 12.00 

Stationery 2.00 

Twelve secondhand chairs 6.00 

One secondhand table 2.00 

Twenty-nine cuspidors 9.00 

Sign painting 5.00 

Total $50.00


Is there any reason for wonder, then, that “Democracies” spring up all over when a municipal campaign is comm’ on? If you land even one small job, you get a big return on your investment. You don’t have to pay for advertisin’ in the papers. The New York papers tumble over one another to give columns to any new organization that comes out against Tammany. In describin’ the formation of a “Democracy” on the $50 basis, accordin’ to the items I give, the papers would say somethin’ like this: “The organization of the Delicatessen Democracy last night threatens the existence of Tammany Hall. It is a grand move for a new and pure Democracy in this city. Well may the Tammany leaders be alarmed; panic has already broke loose in Fourteenth Street. The vast crowd that gathered at the launching of the new organization, the stirrin’ speeches and the proclamation of principles mean that, at last, there is an uprisin’ that will end Tammany’s career of corruption. The Delicatessen Democracy will open in a few days spacious headquarters where all true Democrats may gather and prepare for the fight.”


Say, ain’t some of the papers awful gullible about politics? Talk about come-ons from Iowa or Texas they ain’t in it with the childlike simplicity of these papers.


It’s a wonder to me that more men don’t go into this kind of manufacturin’ industry. It has bigger profits generally than the green-goods business and none of the risks. And you don’t have to invest as much as the green-goods men. Just see what good things some of these “Democracies” got in the last few years! The New York State Democracy in 1897 landed a Supreme Court Justiceship for the man who manufactured the concern – a fourteen-year term at $17,500 a year, that is $245,000. You see, Tammany was rather scared that year and was bluffed into givin’ this job to get the support of the State Democracy which, by the way, went out of business quick and prompt the day after it got this big plum. The next year the German Democracy landed a place of the same kind. And then see how the Greater New York Democracy worked the game on the reformers in 1901! The men who managed this concern were former Tammanyites who had lost their grip; yet they made the Citizens’ Union innocents believe that they were the real thing in the way of reformers, and that they had 100,000 voter back of them. They got the Borough President of Manhattan, the President of the Board of Aldermen, the Register and a lot of lesser places. it was the greatest bunco game of modern times.


And then, in 1894, when Strong was elected mayor, what a harvest it was for all the little “Democracies’, that was made to order that year! Every one of them got somethin’ good. In one case, all the nine men in an organization got jobs payin’ from $2000 to $5000. I happen to know exactly what it cost to manufacture that organization. It was $42.04. They left out the stationery, and had only twenty-three cuspidors. The extra four cents was for two postage stamps.


The only reason I can imagine why more men don’t go into this industry is because they don’t know about it. And just here it strikes me that it might not be wise to publish what I’ve said. Perhaps if it gets to be known what a snap this manufacture of “Democracies” is, all the green-goods men, the bunco-steerers, and the young Napoleons of finance will go into it and the public will be humbugged more than it has been. But, after all, what difference would it make? There’s always a certain number of suckers and a certain number of men lookin’ for a chance to take them in, and the suckers are sure to be took one way or another. It’s the everlastin’ law of demand and supply.

2011-9-4 8:53:56

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