and the township system of government in the Middle West where the streams of influence from New England and the South join, and it is uncertain for the time being, which shall have the mastery. In a measure this is true, but it is furthermore a natural development in newly settled territory, to pass from the larger to the smaller unit. A sparsely settled district can naturally manage with a simpler form of government than a community in which men's interests meet and overlap on every hand. When a county becomes more populous, and public affairs engross a larger share of the people's attention, the need is felt for a more intensive system of administration.

The citizens of the counties often themselves decide when, in their view, the time has arrived for the township system to be introduced. In seven States,-California, Illinois, Missouri, Nebraska, North Dakota, Washington and Wyoming, this referendum finds a place in the Constitutions. For example, the Constitution of Missouri says: " The General Assembly may provide by general law, for township organization, under which any county may organize whenever a majority of the legal voters of such county voting at any general election, shall so determine. In any county which shall have adopted township organization, the question of continuing the same may be submitted to a vote of the electors of such county at a general election, in the manner that shall be provided by law; and if a majority of all the votes cast upon that question shall be against township organization, it shall cease in said county." 54

*

*

54 Constitution of 1875, art. ix, secs. 8 and 9.

CHAPTER X

THE LOCAL REFERENDUM-LOAN BILLS AND FINANCIAL PRO

POSALS

COMING now to the second large class of referenda in communities in the United States we find that it includes those in relation to taxation and expenditure and the administration of the local finances. This is a department of public management in which there is room for much abuse, especially in large cities, and as a convenient method, in the first place, of putting a wholesome check upon representative officials and, in the second place, of transferring the responsibility for some rather debatable policy to the shoulders of those upon 'whom the burden will bear, that is the people at large, this plebiscite has attained a remarkable development in all parts of the Union. The officers of cities, counties and towns in many cases grossly betrayed the trust reposed in them and often heaped up large debts which were contracted on the credit of the community. This debt at times has weighed very heavily upon the ratepayers, and in some cases had wholly to be repudiated, as in a few of the States also, at an earlier period. To avoid the repetition of such scandals and to keep the debt contracting proclivities of city councilmen, county commissioners and other officers entrusted with such powers in reference to the various local communities within proper bounds, the constitutional convention at last took this subject in hand. It has thus come about that there is a large number of constitutional provisions on this topic at the present time, and these have been supplemented by laws passed by the legislatures, until the enactments in this field of legislation are of almost endless variety. There is not a State in the Union in which the electors at large have not been

brought in to some extent to balance the representative boards and legislatures, with the object of securing honester and more economical management. In the main the results are considered to have been better, strange as this may seem to those who cannot well conceive of government except as it is embodied in the persons of a few wise and considerate men, than under the old system prior to the time the people were invested with the local veto.

This referendum appears in at least three separate forms on three large classes of subjects as follows:

(1) Loaning the public credit to industrial and other private companies.

(2) Expenditure of public money directly by the government itself.

(3) The sale or lease of public lands and other public property.

The local plebiscite on these three different classes of subjects is almost entirely an outgrowth of the latter half of the nineteenth century. A beginning was made with it, however, at a somewhat earlier period in a form which is so characteristic that I have put it at the head of the list, namely, (1) The loaning of the public credit to industrial and other private companies organized for the purpose of helping forward with the economic development of a given territorial district. The experience has not been the same among all peoples but it was the method in vogue in the self-governing Anglo-Saxon communities of America at first to give as little as possible to the government, retaining for private pursuit and gain the business of transportation, public lighting, the furnishing of a public water supply, etc. The American communities had in the beginning only a bare framework of power. When roads were to be built they were constructed and owned by private companies who charged travellers a fee for passing over them. When streams were to be crossed private persons bridged them and collected tolls of those who wished to reach the other side. The railways and most of the American canals have had a similar history and the

government with us at any rate in the newer communitiesuntil a recent time, has exercised few functions which would make it a competitor in any way with private enterprise. So firmly established was this idea in our polity that it was carried to the point of excluding the community from the function of educating the young at government cost, and many other of the state's activities, now rarely brought into question by anyone, had not yet begun to be exercised. It was argued, on the one hand, that it could not be the duty of the richer and more favored classes to assist in educating the children of the poor, and, on the other hand, that it would be an injustice for government to found and maintain free schools since those citizens who conducted educational institutions for private profit would thus be deprived of a means of personal financial advancement. Ideas in the laissez faire economy so extreme as these have been generally abandoned. But the general question as to the expediency of performing many classes of local functions at the public expense is still a matter which is frequently referred to a direct vote of the taxpayers.

It was an early stage of the development toward complete state ownership and management to assist private corporations in respect of local works, and the people's participation in voting grants and guarantees to improvement companies of this kind was an interesting phase of the movement. A very early instance of the employment of such a method as a means to an amicable result in the settlement of a question of appropriating public money in behalf of an internal improvement is furnished by Virginia. In 1784 the legislature of that State passed an act which had for its object the deepening of the channel of the James River. Later it was desired still further to open up the interior of the country, to establish, indeed, a complete line of communication from tidewater by way of the James and Jackson Rivers to the Kanawha River and thence to the Ohio and the Mississippi. "A large ma

'Acts of Virginia, 1832-33. p. 57.

jority of the citizens" of Richmond being of opinion that the corporate authorities should "subscribe to the stock" of a company, "the James River and Kanawha Company ", an act was adopted by the Virginia legislature in 1833 authorizing the city to make a subscription of $400,000 to this enterprise.2 In 1835 a second act conferring authority upon the city to subscribe an additional sum of $250,000 to the stock of the company was passed by the State legislature, again at the expressed desire of the people of Richmond." In each case the city authorities were empowered to borrow money on the credit of the municipality and to tax the citizens in order to raise the necessary funds to pay the interest on the loan and the principal of the same as it should fall due. Although these laws were not submitted to the people of Richmond by way of the referendum, they were passed in response to petitions very numerously signed, and the principle is so similar that the case is of much interest as indicating how one important class of conditional legislation made its way into the American practice.

The question of communication was a very serious one as the colonists pushed farther and farther into the interior of the continent. The commercial interests of the country were rapidly expanding, the need for facilities of transport from one section of the Union to another was much greater than was the ability of a financially poor population to satisfy it. Canals were to be constructed wherever water communication was possible. "Turnpikes ", "plank roads" and other highways of public traffic were to be built so that wagoning over the natural, unimproved routes would be less laborious and haulage by horse or mule or ox between the principal points might become a feasible form of commerce. A conditional law to the advantage of private turnpike companies was passed by the legislature of Pennsylvania in 1842. By

2 Acts of Virginia, 1832-33, p. 57.

Acts of Virginia, 1834-35, p. 70; cf. Goddin v. Crump, 8 Leigh. P. 120.

Laws of 1842, p. 233.