[226]. It was the custom to take such individual measures as were approved by the various committees and put them all together into what was called an “omnibus bill”, providing for many millions of dollars to be spent upon the erection of new post-offices, the dredging of harbors, and so on. In these bills every congressman expected to get something for his district, whether there was need or not. Such grants of money were commonly known as “pork barrel” appropriations. One way of keeping congressmen in Washington until the very last day of the session was to hold back these appropriations until just before adjournment. Every senator and representative would then stay at his post lest by some mishap his particular item might be dropped out.
[227]. About ten billion dollars of this total was loaned by the United States to England, France, and other countries to help them carry on the war (see pp. 613-614).
[228]. There are some exceptions. The income from the first issue of Liberty Bonds is entirely exempt from national taxation; the income from the other issues is exempt up to a certain amount for a designated period of years. All the bonds issued by the national government are exempt from state and local taxation. Bonds issued by states, counties, cities, and other municipalities are exempt from national taxation; they may or may not be exempt from state and local taxes, depending usually upon where the owner resides. For example, if a man owns bonds issued by the city of San Francisco and resides in California, the income from these bonds is exempt from state and local taxes; but if the owner resides in some other state which has an income tax, the income is taxable.
[229]. The debt of New York state is about one hundred and thirty-five millions; no other state has a debt half as large. A few states have no debts at all. The total net debt of the counties, cities, towns, villages, and other communities is nearly five billions. It would be conservative to say that the total public indebtedness of the American people today is about twenty-eight billions. From this may be subtracted, of course, the ten billions owed to the United States by other countries. But even allowing for this, the debt is about $700 per family.
[230]. It is a sound rule of public finance that bonds ought not to run for a longer period than the estimated life of a public improvement[improvement]. For example, if a new street pavement is estimated to be good for twenty years, the bonds should all be repayable within that term. Very often, however, the taxpayers of American cities have been paying off paving bonds long after the pavements have completely worn out.
[231]. The cost of any public service is made up largely of two items, overhead charges and running expenses. In the case of electric light the overhead charges include interest on the capital invested in power houses, machinery, wires and poles, conduits; also such things as insurance, taxes, and rentals, which go on whether the plant produces much or little. Running expenses include the cost of labor, coal, supplies, etc., and these things, of course, vary with the amount of business done. Overhead charges often make up half the cost of producing electric current; so if you double the overhead, the price to the consumer would go up, not down.
[232]. Public service companies, when the government gives them the power to take private property by right of eminent domain must pay just compensation for what they take. The government could not give a company power to take private property without compensation, for it does not itself possess that power.
[233]. Franchises were often granted in perpetuity. When the laws forbade the granting of perpetual franchises the attempt was sometimes made to evade this restriction by granting them for 999 years. Sometimes the grant of a franchise was put through the board of aldermen or the city council without any notice being given to the public. Loud protests then followed, but they availed little after the grant had been made.
[234]. These payments are arranged in a variety of ways. Sometimes a gas company pays the city so much per year for every mile of gas-mains or so much per million cubic feet of gas sold. Street railway companies occasionally pay so much each year per mile of track. More commonly the payment is based upon gross earnings or upon the value of the company’s capital stock, or upon the estimated value of its franchise. In some instances the franchise is sold to the highest bidder, that is the company which offers to pay most for the privilege of using the streets gets it.
[235]. The street railway system of Boston, for example, operates in more than twenty other cities and towns. A single telephone company sometimes controls the telephone service in all the cities and towns of the state or even in several states.