Fabian Tract No. 86. 


MUNICIPAL DRINK TRAFFIC 


WITH A CRITICISM OF LOCAL VETO 
AND OTHER REFORM PROJECTS. 


PuBLISHED BY 

THE FABIAN SOCIETY. 

PRICE ONE PENNY. 

L01\'DON: 
To H~: oBTAr:-.r:n o~< THE FAHI.-1.:-> SociETY, 276 STRA:->D, \V.C. 
1\'on:~!BER 189 . 



MUNICIPAL DRINK TRAFFIC. 


FEw can be found to deny that the drinking customs and licensinglaws of England need drastic reform. With the teetotal movement, 
so far as its methods are personal and moral, we have no quarrel and 
no present concern. Our subject is the political aspect of the 
drink question and the amendment of the law of licensing. 

Neither of the great political parties has reason to be proud of its 
experiments in legislation for the regulation of the drink traffic. The 
Conservatives pr posed a scheme f reduction of licences with com-
pen ati n, which was swept out of existence by a storm of public 
anger; and now they venture on nothing more serious than a Royal 
Commission, destined to produce the same results as most other 
Royal Commissions. As for the Liberals, ir William Harcourt, in 
preparing his ill-advised and badly planned measure, blindly followed 
the lead of the militant teetotal party, and ignored the views of his 
late chief, who, with his u ua\ wisdom, had "but a poor opinion of 
mere limitati 11 by reducing the number of licences," and favored 
the Gothenburg system, or, as an alternative, "free trade with 
adequate taxation."" 

The Local Veto Bill. 

The Government Bill of 1895 was crude 1 cal veto, a plan workable 
perhaps in the Australian bush, but quite un uited to Lanca hire and 
Lond n. It gave a majority of two-thirds of th voters the power of 
vet ,and a bare majority power to reduce by one-fourth the number of 
licences issued. The area selected was the smallest possible, namely, 
the ward of any parish or borough where ward existed. Sir William 
seems to have read parts of Mr. Fanshaw's American Report, and a 
tract or two on the Gothenburg system, and with this mental equipment 
he set up as the leader of the Liberal Party on its new 
teetotal crusade. The House of Comm ns did not reject the bill, 
and the c untry in consequence rejected the House of Commons. 

Prohibition a Failure. 

Th fatal objection to any scheme permitting the prohibition of 
the sale of liquor is that wherever it has been tried it has proved 
a failure, unle s th prohibitive di trict contains only a thiu rural 
populati n. In such districts, and in a few exceptional places, it 
may occa ionally be enforced ; but it has never succeeded in any 
large t wn other than a place such as Cambridge, Massachusetts, 
which is practically a suburb of Boston. Attempts to enforce prohibition 
result in immediate reaction and repeal of the law, as in 

• Letter from Rt. IIon. W . E. Gladstone to Mr. Snape, quoted in Pall ilEal/ Ga:ullt, 
4th October, 1895· 

3 

Iowa and ten other American States, and in Canada under the Scott 
Act, or else in an enormous expansion of illicit trade. In Portland, 
the chief town of Maine, during twenty-one years, from 1872 to 
1892, there were only two years (1874 and 1892) in which less than 
1,ooo persons were arrested for drunkenness, and, in I875, as many 
as 2,400 such arrests were made. The population increased from 
3I,4I3 in 1870 to 36,425 in 189o, and, on the average, less arrests 
were made in the later years. But the fact remains that prohibitionin Portland does not prevent drunkenness. In Bangor (Maine)
the law is openly defied, and there are said to be 300 drink 
shops for a population of 2o,ooo. Kansas is a prohibition State, but 
in its largest town, Kansas City, the law is a dead letter. In Leavens-
worth, with 2 I ,ooo inhabitants, there are I 2 5 saloons which are regularly 
fined once a month. In Iowa, in I885, under prohibition,
according to a special report by Senator Sutton, there were I,837 
open saloons; and Mr. Fanshaw, author of an admirable report on 
American liquor legislation, from which much of our information 
has been derived, found that liquor was sold there in I893 without 
any sort of concealment, and a "grand masquerade ball given 
by the saloon-keepers and bar-tenders of Davenport" was billed on 
all the hoardings. In Fulton County, Georgia, which under local 
option had strict prohibition, 57 persons took out Federal licences to 
sell liquor in I887. This is but one example of a very common 
practice in America. The Federal licence law is strictly enforced, 
and is obeyed even where obedience is zjso facto evidence accessible 
to all of disobedience to the State law. In Des Moines, another prohibition 
town, the visitor can get liquor freely at his hotel, but the 
card on which he writes his order is headed "pharmacy" instead of 
"wine list."* 

The Report of the Committee of Fifty,t issued last year, on the 
results of Prohibition in the United States, is almost conclusive. 

PROHIBITION. 

Prohibitory legislation has succeeded in abolishing and preventing the manufacture 
on a large scale of distilled and malt liquors within the areas covered by it. In districts 
where public sentiment has been strongly in its favor it has made it hard to 
obtain intoxicants, thereby removing temptation from the young and from persons 
disposed to alcoholic excesses. . . . . 

But prohibitory legislation has failed to exclude intoxicants completely even from 
districts where public sentiment has been favorable. In districts where public sentiment 
has been adverse or strongly divided, the traffic in alcoholic beverages has been 
sometimes repressed or harassed, but never exterminated or rendered unprofitable. In 
Maine and Iowa there have always been counties and municipalities in complete and 
successful rebellion against the law. . . . . 

• Liquor Legislation in the Untied Stales and Canada. By E. L. Fanshaw. (Cassell, 
1895); pp. rr2, 137, 153, 325, etc. 
t This Committee, formed in 1893. includes the leading economists and sociologistsof the United States. The Liquor Problem Sub-Committee (Charles W . Eliot, Seth 
Low, and James C. Carter) employed Messrs. F. H . Wines and]. Koren to make the 
investigation embodied in the book, The Liqurw Problem in its Legislative Aspects 
(Boston: Houghton, 1897; and Gay, London-6s.). The passage quoted above is 
from the introduction (pp. 4, 5 and 6 ), and is signed by the sub-committee of three 
already named. 


4 


There have been concomitant evils of prohibitory legislation. The efforts to 
enforce it during forty years past have had some unlocked-for effects on public respect 
for courts, judicial procedure, oaths, and law in general, and for officers of the law, 
legislators, and public servants. The public have seen law defied, a whole generation 
of habitual law-breakers schooled in evasion and shamelessness, courts ineffective 
through fluctuations of policy, delays, perjuries, negligences, and other miscarriages 
of justice; officers of the law double-faced and mercenary, legislators timid and insincere, 
candidates for office hypocritical and truckling, and office-holders unfaithful 
to pledges and to reasonable public expectation. Through an agitation which has 
always had a moral end, these immoralities have been developed and made conspicuous. 
The liquor traffic, being very profitable, has been able, when attacked byprohibitory legislation, to pay fines, bribes, hush-money and assessments for political 
purposes, to large amounts. This money has tended to corrupt the lower courts, 
the police administration, political organizations and even the electorate itself. 
Wherever the voting force of the liquor traffic and its allies is considerable, candidates 
for office and office-holders are tempted to serve a d:111gerous trade interest, which is 
often in antagonism to the public interest. Frequent yielding to this temptationcauses general degeneration in public life, breeds contempt for the public service, and 
of course makes the service less desirable for upright men. Again, the sight of 
justices, constables and informers enforcing a prohibitory law far enough to get from 
it the fines and fees which profit them, but not far enough to extinguish the traffic 
and so cut off the source of their profits, is demoralizing to society at large. All 
legislation intended to put restrictions on the liquor traffic, except, perhaps, the simple 
tax, is more or less liable to these objections; but the prohibitory legislation is the 
worst of all in these respects, because it stimulates to the utmost the resistance of the 
liquor dealers and their supporters.

Of course there are disputed effects of efforts at prohibition. Whether it has or 
has not reduced the consumption of intoxicants and diminished drunkenness is a 
matter of opinion, and opinions differ widely. No demonstration on either of these 
points has been reached, or is now attainable, after more than forty years of observation 
and experience. 

It seems therefore that, except in rural districts, a Prohibitive 
Liquor law cannot be enforced. The police will not arrest offenders; 
the magistrates decline to commit them; the juries refuse to convict. 
We do not want to establish in England the habit of passing laws and 
then neglecting to see that they are obeyed. Nothing is so demoralizing 
to a people as defiance of the laws which they themseh-es have 
made. If, therefore, prohibition cannot be enforced when enacted, let 
us set our faces steadily against enacting it. 

Other Objections to Local Veto. 

A CLASS MEASURE. 
The first result of allowing any ward of an electoral area to veto the 
issue of licences would be that respectable residential districts would 
still further protect themselves from the "lower orders'' by dri \·ing 
out the public-houses in their midst. South Kensington electors 
have their clubs in Pall Mall, their resorts in the City, and 
well-stocked cellars at their houses. The cab-drivers and dustmen, 
the grooms and greengrocers, who are obliged to live and work in 
the \,Yest End, would be forced to go elsewhere for the refreshment 
they desire. This is no imaginary objection. It is exactly what is 
happening in Massachusetts. The growth of" a no-licence regzine in 
that State is solely attributable to the action of cities and towns 
within a radius of twelve miles from the centre of Boston."'" So in 

• The Lzquor Problem, p. 227. 

5 


London the wealthy wards of Hampstead and Kensington, Wimbledon 
and Chiswick, would protect themselves at the expense of the 
already over-l_icensed central districts, just as Edgbaston already is 
protected by Its owner to the detriment of the rest of Birmingham. 

INEFFECTIVE LEGISLATION. 

By its essence local option and veto would not affect those 
districts where a reduction in the number of licences is most wanted. 
The glaring gin-palace is dangerously attractive to dwellers in the 
neigh boring slums ; the low public-hou e fosters the growth of 
criminal classes. What good would local veto do amongst such 
populations ? Does any sane person suppose that wards in White-
chapel or Soho, or the dock districts of Hull and Liverpool, would 
give a majority of teetotal voters? Legislation on the principle or 
asking the blind to lead the blind is not up to the standard of 
modern political science. 

THE PLAN OF REFERENDUM. 

This is not the occasion to discuss the place of a referendum or 
popular vote in modern political machinery. It is enough to saythat experience (as under the Scott Act in Canada) shows that the 
"local option" vote is singularly unstable; and constant change from 
licence to no licence (or, as the American phrase is, "from a wet to a 
dry vote") would in our opinion in no way suit the temper and 
habits of the British people. Especially unsatisfactory would be such 
instability in the event, which is not improbable, of the adoption of 
a compensation scheme in any bill for reduction of the number of 
licences. It would be a grand pull for the publicans to be ousted 
and compensated (in the liberal English fashion) one year and 
reinstated the next by a popular vote. By a little skilful wire-
pulling and canvassing the big brewery companies could thus gathera rich harvest from their tied houses. 

LOCAL OPTION FUR REDUCTION OF LICENCES. 

There is some show of argument for taking a popular vote on 
the question of veto. There is no reason at all for asking each 
locality to determine by a vote whether or not it will reduce by one-
fourth the number of its licences. At present the justices exercise 
their discretion, and grant such licences as in their opinion are 
required. The right principle clearly is to continue this discretion 
to the licensing authority, but to limit it by a maximum and minimum 
fixed by general law. The total number of licences is not 
usually a matter of the first importance, and in those districts which 
at present are debauched by an excess of drink-shops, reduction can 
only be carried out by an independent authority, which should be 
responsible to the electors of a much larger area, and should be 
guided by a general limitation statute. The right number of 
licences for a district is a matter which should be decided on 
evidence by a representative body acting on full information laid 
before it. Even doctrinaire democrats would not propose that the 


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number of police in each ward should be determined by a local vote, 
in order that the wishes of the criminal districts might be adequately 
carried out. 

PRIVATE INTEREST IN DRINK SELLING. 

Even more important is the objection that local veto does not 
touch the more serious evils of the present system. It does nothing 
to remove the private element in the trade which in our view is the 
root of the evil. The profits of the trade would still flow into private 
purses, and the consumer would pay huge dividends to brewery companies, 
because the law banishes free competition. We do not desire 
the increase of competition or the decrease of prices, but we object 
to the creation of a profitable monopoly by law, and the appropriation 
of its profit by private people. Nothing is done by local option 
to remove from the retailer the incentive to encourage his customers 
to drink. The private licensee remains as anxious as ever to make 
his living out of the excesses of his victims. 

" THE TRADE " IN PoLITICS. 

Local veto increases the concern of the liquor dealers in politics 
but takes no step to deprive the trade of the malign power which at 
present it exercises so vigorously. Local option is to social reform 
in the same relation as charity to social suffering. As the ignorantand well-meaning person attempts to cure poverty by giving coppers 
to beggars, so the local vetoist tries to cure drunkenness by shutting 
public-houses; and he adopts a popular vote because it is the easiest 
form of machinery to devise, and transfers responsibility of action 
from the legislator to the elector, just as the donor of charitable 
doles saves himself the trouble and responsibility of deciding on 
the complex but real remedies for the distress which he cannot 
ignore. 

• Other Reform ProjeCl:s. 
Local option and local veto hold the field as temperance remedies. 
They have been put forward by Ministers of the Crown and have 
achieved the overthrow of a party. But there are other proposalsseriously advocated which merit a short notice. 

In 1893, the Bishop of Chester introduced a bill into the House 
of Lords "for establishing a system of retail sale of intoxicating 
liquor by an authorized company." It provided that any district 
might decide by a ballot to adopt the Act ; that on adoption by a 
bare majority no new licences should be issued except to a company;
and after five years all licences should be handed over to the company, 
which meantime should have power to take over existinglicences on payment of full compensation. Profits over 5 per cent. 
were to go to old age pensions, public libraries, hospitals and the 
like. In other respects the bill is a close copy of the Gothenburg 
system. It is a carefully thought-out scheme and its draftsman 
deserves much credit for it, but of course the House of Lords threw 
it out on the second reading. 


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In the same year the Bishop of London introduced a bill to 
establish elective licensing boards which, after five years, should not 
have power to grant more licences than I per I,ooo population in 
towns, and I per 6oo in rural districts. The board, apparently,
could refuse all licences. This bill also was rejected. 

Other less authorized programs must be dismissed in a word or 
two. Aberdeen has a project to enable the municipality to administer 
the traffic through a committee, to consist two-thirds of 
town councillors and one-third of persons nominated by the council ; 
but the committee's decisions would be subject to the council. 
Absolute veto after a two-thirds vote on a referendum, and in any 
case a five years moratorium are provided. A somewhat similar 
scheme emanates from Dundee, according to which a specially 
elected board would become the licensing authority, and would 
have power to municipalize or to license a philanthropic company. 
The fatal clause allowing absolute veto on a two-thirds vote app'ears 
as usual. 

THREEFOLD OPTION. 
The Scottish Threefold Option Alliance,• an active society with 
many influential supporters in Scotland, has a more important project 
embodied in a Bill (No. 196) introduced on 3rd May, 1898. By its 
provisions the Town and County Councils of Scotland would become 
the Licensing Authorities, and would be empowered to take a poll of 
the electors on three issues. The alternatives are: (I) Prohibition, 
which would require a two-thirds majority; (2) Limitation, according 
to which, after five years, no more than one licence for 300 electo1'S in 
an urban district, and one per I so elect01'S in a rural district, would be 
issued. These licences would be sold by auction to the highest bidder. 

(3) The third option is for Local Management, and provides that, after 
five years, the Licensing Authority shall take over the managementof the traffic and conduct it by means of a committee, or through a 
public company on the 4 per cent. Gothenburg basis. 
There are in the Bill some minor clauses, such as that for the 
constitution of a publicly supported Temperance Reform Fund, 
which should be deleted when it is next introduced. Apart from 
these, and excepting the popular vote and the prohibition alternative, 
which we cannot endorse for reasons given already, the scheme 
is one of the best that has yet been drafted, and is an important 
step in the education of public opinion. 

MR. CHAMBERLAIN'S PROPOSALS. 
But the most important project of reform is a good deal older 
than these, and comes from a city once famous as the vanguardof municipal advance. Speaking before the House of Lords Committee 
on Intemperance in I877, Mr. Joseph Chamberlain stated 
that the Birmingham Board of Guardians unanimously and the 
Town Council by forty-six to ten had approved a detailed scheme bywhich the Corporation could municipalize the liquor traffic of the 
town. He desired to obtain compulsory powers to buy licensed 

" I 36 Wellington Street, Glasgow. 


premises at the market price, which returned ten per cent., whilst 
the money could be borrowed at four per cent. In ten years he 
reckoned that the whole of the licences would belong to the Corporation. 
He preferred headquarters to a semi-private company,
and scouted the idea that there could be any valid objection to 
municipal trading: all large municipalities were traders already.

The Committee issued a very statesmanlike report on Mr. Chamberlain's 
evidence, pointing out that it offered the following adnntages, 
viz. : (I) local control ; (2) diminution of number of licences ; 

(3) removal of private interest in sales; (4) good liquor ; (S) remov:J.l 
of publican influence on elections; (6) reduction of drunkenne s, and 
relief, both directly and indirectly, of the rates. After dismissingthe objections as unimportant, and shrewdly remarking that an 
experiment if successful would benefit the country, and if a failure 
would injure only Birmingham, the Committee reported in favor 
of granting the legislative facilities which Birmingham asked for. 
In the same year Mr. Chamberlain moved the following resolution 
. in the House of Commons : "That it is de irable to empower Town 
Councils of Boroughs under the Municipal Corporations Acts to 
acquire compulsorily, on payment of fair compensation, the existinginterests in the Retail Sale of Intoxicating Drink within their respectiYe 
districts; and thereafter, ifthey see fit, to carry on the trade 
for the convenience of the inhabitants; but so that no individual shall 
have any interest in or derive any profit from the sale." This remarkable 
resolution was supported by 51 members of the House, but rejected 
by a majority of 52. Amongst those voting for it was Sir 
Wilfrid Lawson, who, in the course of a long speech, said: "AlthoughI do not agree with everything in this resolution, there can be no 
doubt that it would, if passed, be the mo t deadly blow that this 
generation has seen struck at the liquor traffic a it at present exists." 
Unfortunately, since that date the House of Lords recommendations 
seem to have been forgotten. 

Reasons for Municipal Management. 
Municipal management of the retail drink traffic is the onlypossible ultimate solution. The reasons for this are so obvious that 
it is not needful to do more than name them. 

(I) The retail liquor trade is a simple one. There is, we are 
informed, no great variety of drinks to be compounded ; new inventions 
are rare and fashions change but slowly. Much of the 
stock in hand does not deteriorate but actually improves by keeping.
(2) Bad liquor is said to be largely sold, to the detriment of the 
consumer and the profit of the seller. No elective body could provide 
such liquor ! 
(3) The retail trade is strictly local and national. Temporarymi management by an unfortunately elected council could not drive 
it to foreign, or even to neighboring, competitors.
(4) The trade is already to a large extent in the hands of a few 
monopoli t5. This indicates that it i ripening for complete centralization 
in the hand of public authoritie . 

9 


(5) It has already been successfully managed by municipal or 
quasi-municipal authorities, as in Sweden and Norway.
(6) It is in England already under strict governmental control, 
and a further extension of that control is a simple matter. 
(7) It is hugely profitable, and therefore suitable for promptmunicipalization.
(8) Municipalization has special advantages in this trade above all 
others. For instance, it is clearly important that liquor retailers 
should have no interest in persuading customers to drink to excess, 
whereas a publican who depends for his living on the profits of his 
sales, is certain to encourage his customers. Salaried municipal 
salesmen would have no interest in the drink they sold, and promotion 
would be more likely to follow well-conducted houses rather 
than increased sales. 
(9) Another special advantage of municipalization of this trade 
is the destruction at once of the political power of the public-house 
and the brewers. In England this power is a serious menace. In 
America it is a hideous monster. We all know how often politics 
in the States are completely controlled by "bosses" who are nearly 
always in league with the saloons. This is not the place to describe 
their methods in detail; it is enough to refer to it as a possibility in 
England, and to note the dangerous symptoms of the disease already 
in our midst. It is fatal to the purity of politics that trade should 
dominate elections. "The Trade" always votes for itself, frankly and 
unitedly. Politics to licensed victuallers are exclusively a matter of 
licence laws and liquor duties. Pure downright self-interest alone 
determines the votes of publicans. We are a nation of shopkeepersby old repute ; but it will be an evil day when our politics are run 
by shopkeepers solely in the interest of their particular shops. The 
publican differs from most other shopkeepers in that, when he induces 
his customers to buy more than they need of his wares, the 
results are specially harmful. The public-house, too, is often the 
workman's club, and therefore its proprietor has exceptional powerto influence his votes. This much, at any rate, is certain, that it is 
high time that " The Trade" be removed from its position as to no 
small extent the arbiter of the destinies of our country. 
It is true that the present proposal does not necessarily involve the 
big brewers and distillers. But the power of" The Trade " depends 
not so much on the long purses of the beer lords as on the fact that 
every public-house is a committee room for the beer party, and everypublican an agent for the politician who favors his trade. A municipal 
barman will no longer determine his politics by his occupation, and 
will have no motive for seeking to influence the votes of his customers. 

Our Proposals. 

The experience of other countries" seems clearly to indicate that 
the following are practicable and real reforms:


(r) Determination of a ratio of licences to population, both a 
minimum and a maximum. 
*See Fabian Tract No. 85, "Liquor Licensing at Home and Abroad," by E. R. Pease. 



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(z) High licence: that is, a charge for the licence approximating, 
more or less, to its actual value. 
(3) A Representative Licensing Authority. 
(4) Municipal control. 
I.-Ratio of Licences to Population. 

The first three proposals should be enacted for the whole country 
at once. A bill should be prepared permitting not more than, say, 
one licence to every r ,ooo persons in urban, and one to boo in rural, 
districts, as proposed by the Public House Amendment Bill of 1896, 
and by the Bishop of London's bill before mentioned, and providing 
for at least one licence for, say, every s,ooo of population, or part 
thereof, in any urban licensing area, that is, in any corporate town 
or urban district. In rural districts the area should be the parish, so 
that each parish should have at least one licence."' 

The bill would require careful drafting, to make allowance for 
exceptional places, and for hotel and restaurant licences. Moreover, 
it should operate gradually. During the moratorium of five years 
the renewal or transfer of existing licences should not be refused, but 
no fresh licences should be issued if the number exceed the statutorylimit. The scandal of excessive facilities for drinking in certain 
localities is too obvious to need more than mention of the notorious 
example given by Sir William Harcourt of a street I9I yards in lengthin which, out of twenty-seven" structures," fifteen were public-houses. 
Such evils would be remedied by the reforms here proposed. 

11.-High Licence. 

In the next place, a high licence system should be introduced. 
There is every possible reason why the value of the licence should 
no longer be a free gift to the brewery shareholders. On such terms 
it is no wonder that beer barons are crowding the aristocracy out of 
the House of Lords, and that brewery and distillery stocks stand at 
three, four, and five hundred per cent. premium.t The city of 
Philadelphia received I ,9991200 dollars (say £ 4oo,ooo) for its z, I 76 
licences in I894, and Boston received I,o84,I94 dols. for the same 
year. The cry of municipal reformers is everywhere for more 
money, whilst their opponents call for, and sometimes get, relief for 
the ever-grumbling ratepayer. Here is a source of revenue ready to 
hand. The value of every public-house licence should be secured at 
once for public purposes. 

High liceuce is, under present arrangements, the barest justice.
The monopoly created by law and custom is, to use an expressiveAmerican phrase, "a valuable franchise." At present it is handed 
over for nothing to the licensee, and in effect, as a rule, to the 

*It is curious that law makers and law devisers always give a different proportion 
to urban and rural districts, but whilst American ancl Colonial practice is to allow more 
licences per population in towns, English projects would allow fewer. By the Massachusets 
law of I888, still in force, the limitation is I to every I,ooo inhabitants, exceptin Boston where it is I to every soc. 

t Guinness Common Stock has touched 6I 1 during r8g8. The nominal amount,
£I,7oo,ooo, is therefore worth about £ro,4oo,ooo. It pays 19 per cent. 


II 

brewing or distilling company. It now goes in the form of enormous 
dividends into the pockets of the beer lords and brewery 
shareholders. ~o wonder the brewing industry is probably the 
most profitable m the country. If bakers or butchers were protectedby licences from competition, and amalgamated into huge combines, 
big fortunes could as easily be made out ofthese trades at the expense 
of the consumer, and the House of Lords could speedily be filled with 
the owners of tied bakehouses or licensed butcher-shops. 

The assessment committee of each union should be ordered to 
determine the true rateable value of every public-house as a going 
concern, and also the value of the premises, as an ordinary dwelling 
house or shop. The ordinary rates should be assessed in the usual way 
on the latter. The difference, that is, the excess of annual value of the 
licensed premises over the same premises unlicensed, would clearly 
be the net annual value of the licence, and this sum should be 
payable as licence rate to the rating authority. It should, of course, 
be further enacted that the occupier could deduct such rate from his 
rent, and any contract to the contrary must, as in the case of 
income tax, be null and void. 

This scheme brings the high licence duty within the compass of 
existing law. No doubt for a time the licence rate would be inadequately 
levied. But the farmers and shopkeepers who form rural 
assessment committees-and as hereafter explained these would be 
mainly concerned-are not as a rule interested in the brewery companies 
that own the majority of the public houses, whilst they are 
interested in relieving their own rates. Difficult questions would of 
course arise, but precedent would rapidly facilitate their settlement, 
and the law courts would be the courts of appeal in this as in other 
rating problems.

An alternative method would be that usual in the United States, 
viz., raising the Justices' Licence from its present figure, a few 
shillings, to a suitable sum graduated on a regular scale. In 
Pennsylvania the scale by the law of r89o is: licences in cities of the 
first and second class, £zoo ; third class, £roo ; in other cities £6o; 
in boroughs, £3o, and in townships £rs. This law doubled the fee 
in first and second class cities, but it had no effect in reducing the 
scramble for licences.• It is clear, therefore, that these fees are 
easily paid and do not represent the monopoly value of the licence. 
This simple system no doubt has advantages, though it would work 
more irregularly than the assessment plan, and would probably leave a 
larger monopoly value in the hands of the owner of the public-house. 

"High licence prevails in Pennsylvania, and appears to be a 
success. The tone of the whole trade has been raised. The improved 
character of the saloon is remarked by all observant citizens. 
Sunday selling has ceased, and minors are usually kept out of the 
saloons. The wholesale dealers have stopped selling liquor to be 
consumed on their premises. In many places great care is taken 
not to sell to persons already visibly under the influence of liquor."t 

• The L iquor Problem, pp. 234-240. 
t The Liquor Problem, Report on Philadelphia, p. 249· 

12 

"Speak-easies," "kitchen-bars," and other characteristic American 
institutions have sprung up since the Brooks Law of 1887, but that 
is a danger we must face. Probably we shall find it easier to cope 
with such offences in England, because it is our custom to carry out 
what the law enacts. In the United States the case is otherwise, 
and under the Brooks Law in Philadelphia during the years J 893 and 
1894, fines amounting to 78,340 dols. (£15,668) were imposed, and 
the sum collected was I 6.7 5 dols. (£3· 7s.). The rule is that personsfined are let off if they swear that they really cannot afford to 
pay, and this seems to be the usual state of affairs amongst the 
Philadelphia publicans. 

IlL-Representative Licensing Authority. 

This proposal is by no means a novel one. In 1835, Lord John 
Russell included in his great Municipal Corporations Bill a clause 
which transferred the power of granting ale-house licences to the 
municipal councils. It passed the House of Commons, but was 
struck out by the House of Lords, and abandoned by the Government. 
In 1890 a similar proposal was made in regard to CountyCouncils, but it was also withdrawn.* 

We now propose that every County, Town and Urban District 
Council should in the first place be constituted the licensing authorities 
for their respective areast : that is, that the duties of the Justices in 
Brewster Sessionst should be transferred to a local representative 
body. There is no reason why any appeal against their decisions 
should be given to any other body. Each council would by this 
enactment obtain complete control over the locality of the licences 
in its district, and over their number subject to the maximum and 
minimum law. For a period of five years (or such other term as 
should be decided) they would be restrained from refusing existing 
licences except for offences, and they would have no fresh compulsory 
powers of dealing with the traffic. 

IV.-Municipal Control. 

The fourth is by far the most important of our proposals. The 
first point to determine is by no means an easy one. Are we to 
confer on Town Councils (and to save repetition that phrase must 
hereafter be interpreted as including the London County Council 
and Urban District Councils, but not other County Councils) the 
power to municipalize, or shall we create new boards elected ad hoc? 
Both courses are open to serious objection. 

On the one hand the liquor issue will too often be an all-
powerful one in determining the election of councillors. The time-
honored distinctions between Liberal and Tory, Progressive and 
Moderate, will sink out of sight. Past services will be forgotten;
promissory programs will attract no votes; elections from Perth 

• See Fabian Tract No. 85. 
t County Councils (except that of London) would of course be the authorities for 
the 
Rural Districts only. 
t See Fabian Tract No. 85. 


13 

to Plymouth will be fought on the Publicans versus the Temperance 
party ticket. Municipal gas, water, trams, sanitation, parks, police, 
and the scores of other matters which now form the business of the 
town councillors, will sometimes be abandoned to the chances of 
the fight between publican and teetotaler. 

A NEW ELECTIVE AUTHORITY UNDESIRABLE. 
Nevertheless, these evils must be faced. The alternative, the 
creation of another elective body, of a special council for dealiugwith the liquor trade, is out of the question. A licensing council 
elected by teetotalers or publicans, with no other duties, would 
often be a committee of fanatics, unaccustomed to municipal affairs, 
and the mouthpiece of a casual majority rather than the accredited 
representatives of the citizens. Men of affairs, accustomed to manage 
municipal gas and water and trams, are best fitted to conduct 
successfully the municipal drink traffic. The elaborate machinery 
of a modern municipality is ready to cope with a new department of 
corporate activity. 
And, finally, we must not further multiply elections. Already 
our frequent elections are a constant worry to the citizen who 
is concerned mainly in eaming his daily bread. The Londoner 
especially, with his Vestries and Guardians, his School Board, CountyCouncil and Parliament, has little peace from the mild persistence of 
the canvasser and the wild eloquence of the candidate. A" crisis" 
is always bursting over him, when the fate of London or the 
Empire, his children or his drains or the rates, depends upon his 
presence at the polls to support the right. And, as we sadly know, 
so to 70 per cent. of him calmly stays at home and lets the crisis 
burst and blow away unheeded. Each new electoral opportunitytends to confirm the elector in his habit of abstention; and each 
new body to be elected creates a further demand on the small 
stock of competent persons able and willing to devote their time 
to the public service. Practical politicians know only too well how 
hard it is to find fit men and women willing to come forward as 
candidates for public bodies. Our vestries and town councils already 
are burdened with members, either ornamental and negligent, or 
malignantly active because they have private ends to serve. It is a 
choice of evils; and on the whole we prefer to entrust the new 
powers to existing bodies. 

A STATUTORY CoMMITTEE SuGGESTED. 

There is, however, a way by which Town Councils could mitigatethe pressure of the liquor interests in contested elections. The 
duties of licensing and control of the drink traffic might be conferred 
(as in the Aberdeen proposal) on a Statutory Committee, composed,
like the Technical Education Board of the London County Council, 
of a certain number of councillors, together with other persons 
appointed by the Council or co-opted by the Committee itself. 
This plan would have many advantages, and would, of course, ap. 
proximate to the Gothenburg system. Future references to the 


"Council" must be understood to mean the Council, or its statutoryLiquor Law Committee. 

A Choice of Methods. 

Our plan is to allow the council a wide choice of procedure after 
the expiry of the term of notice, because it would be impossible to 
compel them to undertake the management of the liquor traffic 
against the will of the citizens. 

Subject to a general law, fixing a maximum and minimum number 
of licences, and requiring the enforcement of a high licence by fee 
or assessment, the council should be empowered to adopt one or 
other of the following plans :


(I) Private management as at present. This no doubt would be 
the usual course at first, owing to the conservatism and dislike of 
change usual in England. 
(2) Sale by auction to the highest approved bidder. 
(3) The Gothenburg system, that is, management by a semipublic 
joint stock company. 
(4) Municipal competition with private traders. 
(5) Complete municipal management.
In the first and second of the plans named the new duties .of the 
council would not be heavy : they would simply replace the Justices 
in Brewster Sessions. They would have to arrange for a reduction 
of the number of licences to the legal maximum, where this was 
necessary, and for the public sale by auction if this plan were adopted. 
It is possible that, as in Norway, this method might merge into the 
Gothenburg system, since the highest bidder for licences might be a 
philanthropic company formed for the purpose. 

• THE GoTHEKBURG SvsTEM." 
The third alternative need not detain us long, since details can 

easily be learned from one of the numerous reports of its working in 

Norway and Sweden.t 

The general lines would be the same as in those countries. The 

maximum dividend should be fixed at 4 per cent.; and all profit 

above this should be returned to the public purse. Councillors 

should have seats on the board of the company, as in Norway. The 

rates of profit to be charged should be fixed within narrow limits, in 

order to prevent prohibitive prices or undue concessions to consumers. 

MuNICIPAL MANAGEMENT. 

If the council determined to municipalize the drink traffic either 
partially or completely, they would no doubt arrange generally to take 
over existing licensed premises as going concerns. Very careful 

* There are two societies advocating the use of this system in England. The 
Public House Reform Association is an organization for influencing public opinion 
and Parliament. The People's Refreshment House Association, Broadway Chambers, 
Westminster, promotes reform independently of legislation, by acquiring, or co-operating 
with local bodies in acquiring, public-houses, with a view to their management 
on Gothenburg principles.
t See also Fabian Tract No. 85. 


J 


:> 

detailed rules must be drawn up and sanctioned by Parliament for 
the proper conduct of the business, in order to ensure that reasonable 
prices be charged and proper facilities afforded : in a word, that 
the authorities carry on a bona fide business, and make no attempt 
either to enforce practical prohibition, or to secure enormous profits 
by encouraging excess of drinking. The latter course, however, 
could offer few temptations to a body which, unlike the publicans 
and brewers, has to consider not only public opinion, but the increase 
of poor rates, police rates, and hospital rates, and the decline 
in rateable values which so shortsighted a policy would involve. 
Undoubtedly,under municipal management,gin palaces and beer shops 
will gradually be replaced by refreshment houses and restaurants. 

Of course every council should be empowered to produce its own 
beer and spirits. The municipal brewery is the natural accompaniment 
of the municipal public house. In this way a great part of 
the wholesale as well as the retail drink traffic will presently fall 
under public control and yield a revenue to the collective purse. 

Rural Districts. 

We propose to confine the powers of the County Council over 
the -liquor traffic to licensing, because the area of a county is 
too large for proper control over a scattered retail trade. But 
experience* has already shown that Parish Councils can sometimes 
manage their local liquor traffic very effectively. It would not 
perhaps be desirable that councils elected for one year, often by show 
of hands and more often still without a contest, should have uncontrolled 
power to municipalize their public houses. But the Local 
Government Board should have authority to permit any Parish 
Council to undertake the municipal supply of liquor, and to instruct 
the County Council to grant licences in any parish only to the 
Parish Council or its nominees. 

6 
The Profits. 

The problem of the disposal of the profits of high licences and of 
municipal management does not present any serious difficulty. 

In the first place all the officials of the licensing department must 
be well paid. Any other policy would be a fatal mistake. The profits 
of municipal management will be enormous, and a few hundreds 
or even thousands of pounds more or less spent in salaries in each 
town will not be noticed. The officials must be put above the 
temptation to accept the bribes which will certainly be offered them; 
and the surest way to obtain the services of men of ability and high 

*At Hill of Beath, Dunfermline (pop. r,2oo), a municipal public house, owned bythe Fife Coal Company and managed by a village committee, made £500 clear profit 
in 1896-7. (See Mr. Carlow's evidence, Royal Commission, 8 February, r8g8, especially 
Q. 49,666.) Other parishes have adopted similar plans, as Grayshott, Hants, and 
Hampton Lucy, Warwick. The Birmingham Corporation has a Village Canteen at its 
Waterworks, Elan, Radnorshire. A pamphlet entitled Popula.-Control of the Liquor 

Traffic (published by Griffith, Grosvenor-street, Chester; rd., 1896 ?), describes the last 
two. The People's Refreshment House Association (see page 14) owns several village 
public-houses, which are managed on the Gothenburg plan. 


!6 


character is to offer liberal salaries, secure tenure and retiring pensions. 
\Vith such men to organize the municipal traffic, the difficultylikely to arise is not the raising of funds for their salaries but the wise 
expenditure of the profits which their department will yield. 

A second charge would be compassionate allowances to personsdeprived of their livelihood by the closing of public houses, and any 
compensation payable as proposed in another paragraph.

The council will of course be entitled to use any part of the 
profits for capital purposes : that is, the purchase of premises for 
use as public-houses, stores, municipal breweries, etc., etc. 

For the re t, precedent happily furnishes a satisfactory solution. 
A large sum of money raised from excise is at present handed over 
to the County Councils ear-marked for technical education. The 
councils are not bound to spend it in this manner; but they are expected 
to do so. The result is that a large part of the money is so 
spent, and all legitimate demands are usually met. 

We propose, therefore, that the profits of municipal management 
and of high licences should be ear-marked for special purposes, but 
that it should be left to the discretion of the local authorities to 
spend it or not, as circumstances may decide. It would be clearly 
unwise to compel expenditure on specified objects, as in some cases 
this would certainly lead to carelessness and extravagance. The 
profits should be allocated to educational, recreative, and other purposes, 
such as parks and open spaces, museums and art galleries,
free libraries, free public hospitals under public control, scholarships 
from elementary schools, the free feeding of necessitous children in 
elementary schools, public halls, allotments, free concerts, municipalbands, municipal theatres and music halls, workmen's dwellings, and 
other such purposes. The Act should contain a full schedule of 
these, and the Local Government Board should have general power 
to approve other schemes on similar lines. 

The extreme teetotaler is said to object to the community making 
a revenue from the drink traffic. As a burgess he would not touch 
the accur ed gold ; as a taxpayer he, as a rule, is only too glad that 
36 millions a year are paid into the public purse from excise duties 
and licences. Though he clearly does not desire an increase of the 
revenue from drink by an increase in its consumption, he is forced 
by the logic of facts to favor the imposition of higher duties on 
alcoholic liquors. Certainly the teetotaller is rare who advocates 
free trade in drink because he declines to benefit as a taxpayer bythe revenue at present derived from it. And if he answer that these 
duties diminish consumption, we reply that this is one of the objectsof our municipalization and high licence proposals. Excessive consumption 
of drink is at present fostered by private profit-seekers and 
by the crowds of competing public-houses which in some districts 
tempt the incipient drunkard at every street-corner. The levyingof a high licence and the transfer of the public houses to municipal 
management would undoubtedly check such excess. The teetotaler 
who objects to the local use of funds derived from the drink traffic 
should denounce on that ground the technical education schemes of 


17 

the County Councils, and should formulate some project for ra1 mg 
otherwise the 36 millions a year at present derived from the drink 
duties. 

Compensation. 

The fate of any project for reforming the liquor law dependslargely on this question. In another Tract,'' the history of the 
subject is given, and the case against compensation fully stated. 
The Fabian Society, however, has always contended that any particular 
portion of property taken (except by taxation) for public 
purposes must be paid for by the community, and that the transfer 
of land and capital from priYate to public ownership must not be 
effected at the sole cost of the individuals in possession. Any such 
expropriation would be not unreasonably condemned as robbery,
and would, in the end, bring about reaction. 

Now it may fairly be contended that licences are an actual, though 
perhaps not a legal, property. They are reckoned as personalty bythe Inland Revenue authorities, and probate duty is charged upontheir values. That they are freely bought and sold at enormous 
prices is notorious; and the fact that in a few obscure cases renewals 
are refused by the justices, through no fault of the holder, indicates 
the theory rather than the practice of the law. It must, however, 
be remembered that th~troduction of high licence will greatlysimplify compensation by depriving public-houses of much of their 
present speculative value. 

In our view, therefore, the matter is eminently one for compromise. 
On the one hand, it is certain that no Bill which providedfor purchase of licences at the present market value could pass the 
House of Commons. On the other hand, the opposition to anyproposal involving the wholesale confiscation of licences would be 
irresistible. Both proposals would have the same practical result : 
nothing would be done. The difficulty could be partly met by providing 
a period of notice, for five or more years, during which holders 
should be guaranteed possession of their licences subject to good behavior. 
In addition, a tax might be levied on the private licenceholders 
who remain, for the benefit of those whose licences are 
extinguished; and, where the municipality takes over the whole of 
the licences, a court should have power to award equitable annuities 
payable out of the profits of the trade, to those who haye suffered 
loss by the transaction. Moreover, provision should in all cases be 
made for employees who suffer, temporarily or permanently, by loss 
of work. On some such lines as these a solution of the difficulty will 
probably be found. 

Side Issues. 

\Ve ha\·e not deait with a large number of debateable matters, 
such as Sunday closing, closing on election days, sale of liquor to 
minors, licences for clubs, hotels, etc. Our Yiew is that these are 
not matters over which local authorities should have legislative control. 
Parliament must decide upon the hours and times of opening 

* Fabian Tract No. 85. 

!8 


and closing, and the law, whatever it is, must be a general one. As 
to clubs and hotels, the difficulties connected with them are no 
doubt important, but they are by no means insuperable. It is not 
necessary here to se.t forth detailed plan!'t as to their inclusion in our 
scheme. If the broad lines of our proposal should be adopted, there 
will be no great difficulty in bringing clubs, hotels and restaurants 
within their scope. 

Conclusion. 

Our task is now at an end. vVe have condemned local optionand local veto because they would not effect the object for which 
they are designed, that is, the diminution of drinking and drunkenness, 
and because they are not designed to interfere with the privateownership of a monopoly created by law yielding enormous profits 
which are now used for the encouragement of excess and the corruption 
of politics.

We have proposed to meet this evil by transferring the value 
of licences to the public purse, and by encouraging municipal management 
of the traffic, thus destroying the power of " the Trade" 
over politics, removing the incentive to the retailers to force drink 
on unwilling consumers, and allocating the profits, not to extension 
of trade, but to such educational or recreative purposes as are likely 
to materially compete with the attractions of drink. 

We are convinced that the liquor licensing problem can only be 
solved on the lines of our proposals. 

But one thing is perfectly clear : Local Option is a plan which 
could only have been devised in the days of triumphant lazssez fazre. 
It invokes the power of the community to decide on the number of 
licences, but never dreams of allowing the community to interfere 
with the management of the business or to benefit by the profits of 
the industry. These are sacred, in the holy name of Private Enterprise. 
Only the sacrilegious hands of Mr. Chamberlain have ever 
proposed interference with them. 

No political party is likely again to court defeat over Local 
Option. All sane politicians-off the platform-admit that the teetotal 
vote is too dear at its present price. Here, then, is a projectwhich should attract all the reasonable elements of the Temperance 
party, and which should not rouse the opposition of those who 
object to "robbing the poor man of his beer." The evils of the drink 
traffic cannot be overcome by Royal Commissions and House of 
Lords Committees. Sooner or later some far-seeing statesman will 
be bold enough to face the problem, and when that day comes he 
will add to the Statute Book an Act for authorizing the Municipalization 
of Public Houses. 

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