Note 95 — THE TRANSITION TO SOCIAL DEMOCRACY.

Such capitulations occur already when the Chancellor of the Exchequer takes advantage of the fall in the current rate of interest (explained on page 20) to reduce Consols. This he does by simply threatening to pay off the stockholders with money freshly borrowed at the current rate. They, knowing that they could not reinvest the money on any better terms than the reduced ones offered by the Chancellor, have to submit. There is no reason why the municipalities should not secure the same advantages for their constituents. For example, the inhabitants of London now pay the shareholders of the gas companies a million and a half annually, or 11 per cent on the £13,650,000 which the gas works cost. The London County Council could raise that sum for about £400,000 a year. By threatening to do this and start municipal gas works, it could obviously compel the shareholders to hand over their works for £400,000 a year, and sacrifice the extra 8 per cent now enjoyed by them. The saving to the citizens of London would be £1,000,000 a year, sufficient to defray the net cost of the London School Board. Metropolitan readers will find a number of cognate instances in Fabian Tract No. 8, “Facts for Londoners.”