Page:Indian Journal of Economics Volume 2.djvu/44

 8 H. BTANLEY EVON$ from time to time will reveal numerous opportunities of profitably investing further capital. 8. Natural Monopolies to be controlled by the State.--Public works and what are usually called public utility undertakings, such as gas, electricity, and water- supply, telephones, tramways and so forth, have generally the nature of natural monopolies. This arises from three special features of such works--that they.render their ervices directly to persons or property in actual contact with them, that they usually require much capital, and are immovable. In such cases competition is so exceedingly wasteful as to be almost impossible because th.e exp.ense of duplicating the cosily installation of wires, pipes, or tram lines, and so forth, is very great. ments engaged valid ground for A factory, on the other hand, produces goods which may be distributed over a wide region, and the consumers need have no physical contact with the capital instru- in production. There is, therefore, making a broad distinction between industries which are natural monopolies and those in which waste inordinately competition may of capital and great. As have free working many play without the expenditure being public utility services present opportunities of considerable profit, or at least appear t.o their promoters to do so, it has been found in many cases in England and particularly in America that companies do actually compete with one another in the same area for the supply of transport facilities by railways or the supply of electric power and light. The effects of such competition sometimes appear to be beneficial.. They are in fact beneficial to persons residing in the competitive area who get faster and better train services, low freight rates for goods, and cheap electricity. Further investigation would usually show that this result is achieved only partly by more eeonomical management and mainly either at the