Month: April 2010

regulating theater in eighteenth-century Paris

In pre-Revolutionary France, the French king awarded theater-process patents to particular theater companies.  The Académie d’Opéra, founded in 1669, received letters patent giving it exclusive rights to present to the public works with texts that were sung or danced.  The Comédie-Française, which incorporated Molière’s acting company, received the exclusive right to present drama in verse.  The Comédie-Italienne, a troupe of Italian actors, held rights to Italian comic opera and the commedia dell’arte. Of course, just like U.S. communications companies argue over the boundaries between telecommunications and information services, Old-Regime French theater companies argued over the types of singing and dancing each had the legal right to do.

These three major Parisian theater companies found common ground in seeking to suppress theatrical entrepreneurs that built theatrical businesses within the annual Parisian trade fairs.  These trade fairs occurred at the St-Germain abbey in the Latin Quarter (late winter and early spring) and at the St-Laurent abbey on the right bank of the Seine (late summer and early fall).  The trade fairs were special trade zones within which many normal guild regulations and commercial privileges did not apply.  Trade-fair theaters developed performances that served popular tastes and were quite successful.  Concerned in part about audience losses, the major theater companies asserted their privileges over the trade-fair theaters.  The trade-fair theaters responded with a variety of jurisdictional arguments and clever legal forum-shopping.  These tactics gained the trade-fair theaters years of business, but ultimately the superior legal-political power of the major theaters prevailed.

The trade-fair theaters also responded with successful business innovations.  For example, Parlement in 1707  forbid the performance of any “play, colloquy, or dialogue” in French at the fairs.  The order did not explicitly forbid monologues, interpreted as having only one speaking actor on the stage at a time. Hence fair performances had actors alternately run on and off the stage to speak their lines, or had one actor on stage and another actor speaking from off stage. When the actors were forbidden to sing, stage assistants held up placards with written verse.  With the aid of these prompts, actors planted in the audience got the audience to sing the songs that accompanied the performance. To skirt the category of play, some fair theaters offered productions with three acts rather than the classically inspired standard of five acts.

More dramatic freedom came with the French Revolution.  The Théâtre des Délassements-Comiques, founded in 1785, was soon restricted to performing pantomimes, with no more than three actors on stage, and a gauze curtain hung between the stage and the audience so that the audience could see the stage action only obscurely.  In 1789, after the fall of the Bastille, the theater director Plancher-Valcour reportedly tore down the veil and declared, “Long Live Liberty!”

Liberty lives long only with politically engaged citizens, good law, and innovative persons and organizations.

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Sources:

Isherwood, Robert M. 1986. Farce and fantasy: popular entertainment in eighteenth-century Paris. New York: Oxford University Press (Ch. 4).

Ravel, Jeffrey S. 1999.  The contested parterre: public theater and French political culture, 1680-1791. Ithaca: Cornell University Press (Ch. 3).

Hemmings, Frederick William John. 1994. Theatre and State in France: 1760-1905. Cambridge: Cambridge university press (Ch. 4).

rationality in public discourse

In my post on real-world public reasoning, I discussed the reception of Brian Kalt’s law review articles on prosecuting murder and other crimes in the fifty-square-mile Idaho portion of Yellowstone National Park.  Prof. Kalt responded with an email to me.  Since this was before my email and telephone policy statement, I will not post his email, which was gracious and intellectually substantive.  I responded with the email below. He in turn responded with further discussion of the issues.  He noted, “Now that I understand what you were saying more, I am satisfied that all the response I could reasonably ask for is contained in the one comment already posted by Mr. Havens.”  He also wrote, “I guess I prefer the ‘nothing’ approach, but not because I feel unfairly treated.”

I have decided to post my own email regarding this matter because I don’t believe that doing so is unfair to Prof. Kalt and because I believe in the importance of courteous public discussion of scholarly issues.

*  *  *  *  *

Prof. Kalt,

Thanks for taking the time to respond.  On your sixth point, I do not think that all your work, or all the work of law professors generally, is useless.  In particular, your article “The Exclusion of Felons from Jury Service” strikes me as intellectual impressive, publicly important, and quite useful for anyone thinking about public position of ex-prisoners.  I wish “The Exclusion of Felons from Jury Service” had attracted as much attention as “The Perfect Crime.”

Both “The Perfect Crime” and “Tabloid Constitutional” were fun to read.  I’m in favor of having fun and even manage occasionally to have some fun in writing.  See, e.g. https://www.purplemotes.net/2008/08/17/televisions-moving-into-the-toilet/ Having fun makes the world a better place.  I wish more law professors would have fun doing legal work and would share their fun with the world. In this sense,  you’re a great leader for your profession.

My post sought to analyze both attention to the legal issue you discovered and attention to your work concerning that issue.  You put forward a lesson, with a tone of righteous earnestness, about the marketplace of ideas.  I think the lesson you claimed to have learned misses key points of how the marketplace of ideas actually works.

But the point of this correspondence is fairness, not differing analysis or arguments about those issues.  I’ll briefly try to convince you that what you feel is unfair really isn’t unfair.  I hope to dissipate your feelings of unfairness. If you decide that I’ve failed, I would be happy to post on my blog the response you sent me, or a revised response if you want to create one, followed by my response.  Alternatively, if you would prefer not to have any public evidence that you noticed my comments (this seems to be a favored approach among persons who consider a commenter to be someone not relevant to their professional standing or beneath them), I’m willing to add to the original post an addendum that might lessen your feelings of unfairness without documenting that you expressed such feelings.

Your points four and five raise issues of fairness.  With regard to point four, you state that you were sincerely concerned that your law journal article could cause someone to be killed.  You also state that you attempted to avoid that bad outcome by notifying the authorities several months before it was published.  As you now recognize, your response to your concern was totally ineffectual.  I credited you with discovering a formal basis for making a sensational claim rather than accused you of extremely poor practical judgment.  I hope that you consider my choice to be fair.

You also state that you did not seek the attention that arose after you posted your paper on SSRN and that my extrapolation that you were competing for attention is unfair.  Please recognize that I am a communications industry economist.  Seeking attention and competing for attention are general, normal types of behavior in communication fields.  Competition for attention is an important economic structure in the legal academy.  To the extant that you want to acknowledge participating in it, competing for attention is not a personal failing for you as a law professor.  I have some sense that academics prefer not to acknowledge among themselves certain obvious aspects of their profession.  But I hope you consider it fair for a communications industry economist to recognize competition for attention.

With regard to point five, you state that it was “a bit unfair” for me to have written, “But surely for a law professor, the crowning moment must have been having a second article concerning the Yellowstone-Idaho crime problem accepted for publication in the Georgetown Law Journal.”  That sentence followed quotation of your statement, “The crowning moment, though, was the article in the /National Enquirer/.”  I interpreted your statement as having been written with some genial irony.  I see no reason that you cannot,  with a big smile, tell your fellow law profs that you had two articles on the Yellowstone-Idaho crime problem published in the Georgetown Law Journal.  Just as with mention in the National Enquirer, your fellow profs might laugh and be secretly envious.  I think it’s fair for you to do that.  Isn’t it fair for me to have written it?

If the above hasn’t dissipated your feelings of unfairness, feel free to send me some statement that you would like to have posted on my blog. I will not edit your statement without your permission and your approval of any editing.  Alternatively, I would be happy to add an addendum to the original post.  The addendum would make these points:  1) “The Perfect Crime” and “Tabloid Constitutionalism” are fun to read, having fun is good, and that the author should be commended for adding to the world’s fun; 2) The article “The Exclusion of Felons from Jury Service” is intellectually impressive, useful work, and, together with the author’s other articles, demonstrates the value of a variety of ways of doing legal scholarship, 3) Texts are often designed to attract the attention of readers.  While such a design may be difficult to discern in many law journal articles, law professors generally seek to attract attention to their work.  Seeking attention and competing for attention is not a personal moral failing of any particular law professor, and nothing in the above post should be construed to imply such therewith.

Please let me know if any of the above possibilities satisfy you.  Doing absolutely nothing is also another possibility.  I’m familiar with that approach, and I also would be happy to adopt it in these circumstances.

Sincerely,
Douglas Galbi

[email sent on Aug. 27, 2008; I have added embedded hyperlinks to Andy Haven’s comment and to Prof. Kalt’s papers.]

government takeover of all telephone systems

On July 22, 1918, the U.S. government declared that it was taking possession and control of all U.S. telegraph and telephone systems:

I, Woodrow Wilson, President of the United States, … do hereby take possession and assume control and supervision of each and every telegraph and telephone system, and every part thereof, within the jurisdiction of the United States, including all equipment thereof and appurtenances thereto whatsoever and all materials and supplies.[1]

The U.S. had entered World War I in April, 1917, and in December, 1917, the U.S. government took over the railroads.[2]  Railroad operations depended heavily on the telegraph system.  However, neither this dependency, nor any other specific wartime need, clearly justified taking over all telephone systems.  Upon taking possession and control of telephone and telegraph systems, the Postmaster General declared that every effort would be directed to improving service to the public.[3]

Government ownership of the U.S. telephone system was widely and vigorously debated prior to World War I.  Leading U.S. advocates of government ownership argued for comprehensive government control of all means of communication.  For example, a 1913 report to the U.S. Senate, prepared under the direction of the U.S. Postmaster General, declared:

The founders of this nation were keenly alive to the importance of keeping exclusively under Government control all means of communication, and therefore provided in the Constitution that “the Congress shall have the power * * * to establish post office and post roads.”

The framers of the Constitution probably never dreamed of postage stamps, railway postal cars, canceling machines, pneumatic tubes [used for delivering mail in Manhattan], telegraphs, telephones, aeroplanes, and radio equipment.  They specified nothing concerning means of transportation or methods of distribution, but wisely left to future generations a broad provision under which they would have the right to avail themselves of such improved means of communication as might be discovered and developed.  It was clearly their intention that the Government should control all means for the transmission of intelligence.

[We recommend] That Congress declare a Government monopoly over all telegraph, telephone, and radio communication and such other means for the transmission of intelligence as may hereafter develop.[4]

Freedom of the press was a central issue in the founding of the U.S.  The founding fathers wrote freedom of the press into the first amendment to the U.S. Constitution.  How could freedom of the press be reconciled with government control over all means of transmission of intelligence?

The press seems to have been in a different conceptual category from other means of communication.  Print undoubtedly was a means for the transmission of intelligence.  The educational use of books, the construction of libraries, and the circulation of newspapers and magazines were publicly prominent uses of print for the transmission of intelligence.  A U.S. government monopoly over the printing press would have been inconceivable. This political reality apparently was so obvious that it didn’t need to be considered in arguing for government control of all means of communication.

The proclamation of government possession and control deprived telephone companies of important aspects of legal due process, but affected little their practical freedom.  The government formally took over about 53,000 telephone companies.[5]  Exercising systematic, useful government control over all these companies would have required a large government organization with expertise in running telephone companies.  Since the government had no such organization, the Postmaster General declared upon assuming formal control:

Until further notice the telegraph and telephone companies shall continue operation in the ordinary course of business through regular channels.  Regular dividends heretofore declared and maturing interest on bonds, debentures, and other obligations may be paid in due course, and the companies may renew or extend their maturing obligations unless otherwise ordered by the Postmaster General.  All officers, operators, and employees of the telegraph and telephone companies will continue in the performance of their present duties, reporting to the same officers as heretofore and on the same terms of employment.[6]

An order directed to mutual telephone companies on November 18, 1918, underscored the government’s discretionary power:

Until otherwise ordered by the Postmaster General, any firm, company, or association, whether incorporated or unincorporated, owning or operating telephone systems, system, or part of a system as a cooperative enterprise and receiving no revenue either directly or indirectly from any source other than from its own partners, stockholders, or members as assessments or dues, shall not be required to comply with the orders of the Postmaster General[7]

This order did not return the relevant telephone companies to the prior regime of legal due process under which they had operated. The order merely specified more finely the address of Postmaster General orders.  With the proclamation of government possession and control, the government could legally direct ad hoc orders to specific companies.  In fact, Postmaster General orders discriminated against Clarence Mackay’s Postal-Telegraph and Commercial Cable system.  The Postmaster General described Mackay’s company as a “parasite” and transferred its operational control from Mackay to his commercial rivals.[8]

Under government control, telephone companies received rate increases that would have been difficult for them to achieve as private companies.  To control customer churn, the Bell System had been seeking for years to introduce a telephone service connection charge.  Because such a charge legally was an intrastate charge, state-level regulatory agencies needed to approve it.  Federal government control of all telephone systems allowed the federal government to enact the telephone service connection charge.  In an order issued only about a month after taking control of telephone systems, the Postmaster General established a service connection charge across the U.S.[9]

Subsequent government orders raised a variety of telephone rates more quickly than than they would have risen otherwise.  Regulated companies typically suffer during general price inflation because regulated prices tend to change less rapidly than other prices. U.S. consumer price inflation from mid-year 1917 to mid-year 1919 was equivalent to 17% per year.[10]  A Postmaster General order raised long-distance rates about 20% effective January 21, 1919.  On March 19, 1919, the Postmaster General approved a “comprehensive scheme of changes in the local exchange rates” in the Bell System.  The scheme increased Bell System local telephone revenue by about 14%.[11] Achieving such rate increases across all states would have required from the Bell System a huge regulatory effort.  The Postmaster General enacted these increases for the Bell System relatively easily.

In addition to enacting rate increases for telephone companies, the government also paid them compensation for deficits incurred under federal control.  The Bell System received $9.2 million in compensation from the government.  That amounted to 13% of its 1919 total income excluding compensation.  Another $5.2 million was allocated to compensation for other telephone and telegraph companies.[12]  In setting up these compensation contracts, the government essentially insured the telephone companies against financial losses.

The U.S. government’s takeover of all telephone systems worked out quite well for telephone companies.  The managers of telephone companies retained effective control of the companies. In addition, telco managers gained the powerful tool of federal wartime authority to raise telephone rates, including intrastate rates.  Telco stockholders and bondholders got a government insured financial return from the government takeover. The historical record doesn’t clearly indicate whether AT&T supported the government takeover.  But sources with widely divergent biases agree: the government takeover benefited AT&T.[13]

The U.S. government’s takeover worked out quite badly for the government.  The rate increases generated vehement public criticism:

This [rate increases] created a furor throughout the country, in and out of Congress, among both Republicans and Democrats, seldom equaled in intensity and bitterness.  The Republicans charged inefficiency, and Democratic Senators decried Burleson’s [Postmaster General Albert S. Burleson’s] “grasping” and “domineering” methods.[14]

The government’s management of labor issues infuriated organized labor. Labor leaders accused Postmaster General Burleson of “introducing into public office the traditional labor policy of the antebellum Southern plantation.”  Samuel Gompers, the President of the American Federation of Labor, declare that the Postmaster General “needs only a wider field and a better opportunity to fit him for succession to some of the world’s best known but unlamented ex-dictators.”[15]  The initial refusal of telegram companies to carry a New York World article sharply criticizing the Postmaster General became a proof-text for expressing concerns about government censorship.  The Postmaster General had expected government control of the telephone companies to last at least three years.  But by mid-1919, public support for government ownership of the telephone system had largely evaporated.  The government relinquished possession and control of all telephone companies as of August 1, 1919.[16]

Despite having a broad factual basis, public debate over government ownership of the telephone early in the twentieth century didn’t produce intelligent public policy.  Public debate consistently under-appreciated the extent to which telephone service developed through the growth of both publicly owned and privately owned telephone systems.  The exceptional growth of telephone service in the U.S. through competition among non-government telephone companies also was under-appreciated.  Complicated international comparisons of rates and operational efficiency generated more discussion than simple comparisons of telephone prevalence.[17]  Ultimately, the government took control of all telegraph and telephone companies under a conceptually bizarre ideology and without clear operational goals.

Democracy worked through experience.  Taking possession and control of all U.S. telephone systems in 1918 did not work out well politically for government officials.  After a year of government control, all U.S. telephone systems were returned to their non-government owners.  The U.S. experiment in government control of the telephone system could have failed much worse.

hand raised in space

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Notes:

[1] Presidential Proclamation, 40 Stat. 1807, July 22, 1918, effective Aug. 1, 1918, reprinted in U.S. Post Office (1921) pp. 45-7.

[2] The order taking over the railroads was Presidential Proclamation, 40 Stat. 1733, Dec. 26., 1917, effective Dec. 28, 1917.

[3] The Postmaster General’s public statement is reprinted in U.S. Post Office (1921), p. 47.  It declares:

Under the President’s order conditions are changed and greater opportunity is afforded to effect improvements and economies and a larger use by the people of these facilities which have become an imperative need in their everyday life.  Whether advantage can be taken of these opportunities to improve this service to the public remains to be disclosed by experience.  Every effort of the department will be directed to the accomplishment of this end.  It will be the purpose of the Post Office Department to broaden the use of the service at the least cost to the people, keeping in mind that a high standard of efficiency must be maintained.

Just as was true for the telephone systems, war requirements did not clearly justify government takeover of all telegraph systems.  See May (1989) pp. 1, 27-45.

[4] U.S. Post Office (1913) pp. 7, 13. In testimony to Congress on July 2, 1918, Joseph Daniels, Secretary of the Navy, also urged permanent government ownership and control of all means of communication:

I would have the Government control and own telegraph, telephone, and all means of communication permanently. … I say communication ought to be a Government monopoly, both for the security of secrecy in war and continuous operation, and for the control of communication. It is just as important for the Government to control communication by telephone and telegraph as it is by mail.

See Federal Control of Systems of Communications, Hearing Before Committee on Interstate and Foreign Commerce, House of Representatives, July 2, 1918, p. 27.  Danielian (1939) pp. 244-6 quotes these views with apparent approval.  The British government takeover of the British telephone system in 1912 spurred interest in the U.S. in taking similar action. Here’s a discussion of U.S. federal regulation of radio communications.  For evidence of the scope of the debate over government ownership, see Judson (1914).

[5] The government seems not to have clearly known how many telephone companies it took over. U.S. Post Office (1921) p. 7 indicates that 981 telephone companies had annual operating revenues of $10,000 or more.  The Census of Telephones for 1917 (published in 1920) showed 1118 such companies.

[6] Public Statement of Postmaster General, July 23, 1918, reprinted in U.S. Post Office (1921) p. 47.

[7] “Release of Mutual Telephone Systems,” Postmaster General Order No. 2411, Nov. 18, 1918, reprinted in U.S. Post Office (1921) p. 52. Arguments for government ownership stressed advantages of scale and of having a unified system.  These arguments applied with greater force to the many small telephone companies that the government first pushed out of its attention.

[8] See May (1989) pp. 46-8.  Mackay’s company focused on major markets.  That business focus today might be disparaged as “cream-skimming”.

[9] “Service Connection Charges,” Order No. 1931, Aug. 28, 1918, in U.S. Post Office (1921) p. 64.  Subsequently, Bulletin No. 8, “Service Connection Charges,” Sept. 14, 1918, clarified the service connection charges, and Bulletin No. 15, “Modified Service Connection Charges,” Nov. 18, 1918, modified the service connection charges. See id. pp. 65, 68-70.

[10] Change in consumer price index for urban consumers, not seasonally adjusted, July 1917 to July1919, equivalent annual growth rate.

[11] Bulletin No. 22, “Toll Rate Schedule,” Dec. 13, 1918, in U.S. Post Office (1921) pp. 75-81.  See also Order No. 2797, “Amendment of Toll Rate Schedule,” Feb. 17, 1919, id. pp. 83.84 .  Toll (long-distance) percent increase from Danielian (1939) p. 256.  May (1989), p. 45, describes the rate increase as “18 to 20 percent.”  U.S. Post Office (1921) doesn’t include the orders raising local rates.  AT&T described the total rate increases as amounting to $40 million, or approximately 12% of revenue. The toll rate increase totaled $10 million.  See Danielian (1939) pp. 256, 264.  Total local-exchange revenue was about twice toll revenue.  See AT&T Annual Report, 1919, p. 40. These figures imply, on a revenue-weighted basis, a 14% increase in local rates and a 9% increase in toll rates. State regulators appealed the federally ordered changes in intrastate rates and succeeded in getting state courts in 11 states to block some of the rate increases.  Under the interpretation of the Commerce Clause in 1918-1919, the Federal government’s normal authority to regulate intrastate telephone rates was not clear.  But the Supreme Court did not apply judicial review to federal government actions in time of war. The U.S. signed the Armistice ending World War I on Nov. 11, 1918. A legal issue was whether intrastate telephone rate increases enacted after the Armistice were a valid exercise of federal war power. In Dakota Cent. Telephone Co. v. South Dakota, 250 U.S. 163 (decided June 2, 1919), the Supreme Court ruled that the federal action was valid.  Hence the rate increases went into effect across the appealing states.

[12] Compensation amounts for a number of companies, including AT&T, are listed in U.S. Post Office (1921), pp. 21-22. AT&T annual income for 1919 is from AT&T Annual Report, 1919, p. 39.

[13] See, e.g. Danielian (1939), pp. 243-44, 265-70 (“The undertaking [government control] was highly successful from the companies’ point of view, if not the public’s. … The Bell System benefited handsomely”) and Coon (1939) p. 151-4 (“the results of Federal control must have been very gratifying to them [Bell officials]”).

[14] Danielian (1939) p. 269.

[15] Quotations from May (1989) p. 50, apparently from newspaper reports.

[16] Id. pp. 50-4 (regarding censorship).  U.S. Post Office (1921) p. 10 noted:

When these properties were taken over on August 1, 1918, it was generally assumed that they would be in the possession of the Government for at least three years, one additional year of war, one year before the proclamation ot peace, and one year allowed for adjustment and settlement should Congress at the close of the war require the return of the properties.

The conditional phrasing “should Congress…require the return of the properties” hints at hopes for permanent government control.

[17] See “Postalization of the Telephone,” testimony of Rep. David J. Lewis to the House of Representative’s Committee of Post Office and Post Roads, Jan. 15, 1915, and AT&T, “Government and Private Telegraph and Telephone Utilities: an Analysis,” excerpted in  Judson (1914) pp. 129-56.  International comparisons of telephone rates and telephone company efficiency are quite complicated, but international comparisons of teledensity are simple and quite telling.  Neither AT&T and supporters of non-government telephone systems nor supporters of government ownership had much regard for the value of competition.

References:

Coon, Horace. 1939.  American tel & tel; the story of the great monopoly. New York: Longmans, Green and Co.

Danielian, Noobar R. 1974 / 1939.  A.T. & T.: the story of industrial conquest. New York: Arno Press.

Judson, Katharine B., compiler.  1914.  Selected Articles on Government Ownership of Telegraph and Telephone.  Debaters’ Handbook Series.  White Plains, N. Y.: The H. W. Wilson Co.

May, Christopher N. 1989.  In the Name of War: Judicial Review and the War Powers since 1918. Cambridge: Harvard University Press,

U.S. Post Office. 1913.  Government Ownership of Electrical Means of Communication, Report to the Postmaster General by a Special Committee of the Post Office Department, Nov. 25, 1913, sent to the President of the Senate, Jan. 31, 1914. Washington: Government Printing Office.

U.S. Post Office. 1921.  Government Control and Operation of Telegraph, Telephone and Marine Cable Systems, August 1, 1918, to July 31, 1919.  Washington: Government Printing Office.