Fighting Fire for Profit; R. Bradford

FIGHTING FIRE FOR PROFIT tg Ralp~ Bradford A GOOD friend of mine who was postmaster in a Southern city once scandalized his fellow officeholders by asserting that the Post Office Department could be run more efficiently and at less cost by a private company. Others outside the government have held the same view; and there are those who believe that many of the functions staked out for itself by government could be done better and cheaper by private enterprise. Indeed, there are certain emancipated thinkers who can take even the sacred cow of education by the horns and make a convincing case for getting the government out of education. All such doctrine is, of course, rank heresy to devoted interventionists, and even to many who are not truly interventionists, but who have been reared in the tradi tion that certain things are Hjust naturally" the function of government. Custom, habit, inertia, the pattern of accepting things as they are-all this has conditioned our thinking about such matters.

Even the man who inveighs most loudly against the inefficiencies of the Post Office Department-its anti quated methods, its failure to modernize, its delayed de223 224 RALPH BRADFORD liveries, its rising costs, its annual deficits-is not proof against the habits of a lifetime. If you suggest to him that a private corporation could probably do a better and cheaper job with the mails, he is quite apt to look at you as though he thought you were crazy. ,Certain things, in the general concept, are "just nat urally" a job for government; and if you want to retain your reputation for sanity, you'd better not go around making assertions to the contrary! For instance, if I said to you that the fire fighting function of the modern municipality could be handled cheaply and efficiently and at a profit-by private operators, what would you say in reply? Why-obviously that's the sort of service that offers no attractions or inducements to private initiative. Don't be silly. Can you imagine anybody operating a fire de partment at a profit? Or, if he did, he would have to charge exorbitant rates. That's a job that "just naturally"

falls to the munici pal government. So? But did you never hear of the Rural Fire Protec tion Company of Phoenix, Arizona? If not, here, in brief, is its story-a story of private enterprise operating profit ably and efficiently in "government territory"; a story of fire fighting for a fee-and, of course, a story about a thing that just naturally couldn't be done. Like most successful enterprises, it began with and centers about a man. His name is Louis Witzeman. He is a former newspaperman who bought a house about ten years ago ina suburb out on the desert north of Phoenix -"out on the desert" being localese for any spot outside FIGHTING FIRE FOR PROFIT 225 the big irrigation ditch that goes around the four sides of the city proper. But when Witzeman moved in, he found that he was without municipal fire protection because his suburb was outside the city limits. His neighbors, of course, were in the same fix-and so he began to do some thinking. An idea took form, and he discussed it with a few people around the community.

The idea was that of a privately owned and operated fire department with Mr. Witzeman as the entrepreneur! Crazy? Of course! Any fire department official could tell you that fire fighting is no proper job for private enter prise. It is altogether too risky. The equipment is ex pensive and complicated. The occupation is highly haz ardous. Nobody could expect to carryon such a "busi ness" except at a loss. Emphatically, it was a thing that just couldn't be done. Incidentally, I asked .Louis Witzeman if anybody told him that when he was getting started. He replied: "Yes, they said it couldn't be done-and they were almost right!" So there were problems-just as there would have been if he had been starting a lumberyard or a printing shop; but in this case the problems were aggravated by the inertia of popular thinking. Nobody would have assumed that a lumberyard or a printing shop could be operated better by the government. But fighting fire-that was different!

I asked Mr. Witzeman what the most difficult problems were and he started off (as' was to have been expected) 226 RALPH BRADFORD with: "Finances"-and he added: "We only had $1,600." Not much of a shoestring on which to launch a business that was doomed to failure anywayl The Customers Were Reluctant But he persisted. His plan was simple. Instead of tax ing themselves to create and support a fire department, the householders in his area would contract to pay him a monthly fee or retainer, in return for which he would undertake to 'give them adequate fire protection. Simple-yes; but it took some doing. "It was an educa tional program," Witzeman told me. "People had never heard of a private fire department and were leery of signing up. Some also thought of it as a racket." In spite of all this, he succeeded in selling $10,000 worth of contracts in advance, putting the funds so raised in .escrow with a 'bank-an achievement which, measured against the sales resistance encountered, must be a record of some sort. To' be sure, the people had no fire protec tion and he was offering them something in place of nothing; still and-all, it wasn't a proper field for private initiative; and it probably couldn't be done! But finally it wa~ done, and a new type of "business" was on its way -to possible success in the view of a hopeful few, to al most.certain failure in the judgment of most people.

But the rejoicing was not universal. Since this subur ban fire fighting effort would probably reduce the fire hazard for the city proper, as well as in the semi-rural area covered, one' w()'Uld have expected the city officials FIGHTING FIRE FOR PROFIT 227 of Phoenix to be happy that Witzeman had set up in business. I said as much to him, and asked him if my assumption were correct. His reply: "Like hell they were! Yon see, we slowed down their annexation program. Now however," he added, "we work for them. They hired us to take care of their recent an nexations because our insurance rate reduction was fa vorable, and interim protection was needed until they could set up their own services." The new venture started out in 1948 with a fire station and one truck; but if you are envisioning a continued small-time operation or makeshift equipment, you couldn't be more wrong. In ten years it has grown to a four-station, eleven-truck fire department; and they are now in process of building a new, central station for eight trucks. It is equipped with modern, high-pressure fog fire trucks, and boasts that it was one of the first nonmilitary departments in the state to use this kind of equipment. Only the municipal departments of Phoenix and Tucson now exceed the Rural Fire Protection Com pany in size and equipment. It now has trucks, real estate, buildings, and miscellaneous assets which Mr.

Witzeman estimates are worth in the neighborhood of $300,000, and he adds that they are almost all. paid for. The company has twenty full-time employees and em ploys twenty others on a part-time basis. There are ten who work nights or "per fire" only. In the Witzeman parlance, these latter are "sleepers." The full-time fire fighters are well trained and equipped with· the latest paraphernalia for efficiency and safety. At its headquar ...

228 RALPH BRADFORD ters the company has complete, living quarters for the fighters, an office, an alarm desk, and its own three-way radio network. It serves subscribers on an annual fee basis. As this is written, I do not have the figures for 1957, but in 1956 the company responded to 1,229 alarms. The value of the property involved in these fires was nearly $8,000,000. The actual loss of property for that year is reported as $636,000, or approximately 8 per cent, which means that about 92 per cent of the property was saved. As a layman, I know little of the meaning of such statis tics, but I am told that they rate very high in the experi ence of fire departments. What Does It G-ost? The question that interests everybody, of course, is, "What does it cost?" For the special information of those who are accustomed to measure the cost of public services in terms of government-subsidized electric utilities, where taxes and other normal cost items are often disregarded, I asked Mr. Witzeman about the cost of his service per subscriber, as compared with the cost in taxes per citizen of the average muncipal fire department. His reply will surprise many people, especially those who think that a private company rendering a public service will "just naturally" charge more than a government-owned fa ciIity will charge.

"Our per-capita cost," he said, "is lower than any in the state that is recognized by the board of fire underFIGHTING FIRE FOR PROFIT 229 writers." And he added: "Our insurance reduction is equal to the lowest nonmunicipal reduction west of the Mississippi." Now it is not the purpose of these paragraphs to urge ambitious young men to start private fire departments in a field that is already largely pre-empted by municipal monopoly. The point of this article is that a man in Ari zona has demonstrated a thing that is too often lost sight of in a generation dominated by the philosophy of super governmental ism. It is this: That no field of human activity or service is reserved by either logic or necessity for the hand of government alone. He has shown· that when government monopoly does not exist, even the specialized and somewhat risky job of fighting fires can be handled cheaply, efficiently, and with profit by private endeavor!.

Certainly his experience should give pause to those who assume that certain economic functions are "just nat urally" or properly governmental in character. That as sumption was made long ago about the handling and delivery of our mails. As a result, that assumption is pretty generally accepted. But if a contrary assumption had been made at the beginning, today we should have one or more corporations handling themails.using the latest machinery, paying taxes, earning dividends, and al most certainly giving better and cheaper service than we get from our state-operated mail service. If this appears to you as a far-fetched assumption, take 1 See also, "Fighting Fires Privately" by F. A. Harper, page 218 of this volume.

230 RALPH BRADFORD the case of the telephone. Here is a service that is one of the modern marvels, developed entirely without gov ernment aid and operating a nationwide and complicated network. It is seldom th(l.t one hears a word of criticism of either rates or service. But suppose Alexander Graham Bell had been told that only the government could de velop the telephone properly. After all, it is a form of communication, just as the mails are. If that decision had been made, today we should have a state-owned tele phone system-and most people would be assuming that it was "just naturally" a proper sphere for gov~rnmental rather than private operation. But does anyone think we should have a better service? If so, let him pay a visit to the nearest post officeand take a look at the way it is run-or let him compute the length of time it requires to transmit a letter from Washington to New York!

And what about aviation? If the Wright Brothers and the other pioneers had believed that the utterly new, difficult, and extremely hazardous adventure of conquer ing the skies was "just naturally" a job for the govern ment, and if the State had taken over at that time, we should today be riding in state-operated airplanes-and most people would be assuming that aviation was not a proper field for private enterprise. But does anyone dream that the equipment and service would be better? If so, let him take a ride on a govern ment-owned train in England or France or Argentina. Fire fighting, after all, despite its occasional hazards, is relatively simple when compared with the vast intricacies FIGHTING FIRE FOR PROFIT 231 of the airplane and the telephone, or with the electronic wizardry of radio and television. If these could reach their present stages of efficiency and near-perfection un der private skill and initiative, can anyone doubt that fire fighting would have fared equally well?

If anyone does have such doubts, let him visit the Rural Fire Protection Company of Phoenix and see what private initiative has accomplished. And what was the motivation for that enterprise? Did Louis Witteman start his company to prove an economic principle or teach a lesson in freedom? Certainly not. He set out to .do a needed job for his suburban area-a job that· he believed could be made serviceable for his neighbors and' beneficial for himself. But in the process of succeeding, he has demonstrated' the inexhaustible vitality of human enterprise and in genuity when left free to operate untrammeled and un coerced. Concerning the limitless ability of man to invent and achieve we never need to have any.doubt, because all about us on every hand we find the evidence to sup port this faith.