406 The Water Companies: [MAY, 



an enormous machinery, which, if they sold it, would not fetch a shilling 

 in the pound upon its value, and which, therefore, they will go on working, 

 while it only pays the oil necessary to keep it in motion, rather than 

 sacrifice it altogether. 



When we talk of an application to Parliament for a new company, on 

 the ground of the " nefarious" convention, and " close monopoly" set 'up by 

 the existing ones an Act for a new company might no doubt he obtained 

 easily enough the public would suffer nothing by its formation but it 

 should be recollected, that the whole question of " division " and " mo- 

 nopoly " has been considered by Parliament already. 



And it is singular to observe, upon reference, how entirely the decision 

 of the Committee of the House of Commons affirms the cursory view that 

 we have been taking of the subject. The report of the Committee of the 

 House of Commons upon this very question the alleged combination of 

 the water companies in 1821, says: 



' The principle of the acts under which these companies were instituted, was to 

 encourage competition ; and certainly in this, as in other cases, it is only from 

 competition or the expectation of competition that a perfect security can be had 

 for good supply; but your committee are satisfied iha.t,from the peculiar nature of 

 these undertakings, the principle of competition requires to be guarded by par- 

 ticular checks and limits in its application to them ; in order to render it effec- 

 tual, without the risk of destruction to the competing parties, and thereby, ulti- 

 mately, of a serious injury to the public. 



" Competition, in ordinary cases, adjusts the supply to the demand through the 

 liberty which the sellers have to yo out of the market as well as to come into it ; 

 but in trades carried on by means of large capitals, vested in fixed machinery, and 

 furnishing a commodity of no value but for consumption on the spot, the sellers 

 are confined to the market by the nature of the trade ; and if the new comer has 

 to seek immediate employment for large works, by taking custom from the esta- 

 blished dealer, as there can be no great difference in the quality of what they sell, 

 they must vie in fewness of price, and will probably be driven to underbid each 

 other down to the point of ruin, because it is better to take any thing than to 

 take nothing for that which cannot be carried away ; and this must go on until 

 both are worn out, or one has out-lasted the others, and succeeded to a real and 

 effective monopoly, or until, by some arrangement between themselves, they can 

 put a stop to their mutual destruction. 



" These consequences appear to have followed from the late protracted compe- 

 tition between the water companies ; it was carried on, during several years, at a 

 very ruinous loss, and must, in all probability, have led to the extinction of all 

 except one or two of the wealthiest as it actually did to that of the smaller com- 

 paniesbut for an arrangement which took place, by which the supply of the 

 town was partitioned between them." 



The fact is, that the cry of monopoly is pretty absurd ; because real 

 " monopoly" there can be none. The water companies have no compul- 

 sory power upon the inhabitants of London ; it is open to any individual to 

 decline the supply furnished by them, and to provide for himself, as may 

 seem fit to his discretion. But the principle upon which the present arrange- 

 ment among the companies has proceeded, is one which nothing short of 

 bringing the government into the market as a competitor can ever get rid 

 of. The character of the trade instinctively leads to such a convention 

 it is to the interest of all parties. The people who are proposing a " new 

 company" are perfectly well aware of this. They know that, for them to 

 compete for the supply of town is impossible ; they would be doing their 

 trade at a cost twenty per cent, above other people. All that they could 

 attempt would be to oppose one or two of the existing companies, whose 



