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A Memorandum just issued by that active body, the Sanitary Association, contains the following amusing and instructive account of the memorable competition between the great London water-companies forty years ago, and of the close monopoly in which that reckless and ruinous struggle ended:—

'In 1810, a water mania, like our recent railway mania, suddenly broke out; and the principle of competition, to which the legislature had all along looked for the protection of the public, was put upon its trial. Two powerful companies, which had been several years occupied in obtaining their acts and setting up their machinery, now took the field—one, the West Middlesex, attacking the old monopolists on their western flank; the other, the East London, invading their territory from the opposite quarter. At the same time, a band of dashing Manchester speculators started the Grand Junction Company with a flaming prospectus, and boldly flung their pipes into the very thick of the tangled net-work which now spread in every direction beneath the pavement of the hotly-contested streets.

'These Grand-Junction men quite astonished the town by the magnificence of their promises. "Copious streams" of water, derived, by the medium of the Grand Junction Canal, from the rivers Colne and Brent: "always pure and fresh, because always coming in"—"high service, free of extra charge;" above all, "unintermittent supply, so that customers may do without cisterns;" such were a few of the seductive allurements held out by these interlopers to tempt deserters from the enemy's camp.

'The West Middlesex Company, in its opening circulars, also promised "unlimited supplies" to the very "housetops," of water "clear and bright from the gravelly bottom of the Thames, thirteen miles above London Bridge." The East London was not behindhand with the trumpet; and its "skilful" directors, by paying dividends in rapid succession out of capital, raised their L.100 shares to the enormous premium of L.130 before they had well got their machinery into play. Meanwhile the South London (or Vauxhall) Company was started—in 1805—on the other side of the river, with a view to wrest from its old rulers the watery dominion of the south. The war was not, however, carried on in a very royal sort; for, as the travelling mountebank drives six-in-hand through a country town to entice the gaping provincials to his booth, so these water-jugglers went round the streets of London, throwing up rival jets-d'eau from their mains, to prove the alleged superiority of their engines, and to captivate the fancy of hesitating customers.

'The New River Company, thus put upon its mettle, boldly took up the gauntlet. It erected new forcing-engines, changed its remaining wooden pipes for iron, more than doubled its consumption of coal, reduced its charges, augmented its supplies, issued a contemptuous rejoinder to its adversaries, and, appealing as an "old servant" to the public for support, engaged in a war of extermination.

'For seven years, the battle raged incessantly. The combatants sought—and openly avowed it—not their own profit, but their rivals' ruin. Tenants were taken on almost any terms. Plumbers were bribed to tout, like omnibus cads, for custom. Such was the rage for mere numerical conquest, that a line of pipes would be often driven down a long street, to serve one new customer at the end. Arrears remained uncollected, lest offence should be given and influence impaired. Capricious tenants amused themselves by changing from one main to another, as they might taste this or that tap of beer. The more credulous citizens, relying on the good faith of the "public servants"—as these once powerful water-lords now humbly called themselves—were simpletons enough, on the strength of their promises, to abandon their wells, to sell off their force-pumps, and to erect water-closets or baths in the upper storeys of their houses. In many streets, there were three lines of pipes laid down, involving triple leakage, triple interest on capital, triple administrative charges, triple pumping and storage costs, and a triple army of turncocks—the whole affording a less effective supply than would have resulted from a single well-ordered service. In this desperate struggle vast sums of money were sunk. The recently-established companies worked at a ruinous loss; and such as kept up a show of prosperity were, in fact, like the East London Company, paying dividends out of capital. The New River Company's dividends went down from L.500 to L.23 per share per annum. In the border-line districts, where the fiercest conflicts took place, the inhabitants sided with one or other of the contending parties. Some noted with delight the humbled tone of the old arbitrary monopolists, and heartily backed the invaders. Some old-stagers stuck to the ancient companies, and to the faces of familiar turncocks. These paid; but many shrewd fellows put off the obsequious collectors, and contrived to live water-rate free. Thus the honest, as usual, paid for the knaves; and the ultimate burden of all these squandered resources fell—also as usual—on society at large.

'Such a state of things could not last; and it came to a conclusion which experience, had it been invoked, might have led parliament to anticipate. For, scarcely a century before, the two chartered East India Companies, after five years' internecine war, had coalesced to form that gigantic confederacy which for years monopolised the Indian trade, and rose to an unexampled pitch of corporate power and aggrandisement, at the cost of the mercantile community.

'Just so, in 1817, the great water-companies coalesced against the public, and coolly portioned out London between them. Their treatment, on this occasion, of the tenants so lately flattered and cajoled, will never be effaced from the public memory. Batches of customers were handed over by one water-company to another, not merely without their consent, but without even the civility of a notice. Old tenants of the New River Company, who had taken their water for years, and had been their thick-and-thin supporters through the battle, found themselves ungratefully turned over, without previous explanation, to drink the "puddle" supplied by the Grand Junction Company. The abated rates were immediately raised, not merely to the former amount, but to charges from 25 to 400 per cent. more than they had been before the competition. The solemnly-promised high service was suppressed, or made the pretext for a heavy extra charge. Many people had to regret "selling their force-pumps as old lead," or fixing water-closets on their upper floors, on the faith of these treacherous contractors. Those who had fitted up their houses with pipes, in reliance on the guarantee of unintermitting pressure, found themselves obliged either to sacrifice the first outlay, or to expend on cisterns and their appendages further sums, varying from L.10 or L.20 up to L.50—and even, in many cases, L.100. When tenants thus unhandsomely dealt by expressed their indignation, and demanded redress, they were "jocosely" reminded by smiling secretaries that the competition was over, and that those who were dissatisfied with the companies' supplies were quite at liberty to set up pumps of their own.

'Thus as, in political affairs, anarchy invariably leads to despotism, so, in commerce, subversive competition always ends its disorderly and ruinous course in monopoly, which, whether avowed or tacit, individual or collective, is but despotism in a lower sphere.

'The cure for these evils lies in the competitive contract-system, which brings competition to bear for, instead of in, the field of supply, so as to obviate the reckless multiplication of establishments, and capitals, and staffs, for the performance of a service for which one would suffice. Evidence shews that the water-companies might be bought out, so as to clear the way for the consolidation of the water-supply with the drainage and other connected sanitary services, under a public authority, responsible to the rate-payers through parliament, and charged to supervise the due execution of the works by contractors competing freely, on open tender, in the public market—a system obviously calculated to secure for the public the best possible service at the lowest possible rates. By empowering such an authority to buy the companies out in full, with money borrowed at 3 or 3½ per cent., we should come into possession of their works at an annual charge for interest, less, by nearly two-fifths, than our present annual payment to the companies; by consolidating the nine establishments thus acquired, we should save more than half the present working costs; and by the further consolidations referred to above, for which this first one would prepare the ground, we should still more reduce our annual charges, and still more improve our sanitary condition.'