provisions of some of the recent London Gas Acts, which intrust this delicate operation to more competent hands, will probably prove a failure also. It is not likely that any Government department, or any scientific commission appointed by Government, can undertake to say to a manufacturer,' At such and such a price you can manufacture an article which shall produce you exactly 10 per cent. dividend- -no more, and no less.' To do this requires all the knowledge, skill, and constant experience of the manufacturer himself; and no one but himself can tell what capital he needs, what expenses he must incur, and what economies he can practise. But further, the principle of limitation of dividend is in itself faulty. So long as the charge is not too high, the public have no interest in the reduction of dividend. Their interest is in the reduction of price, which is a totally different thing. If the consumer can get his gas at 3s. instead of 4s. per 1000 cubic feet, he is not the less benefited if the shareholder at the same time gets 20 per cent. instead of 10 per cent. The fallacy lies in supposing that what is taken from the shareholder necessarily goes into the pocket of the consumer. It does no such thing; it is probably wasted in staff and other easy extravagances, which the Company have no motive whatever for reducing. Indeed one of the worst consequences of the system is, that it takes away from the manufacturer (who it is to be remembered is a monopolist) his last and only inducement to improvement and economy. It leads not only to extravagance in current expenses, but to an extravagant waste of capital. The shareholder having an easy and safe 10 per cent. on his original shares, is naturally anxious to invest more money on so good a security, and is only too glad if he can find an excuse for a further outlay. Parliament, it is true, gives now only 7 per cent. on fresh capital, and pretends to ascertain by investigation before a Select Committee whether more capital is wanted. This, again, is a question which neither a Committee nor a Department of Government can satisfactorily determine. No one but the manufacturer himself can say with any certainty how much capital he needs; and Parliament, pressed by the argument that, if the Company is not allowed to invest more capital the town will not be lighted, cannot help giving to a Company the power of investing large sums which might well be spared, and the interest of which becomes a totally unnecessary charge on consumers of gas. That unnecessary capital has been laid out in London no one who looks at the map of the districts of the Gas Companies can for a moment doubt. In fact, in this Parliamentary limitation of dividend and capital we have gone on a perfectly wrong tack and have involved. ourselves ourselves in a maze of absurdities. Coupled with the statutory price of gas, it really operates as a guarantee to the Companies of an easy 10 per cent. dividend. There is at the present moment one good feature in it, and one only, viz., that in the case of purchase of the undertakings by the Municipal Authorities, it affords some sort of limit beyond which the claims of the Companies cannot go. It would be much easier and better to make the price of gas subject to periodical revision, a thing which could generally be done by reference to price at other places under similar circumstances. But the only true solution of the gas difficulty is to do, as has been done in several large towns where the Town Councils have either made or purchased the gas-works. In Manchester, where, as above stated, they have for many years owned the gas-works, the result is, that after supplying good gas at a cheap rate they have, and have long had, a surplus of from 40,000l. to 50,000l. a year, with which they have effected all the recent numerous and expensive improvements in the town, besides paying a large part of the cost of their still more expensive water-works. In the twenty years ending with 1870 they have, after paying the current expenses of gas-manufacture and supply, made more than a million of surplus profits. The 8,000,000l. which forms the capital of the London Gas Companies would produce, at the rate of 10 per cent, 800,000Z. a year to the shareholders. The actual proceeds are rather less as some of the recent capital is limited to 7 per cent., and one of the largest Companies has not for a year or two, under present exceptional and temporary circumstances, divided quite 10 per cent. If these undertakings had been in the hands of a Municipal body, 8,000,000l. would never have been spent on gas-works. But whatever the sum such a body might have found it necessary to expend, it might have been borrowed at 5 per cent, or less, and some hundreds of thousands a year might have been saved to the consumers of gas or the ratepayers of London. Under these circumstances it is much to be desired that in all future private Gas Bills conditions should be inserted similar to those in the Tramways Act, providing for the purchase of the undertaking by the Municipality after a given period, upon fixed terms. 10. Water Supply.—In many respects this is like Gas-supply. But water differs in being even more necessary, in being more difficult to procure, and in requiring greater outlay, with less profit, as the demand increases. The supply also requires greater precautions to prevent waste-precautions which it is difficult to intrust to a private Company. Under these circumstances, recently-established recently-established Water Companies, though not unprofitable, have been less profitable than Gas Companies; and their dif ferences with the consumer have related to deficiency and impurity in the supply rather than to price. Probably none of them, certainly none of the London Companies, pay 10 per cent. on recent investments. Under these circumstances, the number of Municipalities which have supplied themselves with water is greater than in the case of gas. The number of Water Companies in the United Kingdom, exclusive of London, as given in the published lists, is about 120, with a capital of between 7,000,0007, and 8,000,000l. In London there are eight Companies, with a capital of 4,000,000l., giving altogether about 130 Companies and 11,000,000/. of capital. On the other hand, there are as many as 101 undertakings in the hands of Municipal authorities; and these are to be found in many of the largest towns, e. g. Liverpool, Manchester, and Glasgow. * The regulations to which Parliament has subjected Water Companies are almost verbatim the same as in the case of gas, with one important exception, viz., that Water Companies are bound to supply water to all consumers in the district to which their monopoly extends, upon certain fixed terms. As regards limitation of profits, the conditions are precisely the same; but their effect is not seen, because the limit has not been reached. In this case, still more than in that of gas, it is important for the health of the people that the supply should be in the hands of a body which can have no motive for restricting it; which does not seek profit from it; which can enforce rules for preventing waste, and which can draw upon other funds, if the expense of supply is large. Facilities should be given to Municipalities for purchasing on fair terms existing water-works; and no new Company should obtain a Bill without provision for the purchase of the undertaking by the Local Authority. 11. Post-office.-This is the only case in which the central Government have from the commencement established and carried on the undertaking themselves. But even here there is a qualification. For shortly after the establishment of the Post-office, when it was the monopoly of the Duke of York, a private merchant, Lord Macaulay tells us, set up a London post and parcel delivery of his own, which forced the Post-office, whilst asserting their own monopoly, to establish the London twopenny post. It can scarcely be denied that the Post-office is a success. Waterworks Clauses Act,' 10 & 11 Vict. c. 17. The The very faults which are found with it, viz., that it does not give sufficient facility for remitting money or conveying parcels, show that the public desire to employ its machinery for purposes extending far beyond its original design. So far as it goes, the Post-office is certainly an example to show that Government organization, on a large scale, can be efficiently conducted without waste and without jobbery; and it is further a precedent for making a productive service instrumental in supplying deficiency of general revenue. Two defects there are at present in it:-First. Its subordination to the Treasury. That department, which should be as strong as possible in controlling the expenditure of other departments, ought to be confined to that function, and not to be burdened with administrative duties which are foreign to its own business, and which it cannot discharge properly. The Minister who manages the Post-office ought, instead of being merely subordinate to the Treasury, to occupy towards the Treasury a position similar to that of the Head of the Admiralty or War-office, so that the efficiency of the service may not be postponed to economy, or impaired by unnecessary control. Secondly. The Post-office arrangements and the Railway system have, as we have noticed above, never been properly adapted to each other. The interest of the Companies and that of the Post-office are not necessarily consistent, and sometimes utterly at variance with each other; and the result is, that whilst persons, goods, and telegraphic messages follow the new routes of communication, and find their centres of collection and distribution either at the Railway-station or elsewhere, as may be most needed; letters too often go by the old roads; have to be sent for to the old Post-offices, and fail to reach their destination with the same rapidity and certainty as ordinary parcels. This evil is one for which, whilst the Railway Companies remain in their present position, it is not easy to find a remedy. 12. Telegraphs. The manner in which these have been dealt with is a remarkable instance of the slowness of Government action. Is is now generally admitted that these means of communication ought to be in the hands of the Government, but it is within the recollection of some persons still in office that, when Telegraph Companies were first beginning operations in this country, and when the Swiss and other Foreign Governments were establishing telegraphs in connection with their Post-offices, an official high in position in the department then charged with business relating to telegraphs, most strongly urged upon the Government the expediency of taking them into its own hands. This advice was rejected. Private companies established them; and the country has had to purchase them at an enormous cost. The increase of business is so large, that even after paying all interest on capital, as well as working expences, the first year's accounts show a small surplus. But it also appears that the Government have had to pay to the Companies four to five millions more than they would have had to pay if they had constructed the telegraphs themselves, and that they have besides, a system much inferior to that which they would have had if the Post-office had constructed it. Although it is as yet too early to speak with absolute certainty concerning the results of this purchase by the Government, there is every reason to believe that it will result in increased efficiency and economy. At any rate no one dreams of retracing the steps thus taken.* From the above short notice of these several undertakings, we may draw the following conclusions of fact : (1.) That in an earlier state of society, the undertakings of which we are speaking were generally established and maintained by some public governing body, whether of the country generally, of the districts or interests concerned. (2.) That at a later period private capital and enterprise came to the assistance of Government, and did what Government never could or would have done. (3.) That at a later period still, the evils arising from placing these monopolies in the hands of private companies has been felt; that these evils are likely to be felt still more strongly, and that there is a tendency again to place such companies in the hands of some public body-central or local. (4.) That whilst Harbours; natural Navigations; many Docks, Roads, and Bridges; a few Gasworks; some Waterworks; the Post-office; and Telegraphs are now in the hands of the State or of Local Governing Bodies: many Docks, all Railways, most Tramways, and most Gas and Waterworks, are in the hands of Private Companies; and further, that the Capital invested in these undertakings amounts probably to 700,000,000Z. (5.) That there are many points in which the interests of these Companies are at variance with that of the Public; and that the conditions which Parliament has hitherto imposed on them, have proved altogether inadequate for protecting the public interest. This brings us to the last question we propose to consider, viz., what is the best mode of dealing with these undertakings for the future? *Reports on Telegraphs, 1871.' By Mr. Scudamore. As |