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The Fabian Municipal Program, No. 1.
London's Water Tribute.
It costs less than £700,000 a year to supply London with water ; but London has to pay over £1,700,000 for the water so supplied. The balance pays dividends to shareholders on stock, of which the market value is probably now £39,000,000. But this nominal capital value of thirty-three millions sterling is merely the inflation due to fond anticipations of purchase by the public at an extravagant price. The actual capital expenditure has been only a little over fourteen millions sterling. Twenty years ago the proprietors valued their investment on the Stock Exchange at not more than £140 for each £100 of outlay. In 1883, after the Conservative Government's prodigal offer of 1879-80, it stood at £213, and now it stands on an average at about £227 per £100. But London is not bound by these extravagant estimates; and the London County Council may, if it chooses, give the companies the go-by, and imitate Manchester and Liverpool in seeking for itself an unpolluted supply from afar.
London is at present supplied with water from the works of eight companies of private shareholders, whose expenditure, largely swollen by the former reckless competition between rival companies, by legal and Parliamentary charges, and by the wasteful extravagance engendered by abundant wealth. It is probable that duplicates of the existing works, mains and other plant could be constructed for a much smaller sum-say, ten millions sterling, which could be raised on the credit of the County Council at about 8 per cent.
Even on the inflated outlay, a splendid dividend is paid. The companies make an annual profit of more than a million sterling, equal to over 7} per cent. on the whole, notwithstanding lavish pay and pension to all the superior employés, and handsome fees to directors. The ordinary shareholders often get as much as 11 per cent., as, for instance, in the case of the New River Company for the last five years. RATES PER CENT. OF DIVIDENDS. (Corrected from the Stock Exchange Year Book, 1891.
9 East London
7 Grand Junction
10 and ) per cent
towards back dividends. Lambeth
9 New River
£11 18s. 9d.
£11 18s, 9d. Southwark & Vauxhall
6 West Middlesex..
10 * The shareholders of the New River Company possess, moreover, anomalous electoral privileges. The owner of ever so small a fractional part (provided that it produces £2 a year) of one of the original shares possesses a vote as a freeholder in every county constituency in which the company owns property, or through which'its pipes pass. These shares also escape probate duty, and pay only succession in place of legacy duty. One of the original". Adventurer's Shares was sold by auction in 1889 for £122,800. The original capital contributed on this share was probably about £100.
grown to 758,335, and the water rentals to £1,764,047. Whilst the number of houses supplied in 15 years rose 46 per cent., the rental received increased 71 per cent. The average payment per house rose from £1 18s. Od. to £2 4s. 5d., whilst the quantity of water supplied to each house, has, on the whole, positively decreased.
The result is shown in the growing profits of the companies
Net Water Rental of the Metropolitan Water Companies for the
Years 1884 and 1887 to 1889.
The year's increase... East London.....
The year's increase... Grand Junction
The year's increase... Kent.
The year's increase... Lambeth.
The year's increase... New River....
The year's increase... Southwark & Vauxhall...
The year's increase...
£ s. d. 109,376 16 9 122,889 12 8 123,290 10 8 126,570 11 10
6,132 38 4,022 7 5 400 18 0 3,280 1 2 241,873 7 11 249,517 6 8 251,367 12 10 257,191 3 9 669 1 10 5,149 4 9
1,850 6 2 5,823 10 11 (Decrease) 1(2,566 7 2 172,838 11 3 172,888 15 3
173,761 17 5 574 0 11 3,178 2 8
50 4 0
873 2 2 109,251 1 3 118,388 8 1 120,002 98 123,013 10 9 4,293 17 7 5,549 15 3 1,614 17
3,011 1 1 184,363 3 11 200,645 16 6 204,823 15 6 209,367 18 10
6,898 12 3 5,957 16 10 4,177 19 0 4,544 3 4 431,613 11 0 447,880 8 10 453,015 11 3 464,563 14 3 6,269 2 8
3,288 18 10 5,135 3 5 11,548 3 0 195,046 13 9
191,809 8 8 197,188 2 10 203,863 6 11 771 15 8 7,220 14 4 5,378 14 2 6,675 4 1 200,268 15 3
211,856 12 0 204,747 14 8 205,714 13 9 16,615 8 11 6,446 11 5 7,108 17 4
966 19 1
(Decrease) 1,634,359 17 0 1,715,826 4 8 1,727,324 12 8 1,764,046 17 6 41,555 1 8
40,813 11 6 18,607 5 4 36,722 4 10 669 1 10
7,108 17 4 40,885 19 10
40,813 11 6 11,498 8 0 36,722 4 10
The year's increase...
Total Water Rental
Total Increase ...
These excellent receipts are earned owing to the extraordinary legal rights possessed by the companies, under their private Acts of Parliament, to levy a water rate in proportion to the rental, without reference to the amount of water supplied. As London houses increase in number or size (about 2 per cent. per annum) and those already built rise in value (about 1 per cent. per annum), so the water revenue goes up. It rose 58 per cent. (more than half as much again) between 1872 and 1883, though the number of houses only rose 32 per cent., and the quantity of water delivered per house was nearly always less than in 1872. There is no limit to the possible tribute thus leviable upon London, in return for a supply of an article of prime necessity to its inliabitants. The actual figures for 1887 to 1889 are given below.
The water supplied is, moreover, often of doubtful quality. Five companies derive it wholly or partially from the River Thames; the two largest mainly from the River Lea; and only one (Kent) from deep wells. As the population in these river valleys increases, and as the extensive use of manures on the land becomes more general, the sources of supply become steadil-
more polluted.* London must, ere long, imitate Glasgow, Liverpool, and Manchester in seeking a supply of water from some lonely lake. We want an aqueduct from the Welsh hills, to bring us a constant supply of pure, soft water. But the existing "water lords" will not willingly see their polluted supply made obsolete.
Number of Houses and Average Daily Amount of Water supplied by the Metropolitan Water Companies in the Years 1887, 1888, and 1889.
Average Number of Houses, &c., supplied. Average Daily Supply for
Name of Company.
The necessity for their suppression by a public authority is admitted ; and as long ago as 1879 the Conservative Government decided upon this course. The price proposed to be paid (£39,118,000) was, however, so outrageous that the Government was obliged, by the public outcry, to abandon the scheme. After 13 more years' extortion, the companies would now, no doubt, demand even heavier terms than in 1879.
The water companies possess, however, no legal monopoly. In the past, indeed, active rivalry frequently existed between them; and even now two companies, in several instances, supply the same area. It is quite open to the County Council to obtain Parliamentary powers to construct a competing supply; and the defunct Metropolitan Board of Works had fully decided to take this step:
The London County Council should promptly seek power to construct a new supply, and, at the same time, to arrange to take over the existing service at a fair price. There being no legal monopoly, the shareholders can have no " vested interest” in the present excessive dividends. It is accordingly quite unnecessary to offer them anything more than the actual value of their mains and other street plant. Even if they were reimbursed their whole extravagant outlay (£14,140,434), the interest payable by the County Council on a loan of this amount would not exceed £425,000, or £650,000 less than is now paid to the share and bondholders, irrespective of the saving likely to accrue from unification of management. This amount is equal to 6d. in the pound of London's rates, and would amply suffice to provide any improved service required, as well as afford a useful surplus towards the cost of London government. The
*"Farnham, Guildford, and Woking still deliver untreated sewage into feeders of the River Thames. Staines continues to pollute the main stream.
Instances of the pollution of the River Lea are not wanting." (P. 137, Local Government Repori, 1887-8, C-5,526).
provincial town, in permitting its water supply to remain in private hands.
With a municipal water supply, the present survivals of the evil cistern arrangement must disappear, and a “constant supply" be made universal. The present statistics on this point are as follows:Statistics of the Number of Houses Supblied, and Proportion of them with a
“ Constant Supply" of Water, and the Average Daily Supply.
5,160 7,217 | 34,251 35,226 20 216 27 50 East London
137,238 158,025 156,588 166,369 95 198 26.46 Grand Junction 40,493 44,043 52,794 55,870 79 250 27 si Kent .......
35,336 41,231 68,136 73,230 56 132 22:04 Lambeth
40,333 47,694 84,406 90,209 53 154 2201 New River
42,458 62,448 148,054 153,133 41 163 21.72 Southwark & Vauxhall 25,180 66,098 107,191 111,736 59 170 22:8.5 West Middlesex....... 20,493 24,737 68,486 72,562 34 170 22:74
Total........ 346,691 451,493 713,906 758,335 59 177 23.93
The existing "water-rate,” equalised and properly graduated, might continue to be levied as part of the County Council rate; but there is no reason why any special charge should be made for water, any more than for roads, drainage, police, or other services of public utility. We can, at least, afford “ Communism in water."
THESE FAP its Lecturers, can be obtained from the Secretary, not the Fabian office, 276, Strand, London, W.C. Also the following publications:
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FABIAN TRACTS. No. 1, Why are the many poor? No. 12, Practicable Land Nationalisation. No. 13, What Socialism is. No. 16, A Plea for an Eight Hours Bill. No. 19, What the Farm Labourer Wants. No. 20, Questions for Poor Law Guardians. No. 22, The Truth about Leasehold Enfranchisement. No. 24, Questions for Parliamentary Candidates. No. 25, Questions for School Board Candidates. No. 26, Questions for London County Councillors. No. 27, Questions for Town Councillors. Each 4 PP., 6 for id. or 1/- per 100.
Tracts No. 5, Facts for Socialists. No. 7. Capital and Land. No.9, An Eight Hours Bill. No. 11, The Workers' Political Program. No. 14, The New Reform Bill. No. 15, English progress towards Social Democracy. No. 17, Reform of the Poor Law. No. 23, The Case for an Eight Hours Bill. Each 16 pp. or 20 pp., id, each or gd. per dozen. No. 29, What to Read, a list of Books for Social Reformers. 3d. each or 2/3 per dozen.
No. 8, Facts for Londoners. 6d. each, or 3s. per dozen.
No. 10, Figures for Londoners. 6 for id., or is. per hundred. Tracts Nos. 30 to 37.-THE FABIAN MUNICIPAL PROGRAM. No 1. The Unearned Increment. No. 5. London's Water Tribute. 2. London's Heritage in the City 6. Municipalization of London's Guilds.
Docks. 3. Municipalization of the Gas „ 7. The Scandal of London's Markets Supply.
8. A Labour Policy for Public 4. Municipal Tramways.
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The Fabian Municipal Program, No. 6.
The Municipalisation of
the London Docks.
The careless individualism which allowed the control of London's riverside accommodation to pass into private hands has brought its own punishment. The Docks have as their product the casual dock-labourer of the East End; and the persistent refusal of the gigantic dock companies to take any steps to organise this labour or to systematize its employment is the despair of every East End reformer. The Docks offer a potent attraction to the shiftless casual. Habits of decent regular work are 'rather in the way than otherwise. The ever-present chance of a job of this kind furnishes a perpetual addition of strength to the temptations whereby industrial character is lost.
The London Docks are now, by successive amalgamations, in the hands of four huge companies, having an aggregate nominal capital of over twenty million pounds sterling, and the largest two of them have further combined under a joint committee. Particulars of this capital are given below; and it will be seen that although the companies have been competing ruinously with each other, and with the wharfingers, a net revenue of over £570,000 is yielded annually, being about 2 4-5th% on the whole nominal capital. It is to save this income from jeopardy that the directors refuse every request and neglect every suggestion made to them to diminish the evil caused by their manner of employing labour.
The scandal of the Docks is not so much the low wages to be earned as the uncertain nature of the employment. In order to avoid the expense of a permanent staff, labour is engaged for a few hours at a time, and left to loaf and starve when not wanted. The Dock Companies recognise absolutely no duties towards those they employ. The “ Joint Committee" of the two main companies is now probably the largest individual employer of labour in London, and there can be no doubt that, for magnitude of evil effect, this chartered industrial Leviathan is the worst.