'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.'