THE BRITISH QUARTERLY REVIEW. FOR JANUARY, 1879. ART. I.-London Gas. (1.) The General Gas Act for London, 1860. (2.) The City of London Gas Act, 1868. (3.) Reports of the Gas Referees (Parliamentary Papers). 1868–72. No public grievance in London has ever excited such universal grumbling and such formidable complaints as the Gas Question. The gas which illuminates our streets and our dwellings has been second only to the weather in furnishing matter for conversation and complaint. Its great usefulness has been too much forgotten, while its defects have been grievously felt. It either does not give its proper amount of light, or it vitiates the atmosphere of our rooms, or blackens the ceilings, tarnishes our silver plate, or damages the textile goods in the warehouses, or it does each and all these evil things together. And then, the Gas Companies are so exorbitant and overbearing! These are the complaints which one hears at the present day, and in recent times they were much greater and better founded than they are now, besides being excited by many other hardships to the public, both as individuals and corporately, which happily have become things of the past. ously, and by adroit management, they for long foiled every attempt to place their monopoly under adequate restrictions. pulsion, and have strained their monopoly in They have yielded nothing save under coma manner elsewhere unknown. During the first stage of the conflict, ending with the passing of the City of London Gas Act in 1868, upwards of £100,000 had been spent in parliamentary conflicts; and since then hardly a year has passed without a renewal of the conflict in one form or other. It is evident, however, that the long parliamentary struggle between the municipal bodies and the Gas Companies is now near its close; and although several of these Companies (viz., three of those on the south side of the Thames) have still to be brought under restrictions, not only the principle of the regulative system, but even the precise details of it, are now so fully settled by Parliament, that there cannot be any doubt as to the issue. Indeed, the Companies, as the result of their long monopoly, are now so well off that they may regard with indifference any restrictions that Parliament is likely to impose upon them. Unluckily for them, in the very hour of their triumph they are called upon to encounter, in the Electric Light, a new antagonist against which their monopoly is powerless, and the advent of which has been most enthusiastically wel Owing to this state of matters, the gas question in London (indeed also throughout the kingdom) has been the subject-mat-comed by the public. ter for more bills and parliamentary committees than any other question of the kind. No trade or industry has yielded such golden harvests to lawyers. Again and again during the last eighteen years the municipal authorities of the metropolis have endeavoured to grapple with the grievance; while the Gas Companies, with their vast wealth, have on every occasion resisted vigor In this article we shall not concern ourselves with the beginnings of gas-manufacture, or even with the early history of the London Gas Companies. We deal with the present state of matters-the new régime which is being, and to a large extent has already been, imposed upon the metropolitan gas-supply. For this purpose we need not go further back than 1860, when a general teen sperm candles, six to the pound, instead Gas Act was passed for London, and when I quired to give a light equal to that of four- It was especially in the City where this competition was carried out most keenly and completely-three Companies being there in rivalry, and every street being laid with three sets of gas-pipes, so that the tearing up of some part or other of the roadways and pavement was almost incessant. This was one of the evils which led to the Act of 1860, although, as the public ere long found, it was trifling as compared with the evils into which they heedlessly rushed. There was also another, which was really no evil at all to the public, but which presented one of those anomalies of which the public is always so impatient. The price of gas varied in every district of London-nay, in the same street-according as competition was strong or weak. The quality of the also varied, or rather it was believed to do so, for at that time there was no testing of the gas upon which reliance could be placed, whether for illuminating power or for purity. It is true that Dr. Letheby now and then, at long intervals, made a few testings of the gas supplied within the City; but these were quite inadequate for a proper ascertainment of the matter, and beyond the limits of the City there was no testing of the gas at all. gas The grand change made by the London Gas Act of 1860 was the districting' of the Companies. A special area was assigned to the operations of each Company, within which no other Company was allowed to lay its pipes-except within the City, where the Corporation shrewdly preferred to continue to be supplied by three rival Companies. This Act also fixed a uniform illuminating power for the gas supplied to all parts of the metropolis; viz., the gas, when burning at the rate of five feet an hour, was re gas. This Act, however well intended, in its As regards the quality of the gas, the Act h don to exact payment of a penalty-which was strenuously resisted by the offending Company-and the attempt failed, owing to an informality in the proceedings. A monopoly of this kind soon became intolerable. The public saw the Companies, most of which had previously been poor concerns, paying far more than ten per cent., and keeping up the price of gas for the purpose of making these extra payments, while no check was maintained even upon the quality of the gas supplied. The Corporation of London at length took up the matter, and a prolonged and most costly parliamentary contest ensued. For the Gas Companies, or nearly all of them, such a contest had but small terrors, for they could defray the costs without deducting a shilling from their maximum dividends of ten per cent. It was rather a pleasurable and not unprofitable excitement to the directors and officials-the directors not hesitating to vote extra payments to themselves and sometimes to their chief officials. The Chartered Company, even although it could not then pay its maximum dividend, in 1867 voted a testimonial' of £1,500 to the directors, in addition to their ordinary salary of £2,500, as a reward for their labours in these parliamentary campaigns. These and several subsequent years were golden times for parliamentary solicitors and barristers, and likewise for the tribe of 'professional witnesses' ' -a class which has largely multiplied of late years, and which consists chiefly of chemists and engineers, who, while giving evidence upon oath, regard themselves as barristers for the parties who retain them; in other words, for whichever party in a suit comes to them first, or is the more likely to pay them the largest fees. will be for Parliament to concede to the City of London, the Metropolitan Board of Works, or other local authorities of the respective districts, the power of supplying their disCorporation of Manchester supplies that city tricts with gas in the same manner as the and neighbourhood. At that time the erection of gas-works by the municipality appeared to be a wise and highly profitable proceeding, nor, for reasons to be stated, would it have interfered with the fair rights of the Companies. But at that time the Metropolitan Board of Works, which now-a-days is not deterred by any magnitude of enterprise, was still in its infancy, and neither it nor the Corporation had any proper understanding of the case put before them. The position of the gas question at that time was this :-The public requirement for gas was increasing eight or ten per cent. each year, and Parliament had expressed its resolve to allow no more new gas-works to be erected within the urban limits of the metropolis, while about one-half of the existing gas-works were already cramped for space, and no possible extension of the other works could supply the rapidly-increasing demand of the public for gas. Accordingly, had the municipal bodies, adopting the recommendation of Mr. Cardwell's Committee, erected two or three new gas-works in the waste places on the outskirts of London, where the works could be progressively extended in magnitude, they would have acquired for these works the supply of the whole additional and rapidly-increasing quantity of gas required by the metropolis. In the course of a dozen or fifteen years these municipal gas-works would have supplied one-half of the wants of London, and would have equalled in magnitude all the works at that time belonging to the Companies. As one mode of proceeding, the municipal bodies could have sold this gas in bulk to the Com The London gas question was fought over before committees of the House of Commons for two successive years (1866-67) without any settlement being arrived atthe Companies obstinately resisting the at-panies, stipulating that it should be retailed tempt to place their monopoly under restrictions. At the close of the second year's fight, Lord (then Mr.) Cardwell's Committee, when reporting their failure, recommended that, if the Companies continued to oppose a reasonable settlement, the municipal authorities ought to erect gas-works of their own. The chief part of the Committee's report was as follows: Unless the Companies are prepared during the recess to assent to a satisfactory arrangement for the consumer, your Committee think that every facility should be afforded to the local authorities of the metropolis, in the session of 1868, for the introduction of an independent supply of gas. The proper remedy at a corresponding price to the public-the distributing process being thus left to the Companies, and no new sets of pipes or extra disturbance to the streets being necessary. But the gas question was still a terra incognita to the municipal authorities, and-fortunately, as it now happens-this great and apparently most promising opportunity was lost, never to return. In 1867 the Government had taken up the question; a bill was brought before Parliament by the Board of Trade, and in 1868 a third year of costly combat ensued. This year, however, the united phalanx of opposition which the Companies had hitherto presented was broken by the secession of one of them, and the consequences have directly competed with the Chartered, likeproved memorable. The Chartered Com-wise struck their flag. The majority of the pany was at that time less prosperous than Companies, however, stood out. Led by, its comrades; it had never been able, de- or at all events including, the great Imperial spite all the advantages conferred by the Company, by far the largest and most Act of 1860, to pay its maximum dividend powerful in London, the other Companies of ten per cent. Its works, three in num- refused to accept the terms of the Board of ber, were very disadvantageously placed, Trade bill. And thus, as the result of the and, worst of all, at none of these works three years' contest, the Act of 1868, inwas there any room for extension. Nor stead of being a general Act for London, would Parliament allow the Company (or had to be restricted to the three assenting any of the Companies) to erect new gas- Companies, which were those which supworks unless it consented to place its mo- plied the City. Now that this Act has been nopoly under suitable regulations. Moreover for more than nine years in operation, and the main field of the Chartered Company's its working fully ascertained, it is surprising business was within the City, where it had that it should ever have encountered such two other Companies to compete with, so opposition-an opposition, be it said in adthat it could not compensate its disadvan- vance, not confined to 1866-67-68, but retages by raising its charges upon the public. newed with more or less vigour whenever Thus the Company's dilemma was of the a new Company (coming to Parliament with most formidable kind. It could not, even a bill to raise more capital) has been in 1868, pay its maximum dividend, which brought under its provisions. was regarded by it as a great hardship; and as it could not extend its 'make' of gas, the further disaster was imminent that it would become a fossilized Company, virtually shunted out of the field by its rivals, who could and would have proceeded to supply the extra quantity of gas yearly required in its own district, or at least within the City. Since the passing of the General Act of 1860, which applied to all the London Gas Companies, Parliament has steadily refused to interfere with the vested interests' of those Companies as defined by that Act, holding that further regulations, however much required, could not be imposed upon any of these Companies without their consent. Parliament, in fact, acknowledged the mistakes which it had made in 1860, but felt bound to leave them unremedied. Thus the only opportunity for imposing further and adequate regulations has been when any Gas Company came to Parliament with a bill of its own for fresh powers, as for leave to increase its capital-a course which has already brought three-fourths of the gassupply of the metropolis under regulation, and which in a few years more will bring the remaining Companies likewise under the new régime. In 1868 the Chartered Company alone was under the necessity of applying to Parliament for leave to raise new capital and to erect new works. Accordingly it struck its flag, and left its comrades to prolong the battle for themselves. This act of secession was met with an outery of betrayal by the other Companies, but it has proved the salvation of the Chartered Company. With their hands thus forced, the two other Companies which supplied the City, and which The Act of 1868, together with their own bill, which they obtained by assenting to the provisions of that Act, at once enabled the Chartered Company to enter upon a new and most successful career. With the million sterling of new capital it was allowed to raise, the Company was enabled to overcome its first and most pressing difficulty, by erecting large new works. The advantage of this to the Company was twofold. In the first place, the Company was enabled to meet the yearly increasing requirements of its customers for more gas, thereby avoiding becoming fossilized, and compelled to see its competitors getting all the new supply into their own hands. Secondly, as these new gas-works were well placed, and admitted of any amount of extension, the Company, in a few years, was enabled to close its old works, at which the manufacture of gas had to be carried on under disadvantageous circumstances. These advantages, however great, were but a small part of those now placed within reach of the Chartered Company; and by a bold and astute employment of its new powers, the Company has risen from the least prosperous of the London Companies to by far the largest of all, and almost as financially prosperous as any of them. By the legislation of 1868 the Company obtained power to amalgamate with any of its rivals, and simply in the form of a private arrangement, supervised by the Board of Trade, in order to prevent any detriment to public interests. In this way the Company could form amalgamations by means of private negotiations, without the expense of going to Parliament, and without encountering the formidable opposition from its neighbours which attends such parliamentary applications. The Company immediately put its new powers in operation-commencing a diplomatic campaign among the Companies which has yielded far more profitable results to the Chartered Company than it could have attained by its best efforts in its ordinary business of gas-manufacture. Hardly had the Act of 1868 come into operation, than it was announced that the Chartered Company was negotiating an amalgamation with the City of London Gas Company, one of its two competitors in the supply of the City. Considering the financial and other conditions of the three Companies which supplied the City, it would have appeared more natural that either of the two others was more likely to swallow up the Chartered Company than to be swallowed up by it. Both of them were, and for years had been, more profitably conducted Companies than the Chartered; but, by adroit management, the Chartered succeeded in amalgamating with and swallowing up the City of London Company, which then had its works in Blackfriars, giving the latter and more prosperous Company's shareholders a preference-claim for their ten per cent. dividends (the maximum dividend then allowed by Parliament) upon the revenue of the amalgamated Companies. checkmate to the Chartered Company, which, even after swallowing up the prosperous City of London Company, and getting a nest-egg in cash in the shape of that Company's reserve fund, was still unable to pay its maximum dividend, while charging the highest price which the competition of its rivals in the City allowed it to do, viz., 3s. 9d. per 1,000 feet of gas. How then was the Company to fare if its competitor, the Great Central, were to reduce its price of gas to 3s. As already said, the City constituted nearly the whole of the Chartered Company's field of business, and if the price of gas were to be greatly reduced in the City, the prospects of the Company, despite its new powers, would have become even worse than before. In every part of the City its pipes and those of the Great Central Company ran side by side; there was the most effective competition at every point; and it was obvious that, when this impending and inevitable reduction took place in the price charged by the Great Central Company, the Chartered Company would be compelled to reduce its price to a similar point, which for it would have been, if not absolutely unremunerative, at least such as would have occasioned a most serious reduction in its dividend. Happily for the Chartered Company, the Thus one of its rivals and direct competi- chapter of accidents opportunely came to its tors was removed from the field. But the aid, and rescued it from this dilemma in an other one, the Great Central Company, re- unexpected and very memorable way. The mained, and its competition was the most great fraud committed by Hicks, the secreformidable of all. The Great Central Com- tary of the Great Central Company, took pany was originally established about 1845, place, or rather came to light. He had emunder the auspices of some influential City bezzled £70,000; and as, under the Act of men, as a check upon the high prices then 1868, the Company could not divide any charged by the Chartered and City of Lon- sum beyond the revenue of the current year, don Gas Companies; and under the skilful and as Hicks's defalcation had at once to be management of Mr. Croll, the new Company ' written off' their balance-sheet, the Comfulfilled this purpose admirably, making gas pany had to face a total, although tempocheaper than was done by any of the Lon-rary, loss of dividend. The shareholders don Companies. It had kept down the were horror-struck at such a prospect. It price of gas in the City, while not only pay is true that in a year or two the Company ing its shareholders the maximum dividend would have become even more wealthy than of ten per cent., but while applying a sur- before, and by reduction in the price of its plus above the ten per cent. to the making- gas would have gained ground upon its comup of its back-dividends to the same amount. petitor, the Chartered Company. But the When this application of its surplus was total loss of the year's dividend was a disstopped by the Act of 1868, a reduction in mal prospect. The Chartered Company at its price of gas became inevitable. In fact, once saw its opportunity. It offered to pay the Central Company manufactured its gas the lacking dividends on condition that the so cheaply, and its profits were so large, that Great Central would amalgamate with it, it was reported that, in the year when it guaranteeing the maximum ten per cent. divwas swallowed up by the Chartered Com-idend to the shareholders of the Great Cenpany, its profits amounted to sixteen per cent.-nearly one-half of which, of course, but for the amalgamation, must have been devoted to a reduction of its price of gas. This position of affairs threatened to give tral by making it a first charge upon the revenue of the Chartered Company. And so an amalgamation was effected: the Great Central Company ceased to exist, and the Chartered Company acquired a complete |