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the increase of profit will be more than the retrospect shows to be likely. Some of the companies have made large outlays within the last five years, for the introduction of constant supply and for other improvements, and the effect of these improvements on revenue is as yet, they urge, by no means fully shown.
On the other hand it may he urged that an actual movement extending over five consecutive years is a surer basis for calculation than an estimate showing a more rapid movement. Further, it appeared from the evidence before the Select Committee, on the first day of their sitting, that no professional report on the condition of the works and property of the various undertakings had been asked for by the negotiator for the purchase, so that there was no assured proof that the expenditure for maintenance and repair might not be found to advance more rapidly in the future than it has done in the past. Such, indeed, is the experience of our railways, and publie works in general. As far, then, as a judicial opinion can be at present formed, it would be to the effect that no increase on the rate of improvement which has obtained from 1874 is confidently to be expected up to 1892.
Referring to the Bill itself for the details of the figures, the gross sum which, after making a rebate of 1,600,000l. for certain deferred payments, was to be paid by the Metropolis for the acquisition of the properties of the water companies, was 34,160,000l. But this was to be paid in 3 per cent. stock, at par--and that at a time when the price of a 3 per cent. stock was above 96. As both the magnitude of the stock, and the perfect security of its title, would have been such as to command the best terms in the market, this mode of payment virtually made a present to the seller of over four millions sterling, and raised the incidence of the debt which would weigh on London twelve years hence to above thirty-eight millions of money. This large figure, allowing for the conversion of all the loan and debenture stocks of the companies on terms advantageous to the holder, would have resulted in the payment of about 3651. for every 100l. of the original stock of the companies. On March 4, 1880, the stock of the Kent Company was quoted at from 325 to 345; and the average price of the stocks of the seven companies (exclusive of the New River Company, which is not divided into 100l. shares) was 246l. Thus speculation had not risen to the level of the terms provided by the Bill.
By the end of the twelve years which were to elapse before the last of the deferred payments specified by the Bill were to be made to the water companies, the steady growth of London will probably demand the expenditure of from 3,000,000l. to 4,000,000l. on the extension of the works of the companies. This expenditure is an essential condition of that growth in their income of which we have spoken, and on the anticipation of which all the deferred payments were to be made. But this necessity has been absolutely overlooked by the Bill. The companies were therefore credited with
a prospective annual increase of revenue, without being at the same time debited with the outlay which they would have to make to receive it. The miscalculation was much the same as if, on looking back from 1879 to 1875, the net income of the latter year had been divided over the capital of the former year. The result of such an oversight would be to raise the apparent net earning of 100l. of stock from 7 to 8 per cent. As mere matter of finance, to say nothing of any other questions, this great blunder is embodied in the agreements sanctioned by the Bill. Independently of any other consideration, this error alone made a sum that would otherwise have reached 34,500,000l. virtually exceed 38,000,000l.
The detection and rectification of this prodigious oversight must naturally have ensued from any judicious investigation of the agreements which were proposed, and on which the Bill of Sir Richard Cross was founded. It might have been assumed, on the precedent of the Birmingham and the Stockton and Middlesborough cases, that thirty-three years' purchase of the annual net income of the Companies would be the starting point of any valuation, taking that number of years as the theoretic equivalent of a guarantee in perpetuity. This would come, in round numbers, to about 27,500,000l. If the companies were allowed to continue their present rate of growth, and if no opposition were made to their applications to Parliament from time to time to authorise them so to do, the corresponding value of the property, in 1892, would be about 36,400,000l. But out of that sum the proprietors would, in the interval, have raised and provided 3,500,000l. for the extension of their works. The sum of 32,900,000l. would therefore be the figures as to which a fair discussion might arise with regard to any conditions which might increase it or diminish it. And this approximate valuation would have been less, by more than 5,000,000l., than that sanctioned by the Bill.
On this view of the case, the cost to the metropolis of the works for providing the water supply would amount, in the year 1892, to 36,400,000l., in a perpetual 3 per cent. stock, or to an annual payment of interest to the amount of 1,092,000l. If the rates in force at the time of the commencement of the discussion were maintained, but not increased (further than by the increase in the number of ratepayers naturally accruing from the growth of the metropolis), the gross income from water rates in 1892 would be above 2,103,000l. The expenses, if no great economy had been introduced, would then be about 734,000l. per annum. By this transaction, therefore, a margin of 277,000l. per annum would be attained by the year 1892, which might be devoted either to the reduction of the rates, or to the extinction of the capital debt.
It is impossible to form any just opinion as to the merits of a scheme for facilitating or improving the water supply of London, without referring to the very important question of constant service. On all hands the desirableness of this system is admitted.
prevention of fire it is evidently of the first importance. As matter of economy the same may be said. Experience leads to the expectation that a material diminution in the quantity of water consumed per individual supplied will be effected by constant supply. Nor is the sanitary value of a constant service less than either its economic or its fire-preventing value. This point was fully established in the course of a discussion on the filtration of water, at the Institute of Civil Engineers, on November 12, 1867, in which Dr. Letheby, Dr. Frankland, Professor Wanklyn, and other chemists, as well as the engineers most familiar with the subject of water supply, took part. 'At the present time,' said one of the speakers, the water was filtered at great expense to the water companies, then brought through miles of mains, and delivered into the cisterns, which were often placed where it was impossible to clean them, or, if this were practicable, the servants generally neglected them, and they got into a dirty condition, and that water, which had cost thousands of pounds to filter, by the time it was drunk was in a foul and filthy state, not fit for a human being.'
The difficulties which oppose the universal adoption of a constant service do not emanate from the water companies. The advisers of these bodies are aware of the economy in use of water attendant on constant supply; and in all cases, excepting that of supply of water by measure, this economy would be a gain to the companies. Out of the 563,000 houses in the companies' districts, there were, in August 1879, 128,704 to which the constant supply is laid on, being nearly one-fourth of the whole; and of these, 76,853 have been so laid on or transferred since October, 1873.
The real obstacle to the introduction of this important improvement is the cost of the change of fittings. This cost falls on the owner or occupier, and no machinery exists for compelling him to make the outlay. The expenditure involved, according to the evidence of the experienced engineer of the New River Company, is 8l. per house. Nearly 3,500,000l. will, on this estimate, have to be expended. If a measure were introduced which would give the companies, or the new water controlling body, power to make the change at their own cost, charging an additional twelve or fifteen shillings per house for a limited term of years, it might be practicable to conciliate all interests, and to introduce this important amendment at once. The excess of the charge over eight shillings per house (or 5 per cent. on the actual outlay) would extinguish the debt for the new fixtures in a number of years determined by the charge. A rate of 158. per house for the new fittings would pay for them by the end of fourteen years, and the economy of water effected would have to be set against the payment.
The economy in working charges which it is possible to effect by the unification of control has been greatly exaggerated. At the close of the last session of Parliament an honourable member stated in the House of Commons that 100,000l. per annum might be saved
in the cost of management by such consolidation. Mr. E. J. Smith, on June 22, told the Committee,-"I have no doubt the sum I have put down-172,354l. anually-would be thought by many engineers to be too small. It is conceived that if the eight companies were consolidated, the present pumping power would suffice for 50 per cent. more than the present supply of water of 154,000,000 gallons per day.' The cost of pumping is the cost of work done, and no consolidation can reduce that. The total annual cost of management in the year 1874, including 14,8341. paid as fees to directors, was 91,443. By 1878 it had mounted to 111,603l. This included even the percentage paid for collecting the rates. The working charges of the different companies vary from 41 pence to 80 pence per 100 metric tons of water. But there are mechanical reasons for a part of this difference, and probably good reasons for some other part. We have before referred to the subject of the cheapest rate of working charges to which experience points. But considerable economy of outlay may hereafter be rendered feasible by a better districting of London. It is to this, rather than to imaginary savings, that the attention of the water engineers can be most profitably turned.
Day after day the examination of the gentleman to whom it appears that the country has been chiefly indebted for the proposal to buy up the property of the London water companies at a purely fancy price, has tended to illustrate the views expressed in the foregoing pages. How long an investigation, which, being carried on for two days in the week, has only dealt with a single witness in the first seven sittings, may be protracted, it is of course idle to attempt to predict. But it is clear that the more thoroughly the proposed agreements are investigated, the greater appears to be the danger that would have resulted from hasty legislation. The financial aspect of the question, large as it is, is even of less moment than the sanitary aspect; and this can only be fully considered, as we have shown, by enlarging the field of inquiry. It is impossible to decide as to the future sources of the water supply of London-as far at least as any attempt to seek them beyond the limit of the watershed of the valley of the Thames is concerned-without giving heed to the broader question of the water supply of the entire population, rural as well as urban, of the country. Nor will it be possible to arrive at any satisfactory decision on this point, until measurements of the outflow of our rivers-such as those which have been taken by the French and Italian engineers of the rivers of their respective countries-have been added to the information collected by the office of the Ordnance Survey. A hydrographic survey of England, as has long since been urged in the columns of Fraser's Magazine,' is the necessary prelude to a sage and adequate resolution of the great problem of the water supply of the population.
F. R. CONDER.
AN ARTIST ON ART.1
HE present is an age of transition and uncertainty in many the last fifteen years, a literature of art has sprung up, which, it is no exaggeration to say, has hardly a parallel in the world's history. Not even the windy subtleties of the schoolmen, the interminable discussions as to species and genera, or the real existence of 'kinds,' can be said to be as foolish and useless as the writings of the modern school of æstheticians; and this simply for the reason that there is not behind the phraseology employed any substratum of assured meaning. Each writer of this school (we abstain, for obvious reasons, from mentioning names) evolves his notions on art strictly from his inner consciousness, and even glories in being able to cast aside every restraining influence of experience or previously acquired knowledge. Poems, statues, pictures, musical pieces of all kinds, are praised not for any intrinsic beauty, but for a correspondence which the critic finds in them to some idea of his own. Correspondence with nature is, we are told, unnecessary; correspondence with truths of life and emotion is trivial. What is required according to one of the most unmeaning of the school is solid, sensuous character.' In so many words it is gravely maintained that the mission of art is purely a sensuous one, and the poet Shelley is by the same writer quietly degraded below the level of Keats because he introduces intellectual and spiritual ideas into his poetry. The truth is that this branch of human interest has fallen into the hands of cliques, who either degrade its meaning, or are at the best ignorant of its principles, and we should gladly listen therefore to anyone who, having real and practical knowledge of art, shall endeavour to give us real teaching on the subject. The majority of artists stand quietly aloof, content rather to do than to talk, and unmindful alike of the censure and the blame of those ordinary newspaper ignoramuses' who pass judgment on their works. But every now and then it happens that an artist, bolder, more thoughtful, or more antagonistic than his companions, lays aside the brush for the pen, and lately we have had two notable instances of artists who have formulated their principles of art with considerable emphasis and distinctness. These are Mr. Seymour Haden and Mr. E. J. Poynter, R.A., the first of whom has given us a wondrous encomium on the power of the
1 Ten Lectures on Art, by E. J. Poynter, R.A. (Chapman & Hall). Whenever throughout this article reference is made to pictures, the work or works in question have been carefully studied in the original.