6 MARCH 1880, Page 7

MR. CROSS'S WATER BILL. T HIS Government, with its mechanical majority,

could, we suppose, pass anything ; but we doubt if, without the aid of this majority, Mr. Cross's Water Bill can be carried. Its original idea is a sound one, and we give the Home Secretary every credit for his courage and his breadth of view ; but he has gone too far in conciliation. It was wise to supersede all the Companies by a single concern. London wants better water, a more constant supply of it, and a lower charge for it, and the Eight disunited Companies now in possession of the monopoly neither could nor would give what the Metropolis required. They have done very good work in their time, but they naturally think of their Shareholders first of all, and will continue to do so. To fuse them all into one body, con- trolled by the Ratepayers and Parliament, was therefore indis- pensable; and Mr. Cross in his proposed Bill has done this. His new Water Trust will be the sole Water Company of London, and though managed by paid chairmen will be dominated by re- presentative members, one of whom will be elected by each London borough. We do not, we admit, see why the Metro- politan Board of Works should not have been appointed the Water Trust, why London should be bothered with any more elections, or why Mr. Cross should expect good men to undergo the worry of a great election merely for the pleasure of sitting on a Water Board ? We should much rather expect to see men sent up solely to bring down the water-charges, which are prepos- terously high, and are resented with a bitterness of which Mr. Cross has no idea ; but we will let that point pass. The Home Department, however, has probably some reason, not explained in Mr. Cross's speech, for passing a slight upon the Metropolitan Board, and at all events, the powers of the Water Trust might hereafter, when the organising work has been done, be trans- ferred to that body ; while in the interim, the Trust can be censured, and advised, and controlled. But there is another and a more serious objection to the scheme.

Mr. Cross started on his enterprise with a resolve, natural to a member of a Government unwilling to "harass interests," to acquire the property of the Water Companies by agreement. He would not, he said on Tuesday, expropriate their businesses, first, because he feared their resistance ; secondly, because he distrusted arbitrators, who might involve the Trust in in- calculable payments ; and thirdly, because he wanted to avoid the subsequent claims always made when expropriation Acts come into actual working. There is sense of a kind in those arguments, though they show that the State is growing a little weak in the face of the "Interests ;" but it is sense which requires to be controlled by this condition. —that the community suffer no excessive loss. We fear it is going to suffer one. Mr. Cross is good man of business, but the astute and experienced gentlemen who con- trol the Water Supply know the market better than he does, and their demand, which to him seemed fair, turns out to have been an exorbitant one. They have asked for their Share- holders as much income in 31- per cent. Water Stock, guaranteed by the rates of the Metropolis, as they receive from their present shares, and Mr. Cross has agreed. The share- holders, who own eight millions in shares, are to obtain, first and last, £31,000,000 in Water Stock, paying 3i- per cent. The consequences of this enormous concession, which, in fact, takes no account of comparative security, were instantly visible in the price of shares. They rose and rose on the bare rumour, rose sharply when the rumour was verified, and till the Standa? d, a journal naturally and instinctively favour- able to Mr. Cross, published, on Friday, this extraordinary :—

1879. March, 1880.

Lambeth Waterworks 153 281 West Middlesex 137 196 East London 151 289 Kent 210f 336 Chelsea 153 242 Grand Junction 82i 138 Southwark and Vauxhall 110 278 Average 149 241

There has since been a severe fall in one or two of the companies, but the average effect of the measure has been to give every shareholder full value, and about £75 for each £100 of his shares over and above. Could there be better evidence that the bargain is too liberal? We are not, be it understood, of those who are hostile to liberality in these great bargains. It is quite fair that a man who, for State purposes, is deprived of the pleasure of owning anything should receive a moderate bonus in addition to full value, and when such an arrangement is to be settled voluntarily, the bonus is sure to be a good one ; but £75 per cent. is a little too much. The shareholders would have been satisfied with £25 per cent. That difference is very im- portant, too, for if the Water Trust pays too much, it will have no margin for improvements, and as improvements are sure to be asked for, and indeed ordered, by those who elect the Trustees, that patient Issachar, the London ratepayer, will be taxed again. Besides his water-charges, already too high, he will have fourpence or sixpence in the pound to pay for better water and a constant supply, which, but for this blundering, he might have obtained for nothing. The House of Commons may think that a matter of no import- ance, but Issachar is getting decidedly tired of these demands, and if he gets angry, there will, sooner or later, be a bad quarter of an hour for rent-receivers. Lodging costs £10 a year per room now, and if that is to, increase, we shall have the Berlin or Paris tone of sentiment about landlords.

It may be said that the price of the Shares is not quite a fair test, as an excited market may be buying too dear ; and if Water Stock were a foreign bond, we should admit the force of the objection. But Water Stock will be exactly the same as Metropolitan Board of Works Three-and-a-Half per Cent. Stock, identical in rate of interest and in security, and the Stock Ex- change knows the value of that Stock to a penny. The dealers are quite certain not to be entirely wrong, though they may overrate a particular stock, and as they have sent up the whole Stock to such a high average profit, we may assume that the value they fix approaches the value the public is disposed to pay. If that is so, Mr. Cross has been extravagant, and his Bill ought not to pass, even if he threatens not to remain Home Secretary. He is a very good Home Secretary, the best, per- haps, we have had ; but ten or twelve millions is a very long price for London to pay, for the advantage of retaining him.