, telegraph, telephone, and messenger
service, are all necessities to our modern civilization.

The absolute necessity of a public water supply, and the practical
impossibility in most cases that any competition in the furnishing
thereof can be established and maintained, have led, in the case of most
of our large cities, to the work of water supply being undertaken by the
municipal authorities. But many of our smaller cities have entrusted to
private companies the work of furnishing a water supply. While this is a
case of real monopoly, yet under the conditions which may be enforced,
most of the power for harm is taken away. According to the best plan in
vogue, the city sells the franchise for constructing the works to the
company who bids to furnish water at the lowest rates under definitely
specified conditions, the franchise being sometimes perpetual, but
oftener granting to the city at some future date an option for the
purchase of the works. It is to be particularly noticed that this is a
case in which the administration of an absolute monopoly has been
entrusted to private enterprise with excellent results; a fact which may
be of use to us in our later investigation.

While the fact was early appreciated that a water supply when once
introduced became an absolute necessity, it was not recognized when
illuminating gas was first brought into use how important it was to
become. Franchises, or more properly permits, for erecting works and
laying mains for supplying consumers were given away to hastily formed
companies; and even at the present time there are but a few cities (only
five in the United States) which own their works and mains for supplying
gas. As a matter of course the gas companies saw their advantage.
Knowing that gas once introduced was a necessity at almost any price,
they made no move toward lowering rates as new and cheaper methods came
into vogue and their output and profits increased. The stocks of our
gas companies have been swollen by enormous amounts of water, and upon
this fictitious capital they have continually paid enormous dividends.
At one time there was a great call for competition in the gas business.
The public demanded it, and as usual the demand was supplied. Rival
companies were organized, and the city authorities made haste to grant
them permits for laying their mains in the city streets. A war of rates
of course ensued, and lasted till one company gave up the fight and sold
out