The Portland daily press., 1890-12-17
Facts that are Wanting.

Ii the commission appointed by the city
government to investigate the question Of
water rates, have not ascertained all the facts
needed for correct Judgment as to the rea-
sonableness or unreasonableness of the pres
ent rates it is no fault of theirs. AS we
pointed out some days ago the
facts about the rates in other cities
are not sufficient for this purpose, in
asmuch as the agreement between the water
company and the city expressly provided
that In fixing the rates due regard should be
given to the cost and income of the wo ks /,
and the cost and income of the works are ex-
clusively in the keeping Of the water COM
pany and cannot be ascertained except by
Its cooperation. The commissioners have
shown that the Portland rates are higher
than those in many other cities Of similar size
and situation, but it does not follow that
therefore they are unreasonable within the
meaning of the agreement with the city. To
determine that it is necessary to determine
three things besides the difference in rates
between this city and other like cities,
namely: first, the meaning of the word cost
In the agreement; second, the amount of the
cost in dollars and cents; and third, the in
come OF the works. The water company
has furnished the total amount expended in
construction, and If this is fair interpreta-
tlon OF the word cost In the agreement, then
1t has perhaps furnished the cost as far as
II was bound to do under its agreement.
But If this is not fair Interpretation of the
word cost in the agreement, if, as the com
missioners incline to think, in ascertaining
cost fharQ ha a
penditures incurred in replacing pipe inner
fectly laid In the first place, then the cost
cannot be ascertained EXCEPT the amount of
this expenditure can be determined, and it
cannot be determined by any statement yet
furnished by the water company. We think
the commission is right in taking the ground
that the sum spent in the first construction,
or for so much of it as had to be replaced
should be deducted in order to ascertain the
cost of the works that the agreement permits
to be taken into consideration in fixing the
rates. We do not believe it was ever contem-
plated by the parties to that agreement that
the company might charge rates high enough
to return liberal rate of interest on every
oonar that might be spent by the company
IN bringing an adequate supply of water
from SeDago Lake to the city of Portland.
We DO not believe that the agreement con-
templated that the company might reckon all
the money 1t wasted by reason of the selec.
ton OF improper material or the imperfect
laying of its pipes as cost to be chargad n
the consumer But apparently that ia ybot
the company has done and Il doing Ifo
man builds mill and puts in inadequate or
imperfect machinery, and by reason of its
inadequacy or imperfection is compelled to
take 1t out, the loss falls upon him. If he
should undertake to add it to the price of his
product and so make the consumers pay for
1t, the competition of other mills would soon
compel him desist or go out of the bust
ness. Ii the Portland Water Company had
competitor, the money which it spent In
laying imperfect and inadequate pipes would
soon be charged off to profit and loss. Hav-
ing no competitor and dealing in an article
that people must have, it has the power to
make the people pay for its useless expendi-
ture. But might does not make right
If then the cost of the works contemplated
In the city's agreement is not, as the water
company appear to have assumed in their
answer to the commissit ners, the total
amount of money speAt by the company In
constructions of all sorts, but only the
amount that would have been necessary to
Duiid the works as they now exist then the
company has not furnished the commission
WIN the cost of the works, or with any data
IRON which that cost eau be computed. and
therefore nave not furnished one of the ele-
menus absolutely necessary to determine the
reaSonaoleness or unreasonableness of their
rates. -
The third element needed to determine tho
reasonableness of the cOmpany's rates IL , tho
income of the works. By some process ~