Los Angeles herald., 1892-02-16

cesaity, it is one of those necessities
which are expensive in this arid region.
The first objection is then that the
price asked, i. e., SO. 500, 600, for existing
properties of the city water company is
too much There is but one way to de-
termine that. Can the property, or one
answering the same purpose, be created
by the city, or any private corporation
in the interest OF the city, foi any less
sum? The estimates Of the city engi-
neer, which do not pretend to cover in
detail more than three fcurths OF the
territory now covered by the city COM
pany, places the cost of building these
works at sum greater than is asked
for all existing sources and facilities OF
water supply. Bear in mind, this ques-
tion cannot be answered without con-
stantly keeping before you all the cir
cumstances and conditions which sur
round it. At no time, and under no
circumstances, will the city of Los An
geles ever be properly supplied with
water at less cost for the whole plant
than $4,000, 900, and if the city built the
works they will cost a great deal more
than that.
1t is hardly necessary to argue further
the question whether, if the city could
legally issue $3,000,000 bonds, could it
sell them? 1t cannot refund its out
standing debt of over $700, 600 at per
cent. Less than 100000 of the 5
per cent. bonds have been taken
by the local bankers, but no foreign
investor has taken one dollar at that
rate, though the bonds have been on
the market over year. But it is fair
question to ask, as one OF the circum-
To-, ,.,<~
US, whether the people would vote
$4,000, 900 of bonds, or even So 900, 900,
to be expended through political agents,
ward workers, ETC., in building water
supply system, the whole OF which
would be buried under ground and out
OF sight, SO that no one would ever
know whether properly done or not.
But, if they were to vote such loan,
what would be the consequence? The
interest would have to be paid during
the three years employed in construct
ing the works, for no one would think
of beginning work OF this kind with
only part of the money in sight.
Interest on the So, 100000 at per cent
would be 100000 per year. The law re-
quiles the payment of one-twentieth of
the principal each year, which would be
100000 more, making total of $780,
900 principal and interest which would
have to be paid by the people, without
any returns whatever. But while they
would be paving this they would have
to pay not less than $3.50, 900 per year to
existing water companies, or q total in
the three years of 81 1,050,000. and they
would then owe 81 ZOO, 900 of the princi-
pal, making the works cost them when
ready for operation total of $3,410,00O;
but as it is we'll known that the works
could not be constructed under the most
favorable circumstances for less than
SO, 900, 900, how would the account stand
when the works were completed and
ready to supply the people with water?
The interest and sinking fund for three
years would be $953.000, water rates,
paid to existing companies, $l,710,00O.
making total outlay OF $2,663, 900, and
leaving principal unpaid of 81, 300, 900,
which. added to the amounts previously
paid, would make the grand total of s5,-
212 900 as the cost of the system of water
supply, not equal to that which we
have today, to say nothing of the cost
of additions. And that would not be
all, for seventeen years after taking
charge of the works the people would
have to pay an average annual interest
of $4,000, a sinking fund account OF
$l50,000 per year, total of $226, 900 cav
erage for seventeen years., add to this
cost of operation, 100000, and the av-
erage yearly outlay would be $4,000,
though the heavy interest payments
would fall due during the first part of
the time. To illustrate: The interest
on unpaid 2,550,000 would be $153, 900,
sinking fund $15O,00O, operation $780,
600, total $403, 900, for the first year
after the works are put in operation.
have added nothing for extensions and
repairs either during construction or
afterwards, but | assume that during
the whole period of construction enough
water rates could be collected to cover
such expenditures; though human ex-
perience has been to the contrary in this
country in the management by munich
palities of water and lighting plants.
The rates charged for water would not
be increased by the city, but the de-
ficiency under political management is
always found on the tax duplicate. If
you want first class illustration, please
investigate our zanjas.
Now let us look at the other PROPOSE
tions, i. e., that is the purchase and con-
solidation OF the present systems, their
extensions and improvements, upon a
plan agreed to by the city and company,
the whole total cost in no event to ex-
ceed "a, 900 900, what would be the cost,
and how would its burdens bear upon
the public? / have heretofore presented
some figures, showing partially the
practical operation OF such a scheme,
and l reproduce them herein. In these
estimates L have calculated upon ma
terial reduction in the rates to the
poorer consumers, which would carry
out along the line and make an average
deduction OF Is per cent in the amount
of revenue now collected by the various
water companies. But in order to equal
ize this matter and put the burdens
where they belong, making the rich
man pay his shore, | have considered
the necessity of levying tax sufficient
to pay for all of the water consumed in
street sprinkling and fire protection.
My figures are based upon the theory
that the company receiving the fran
chise would operate the works, and that
before the franchise should become
effective, the company would be re-
quired to give bond in sum OF not
less than 100000 to perform any and
all of the conditions OF the franchise;
and not only that, but that the fran
chise itself should provide that in addi-
tion to the penalty of the bond, viola
tion of any of the conditions would