The morning call., 1893-03-11
THE WATER RATES
A Policy of Justice Advo-
Gated.
WHAT THE COMPANY ASKS.
Why Savings Banks Accumulate
Their Enormous f1oards and Legit-
innate Enterprises Languish.

tunly oil proving Wnetner It's actions are 10
be governed by a spirit of fairness and
justice to corporations and individuals or
whether i. is to allow its judgment to be
swayed by popular prejudice or by tile
exigencies of political manipulatiOns.
The Board of Supervisors OF the city and
county of San Francisco has vast powers
committed to it. 1t is in large sense judi
cial body; a court Of last resort. Its respon-
sibilties are therefore great and its de-
csions are potent for the welfare or other
wise of the whole people. No body of men,
not even the Legislature of the State, has
more intricate questions to adjudicate.
AS the representatives of the metropolis
of the coast it must take a broader and
more comprehensive view of the affairs 1t
is compelled to consider, and not one aspect
of a question which comes to it for "A de-
csioD, but from all sides, and consider
the general effect of its decisions upon all
corporate interests and upon all classes of
people.
The duties devolvng upon the Board of
Supervisors of San Francisco are those
which demand statesmanlike abilities and a
dispassiOnate Judgment in the treatment of
questions to which its attention is called.
II must consider the probable consequences
of Its ordinances upon the community In
general; whether or not their effect will be
10 encourage the investment of capital
whereby labor will ind employment ana the
prosperity OF the community be advanced
or whether capital will be harassed or dis
cOuraged by its actions. Industrial projects
may be driven to other and mora plant
Localities by policy Of illiberality and the
great army of the unemployed may be de-
creased or augmen ted by its actions.
1t Is fair proposition that every cause
has more than one side to IT, However
much political clam0r may seek to obscure
the real issue there always remains an ele-
ment among the people which will wait for
the whole facts before deciding upon dis
puted question. This conservative element
IS after all more powerful in its influence
upon public affairs than all others combined.
II cannot be Ignored by any political party.
II has the best interests OF the community
at heart and its opinion upon public ques-
lions cOmpelS acknowledgement
AN IMPORTANT ISSUE.
What rates are to be fixed by the present
Board of Supervisors TO govern the charges
Of the Spring Valley Water Works for the
next two years is undoubtedly the most I'M
pOrtant question calling for decision dur
ing their official term. Their exhaustive
consideration of the subject since their
qualification TO Office and the patient ex-
aminatiOns which have been conducted of
the experts and officials OF the company in
dictate audable disposition 10 probe for
the facts, and in their efforts they have
been Loyalty supported by the Spring Valley
Company, which has nothing whatever to
conceal. and which only asks a just appre-
citation Of its efforts 10 supply San Francisco
with an ineXhaustible and palatable water
supply and lair return upon the necessary
investment which has bsen made Ia order
TO secure desirable results.
The liabilities of the Spring Valley Water
Company consists of $1,000 900 in bonds
drawing an average of Az per cent interest
and a stock liability OF 81, 600 coo. upon
which it seeks to pay a dividend of per
cent. The stock Is owned by 100 persons
IN all, and 800 Of these stockholders own
100 shares each. or less.
NO WATER IN THEIR STOCK.
Tot one Of the present stockholders las
eUer acquired share Of stock for lcHich
he has paid less than par cdiue.
1t IS further to be noted that the stocks
of the company and most of the bonds are
held by local investors. 1t is purely a DO
nestle enterprise, and only San Francisco
citizens are interested in its fortunes.
The statement of the financial affairs of
the Spring Valley just submitted shows
that having to pay low interest upon its
bonds and dividends Of but per cent upon
Its stocks, an actual deficiency of over $500
for the year has confronted it as the result
OF its operations for the year.
No claim is made of the eXtraYagance of
the management, neither has any extra
ordinary expenditure for Interior purposes
been necessary.
The fact remains, however. that deficit
OF $500 and over exists as the result of its
business for tile past year-the logical dir
ference between the income and expendi-
lures.
PERTINENT QUESTIONS.
How then can a claim for reduction of
Spring Valley rates, which will further re-
duce It's income, be logical OF just? What
will be the legitimate result on corporate
enterprises II such reduction Is madeP
Can a dividend OF per cent on stock or in
terest OF AZ per cent paid OH bonds be re-
garded as eX0rbltant?
As shown by the EXPERT Of the company,
the cost of the Spring Valley property is
actually SlL50QO00. 1t is bonded and
stocked for Sd, Geo. 600. a difference of lust
S3j00000 between cost and liabilities, repre-
senting an advance OF less than 20 per cent
upon its purchases made in the last fifteen
years. The real value of property ought to
be estimated not upon its cost but upon its
present value, be il more or less How alb
sHTd would be considered proposition that
would limit the rents to be derived by a
pioneer purchaser of a Markei-slreet lot
who may have bought for $500 what NAV
now be worth as many thousands? and,
vice versa, how many owners OF real estate
are compelled 10 accept rents which may
pay them but the ordinary expenses upon
property bought in flush times without
counting interest on first investment?
THE PAST MANAGEMENE
Certainly the actions of the owners OF the
Spring Valley Water Company of ten or
fifteen years ago ought no; TO operate to the
prejudice Of those persons who control the
stock at this lime. Present stockholders
paid par for their stock on an assurance
that they would realize 6 per cent on their
investment, and that their moderate divi-
dends would be continuous.
Why should the equities of present stock
holders be menaced by considering the acts
OF their predecessors OF ten or fifteen years
ago?
Why should such a gross Injustice be
sought to be perpetuated, and, further, what
is a fair system upon which to base the rates
which the Spring Valley charges?
The Board of Supervisors have TO con-
sider the effect of hasty decision of n re-
duetion OF rates OF the Spring Valley upon
other corporate interests, and it well NAV
hesitate.
a reduction of present rates. with no in
crease OF iDcOmei in prospect, will compel a
decrease OF the dividend rate. The stock
becomes less desirable and is thrown upon
the market, the proceeds to be deposited in
savings banks. which offer low rate, TO be
sure, but one that is liable to continue not
being subject to the interference of public
boards
ENCOURAGE LOCAL ENTERPRISE.
But the principle Of discouraging the pub
lie from investing in local enterprises
means that no Investments are to be en-
couraged which attract the moneyed class
and secure the employment Of the idle, but
rather, that the principle OF boarding money
In sale repositories where 1t will rust away
without doing good 10 the general COM
mmnity Is to be the policy of the board.
Certainly the accumulation of $500, OO0. 600
in the vaults OF the savings banks is not |
feature that is at all encouraging to anv
one who stops to consider the effect of snch
hoard on community like this. These
banks offer from to per cent for deposits
On an assurance OF practical safely. Their |
deposits are Invested on bond and mortgage
and do not adYantageously effect industrial
enterprises or afford employment to the
poor. The deposition buries bis money In
the banks because he has reasonable as
suranee that 1t will be safe. This 5000 OO0,- |
000 does not. therefore, represent the accum-
ulations of rich community, but rather rep
resent the principle of man who having |
yauables, hides il in a safety deposit vault |
where it does but little good TO himself and
is OF small value to the general community
In Which he lives LII a chanlanl a.. |