The herald., 1897-04-20


list. Twenty-nine out of the fifty were
once supplied by private companies.
There are 20 duplicate and triplicate
plants in 25 cities. among which Los An
geles is rated with three companies. In
the ten years prior to 1891 promoters and
parent companies, however, have been
active in constructing private works.
one parent company controlling nearly
40 local companies, another some 25 or
30, and several others from two or three.
to ten or thereabouts.
From the above review II will be seen
that among American water companies
competing plants play scarcely any fig
ure. There has been some competition
and consolidation, but wtaer system
of any size has shown itself to be one of
the most complete of natural monopoles
and almost defies competition.
Statistics referring to water works
franchises for the regulation of rates and
purchase of the works by the city show,
so far as mere figures can, that the ma
jority of our cities and towns have been
so anxious to secure water that they
have not protected their interests IN
granting franchises The facts present
ed in connection with this phase are of
unusual interest, o<ing to their bearing
upon important and practical subjects
of especial value to Los Angeles.
We find that 9S out of 391 franchises
are for more than thirty years; 1853 are
for twenty years or less. In all the
northeast, middle and Pacific states
twenty to thirty years franchises are IN
the majority, while of all the fifty years
franchises reported one-half are in the
Pacific states. Out of eighty-one COM
panies provisions to purchase have been
made. of which six are at cost, five fo-
price named in franchise, seventy, or
nearly all to be arbitrated.
REVENUE AND PROFIT
Statistics on revenue and profit on
water works. whether public or private,
are not easy of access, and such as APP
pear in print can only be used for COM
parison's sake, as conditions, local and
otherwise, vary to a great extent; the
cost of the works, as compared with the
revenue derived therefrom, depends al
together upon individual circumstances.
The only reliable statistics relating to
revenue derived from waterworks refer
to those from public works, and as these
are operated purely for the public good
cost, without thought of profit. their
gross revenue is at least from ten to
thirty per cent less as compared to those
of private enterprise. Even at these
figures the comparison between the rev.
enue derived from waterworks and rail-
way bonds or stocks has been shown in
favor of the former as Z is to AS. The
difference is, however, that there is very
ta1~x -f,rslr-
ital account. while there is a good deal
in the railway capital account, even in
California.
The revenue account may safely be
estimated on the basis of the following
comparative rates as collected for the
group of Pacific coast states, namely
first by the percentage of revenue to
the cost, which is extraordinarily uni
form throughout the United States, and
amounts to 9.29 per cent. which, for the
estimated costs of our present require
ments of approximately So. 500 900, would
amount to 1925, $50; second, by revenue
per head on waterworks, which in the
Pacific group amounts to S66S, and on
the basis of present 100000 heads, would
indicate the return of $66S 900; third, by
revenue derived per tap, which, in the
but appears in the statement of the Los
Angeles City Water company as but
S25. so for this city and on the present
II $50 taps would indicate a total revenue
of $702 075. on the basis of the former
and as $4Ss.971 on the basis of Los Ange-
les City Water company's stock; fourth,
by revenue derived per mile of main.
which, in the Pacific group, furnished
4ha foura e1S2S nor r1iIa md on the ba-
sis of the present $40 miles. assures US
OF an income of 1924, 92O. This latter fig
ure is by far the safest to assume, as sta
tistics gathereGin reference to revenue
based on miles of pipe in operation, give
a startling uniformity in the United
States, and averages for the United
States $500 against $1Sss of the Pacifie
group. This sum of $6250O0 is fair
average of the comparative estimate
and it is safest to estimate upon for this
plan; however let US accept the sum
of $4,000 as rendered by the present
vaterworks as a probable future rev.
enue to be derived from present require
ments in our computations. This will
enable us to present the following finan-
oial statements;
The cost for a complete water system
for this city on the basis of an estimated
241, 900 population is S4, 462 900; for pres
ent requirements, s3, $780, ,OOO Assuming
that S3, 500 coo were expended in carrying
out this plan we would at once be placed
somewhat in the following circum-
stances: $S,5OOOOO at AZ per cent inter- !
est would have to be paid as follows:
Sinking Yearly |
Year Interest. fund. total !
First year AZ per
cent interest on
$S.500,O00 ........ $50, 800 sS7,500 s2i5,00O |
Fortieth year, az
per cent interest
on SS7. 800 ....... 3,937 $3.50 81 437 |
Or an average annual payment for
interest and sinking fund of........ $l6S, 200 |
Maximum yearly running expenses
as above estimated for present re-
qurements would be.....-.......... 102,200 |
Which would give a total yearly
expense OF .....-s.......+...--,....Sz Sztv,4cO
One more item would now come under
that is. to make yearly
provisions for another sinking fund to
replace in about forty years part Of the
deterorated system by entirely new
pipes, new machinery, etc.
The lease of life of cast-iron on water
works is now subjected to a shorter term
than formerly, electrolysis caused by
ground wire connection of the electric
power plants situated within, the city
limite seems to attack the iron, gradu-