The San Francisco call., 1897-03-10
SUPERVISORS DID NOT INSIST
y. ON ADVERTISING DETAILS
The Water Company's Attorney Gave Acceptable
Reasons Why They Should Not Be
Made Public

compaRy's valuation was capital stock.
Mr. Schussler here volunteered to state
the facts of the consolidation as be under
stood them.
There were formerly two water COM
panies i'll existence-the one, the old San
Francisco (or Bensley) Water Com pany.
and the other the Spring Valley Water
Works Company. The former had thirty
or forty miles of pipe in the City; an
aqueduct from Lobos Creek to North
Beach; a large pumping station and
reservoir on Ocean Hill. The Spring
Valley Water Works had several thousand
acres OF land in San Mateo County and
some valuable springs.
They had also constructed pipe line
into the City two miles In length and
reservoir near the AlmshOuse for little
over $500, 600. Many miles of pipe were
also laid in the streets OF the City. The
Benslev Company, finding that the Spring
Valley Water Works enjoyed br ghter
future owing 10 the fact that they owned
better springs and watersheds. consol-
Idation was effected In 1868
The two companies when consolidated
were incorporated for $6,O00,000 10000
shares at $i00 each. Business was very
slack at the time this was effected. The
company encountered great deal of OPP
position from legislative action and sew
eral newspapers. & depression in the
stock resulted which fell as low as $50 and
$60
This depte ssion led many people to be-
lieve that the shares at this time were only
worth So, coo, 900, but they were actually
worth more, because the company pos
sessed the basis of future development.
The City had employed experts TO dis
cover the original cost, and ne believed
that these reports were on file. With re-
gard TO the value OF the land the company
had already given the committee some OF
the most important purchases made
within the last ten years; as for example
the CaIaveras and Alameda Creek water
rights, the Lake MERGED watershed, etc.
Supervisor Smith wanted to know
whether the company placed any valua-
ton on the real estate they had pur-
chased.
Mr.. Schussler said that the water was
the most valuable portion of the real
estate. Real estate, improvements and
the water were placed at certain figure,
and these three were included in the con-
soi6atiou. Supervisor Smith could easily
find out the valuation by referring to the
Assessor s accounts.
We are mere to find out" observed
Supervisor Smith, dryiy.
That's right quite right" responded
Mr.. Schussler, cheerfuliy.
DR.. Rottanzi put numb of questions
having for their object the determination
capital to-day. Suppose" asket he,
upon an investment Of $10,000000 you
paid per cent instead OF per cent, would
you add the diffel ence of $780, 900 TO the
capital invested?'
Mr.. s mes said that interest was not
added. II 5000 shares were sold he capital
stock would be increased to $500, 900.
Then" reioined Rottanzi, your method
OF computing to-day is d diffeTent from what
it was formerly 2?
That said Mr.. Ames, 81 cannot tell
YOU" The divide nds, he added, were de-
clared by the trustees from time to time
and had nothing to do with the capital
stock. Mr.. Ames, replying to the MAYOR,
said that the stock had recently declined
as low as 90 and SO and possibly lower. 1t
was selling now al So.
The stock, then, remarked the Mayor
''soon recovered. 1t is very elastic. If it
we're permanently guaranteed per cent
do you think 1t would sell at the same
price as to-day?''
Il suppose that if the stock was guaran-
teed for ten or fifteen years 1t should be
par stock"
Mr.. Schussler interposed to say that this
could be depended ON if the Supreme
Court would specify a reasonable rate of
interest instead of leaving the matter in
the hands of the Board OF Supervisors.
You could appeal from the board
rate"
Mr.. Schussler insisted that the contin-
uaI necessity OF appealing to the Supreme
Court would work great hardship.
The Mayor asked Mr.. Ames If, in the
event of the City desiring to purchase the
works, the company would expect to re-
ceive not only the present va'ue as COM
puted by competent experts but the ac-
cumulated interest as well.
Mr.. Ames said the interest was deducted
every year Everybody sought 10 realize
some profit on investments. Suppo sing
through some accident the interest fell
temporarily from to 2 per cent, then it
would only be fair to make an addition OF
per cent.
The chairman reverted to the original
question as to whether the company could
give the committee an idea of The present
value of the company's property.
Mr.. SchussIer regarded The present stock
and bond valuation of SO. 000 900 az entirely
insufficient, for the reason that it would
cost more than that to construct similarly
equipped works of the same capacity and
possessing the same facilities for future
increase. All property had increased in
value since the con- pany early purchases,
as was shown by the fact that they haG
often had to pay $1,000 for land which they
could have formerly purchased for 500.
''If the City constructed works and
brought water from other sources" asked
the Mayor, what could you sell water
for?"
Mr.. Schussler replied that the company
could sell water more cheaply than the
City.
But" the Mayor pointed out, "the
City would not be in it TO make profit"
Mr.. Schussler rejoined that all cities
were in for profit.
Suppose we cut rates one-half. You
rould not afford TO foil low 2n
1--WE would have to dispense with ex-
pensive items. such as pumps, etc. l don't
think the City would agree to force water
400 teet nigh as we do now. That is the
luxury we throw in besides the water"
"If you gave up your business what is
the value of your land, meters, pipes,
buildings, etcP"
THAT'S such wonderful question l am
not prepared TO answer 1t. We are not
going out of business" New York, said
the witness, made the householder nav
water tax, which when taken into con-
sideration raised The real rate consider
ably.
The Mayor suggested the possibility OF
the City introducing water from the |
Sierres. Wouldn't that reduce your
rates ?" he asked. !
NO" replied Mr.. Schussler, 'for the
sim ple reason that you cannot do any,
thing OF the kind. What's the good of
putting a hypothetical case" The Castro
Lake water, he said wasn't fit TO drink, |
and if the City tried to get water from
Lake Tahoe the Nevada people would say
som ething.
The Mayor continued in his vein OF
playful badinage, conjuring up a vision OF
sha rehoIders Smltten by pareSis and COM