The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-10-12


HILL or at the face of its stock and bonds
with 80 per cent. premium upon the former,
q large amount would remain for extensions
and improvements At the end of twenty
five years, supposing the debt to bear 4
per cent, the account would stand thus:
Bonds ...................... 50 500 900
increased hydranti rental at $4,000 -'''''''
per year ..-..-,.-.-...-......-.... l'oVo'Vo
The surplus earnings $3.50 900 per
year for twenty-five years.......... 6.500.000
Profit ........................... $500 900
Profits over Hord plan adding i'm
provement fund neutrality-suspicious.. 1,7l5,OOO
Taking from the surplus earnings of $780,,
600 100000 for interest would leave $3.50 900
to provide a sinking fund for the payment
of the bonds and for an Improvement fund.
An annual payment of S67 900 compounded
pay the debt and leave 1893, 0Ou ii year for the
Improvement fund instead of the average
of $l9.25S under the Hord scheme The
upon their investment. there would be no
need to resort to taxation and in all proba
bility the rates could be decreased long be-
fore the expiration of twenty-five years.
MR.. MASON'S SUGGESTIONS.
Appended to the committees report are
the suggestions made by A. l.. Mason.
These are embodied in the following:
With your permission 1 will, as citizen
and taxpayer of Indianapolis make some
suggestions which. seem to be worth con-
Sideration, in reference to the so-caled
Hord plan for the purchase of the stock Of
the water company. Mr.. Hord's plan con-
templates an immediate increase in city eX-
penses of $4,000 year, to continue for a
considerable number of years. This means
a corresponding increase in the tax rate
without any reduction in the prices of water
to private consumers. Inasmuch as the
present generation has borne the expense
of paving and SeWering the city of Indian
apolis 1t seems to be peculiar hardship to
further increase existing burdens, inasmuch
as the expected benefit will accrue to flu
ture generations, and not to those of us
who are here to-day.
AS MI Hords proposition requires the
city to pay nearly 81, 600 600 over and above
the value of the tangible property, it is an
important question whether the water COM
pany is entitled to require that the city pay
the value of its franchise as we'll as of its
tangible property. This question is to be
determined by the contracts exloLlng with
the water company. The ordinance of Jan.
3, 1870, contains the following:
months notice. the cty shall have H ei the right
tc purchase from the company all
the buildings, machinery and pipe of said
water works and all its corporate rights
and privileges (but not including any fran
chise herein granted or that may hereafter
be granted TO the. company, MOI. including
such price may be agreed upon by the
Common Council and the board of direc-
tors of the company. In case of disagree,
ment between said parties. the price shall
be ascertained by five disinterested persons,
nOnreSldentS of the city, two of whom shall
be chosen by the Common Council and two
by the board of directors of the company
and the fifth by the four thus chosen. Said
ascertained price shall be subject to the ac-
Ceptance or rejection of the Common Coun-
Gil. The company shall not be allowed to
sell to any person company whatever
without first giving the City Council the
refusal to purchase at the same rates as
offered others. Provided n
chase shall be made by the City Council
until the terms agreed upon, or settled by
arbitration. aforesaid, shall be ratified
by majority of the legal voters of the
city, at special election to be held for that
purpose SoO No.,,n :. .,,. ua,. 80.
tanned shall be so construed as to grant to
said company or it's successors any exclu-
sive privilege of constructing and operating
but the city hereby expressly reserves the
right at any and all times. to construct and
operate water works for itself or to char
ter another company to construct and oper-
ate water works in said city,
The contract of May 5, 1892. by which the
city agreed to pay $50 year rental for each
fire hydrant. contains the following:
Sec. g.. And it is hereby expressly under
stood and agreed between the said city and
company that the charter of said company,
being An ordinance authorizing the Water
Works Company of Indianapolis to con-
struct, maintain and operate water works.
and supply the city and citizens of Indian
apolis. defining their powers and privileges,
and prescribing their duties, ordained Jan.
3. 1870, which ordinance It is hereby ex-
preSSly understood and agreed is and shall
continue to be in full force in all it's parts
as against the parties hereto, except in so
far as as provisions may be modified or
changed by this contract. and as to any
such notifications or changes. they shall
only be effectual during the continuance of
this contract
Sec r. This contract shall be in force
from the LIST day of January. 1892 until the
first day of January. 1897. and thereafter
until new contract shall be made: Pro
vided, however That nothing contained in
this contract shall in any way affect the
right of the CITY. pursuant to the laws and
ordinances of the city, to purchase all the
buildings machinery and pipes and entire
plant of the said Indianapolis Water Com
nany. and all its corporate rights ana PRIV
My judgment is that both the spirit and
the letter of these agreements with the
company has no franchise to sell to the
city: and. therefore. ii is not entitled to be
paid for the so-called franchise value"
It has been suggested. as an objection to
the foregoing statement. that under the
contract of May :. 1892. the city or Indian
apolis bound itself to pay $50 year for
each fire hydrant until a new agreement is
made; that this practically binds the city
in perDetuty to pay this rental. and that
from this agreement there is no escape ex-
value of this perpetual contract in order to
obtain release for the city.
HYDRANT CONTRACT INVALID.
NV Judgment is that III the city has really
mace such contract it is invalid If valid
not only for the first five years, but for all
future time. it is, indeed, fortunate that
the city reserved the right in the ordinance
of 1870 to provide itself at any time with
its own water supply This reservation is
still in force and the city might abandon
the fire hydrant contract at any time
Furthermore. even if wrong in these
statements, the language of Section II, in
the contract of 1892, that nothing contained
in it should 'in any way affect" the right
of the city to purchase, is a substantial and
effective provision that the city, when IL
desires to purchase the water works shall
not pay any additional price by reason Of
the existence of the fire hydrant contract.
The fact is that the position of the city Of
Indianapolis with respect to the water
works is extremely strong Earnest efforts
have been made by city attorneys of former
years, who approved the contracts of 1870
and 1892, to protect the city against the
very thing which the Hord proposition in
wolves. namely. that the city pay the water
company for franchise which the water
company received from the city as a gift.
There are at least two ways In which the
city may acquire the water works without
increasing taxes and without paying for
franchise value. One is the method of APP
praisement and arbitration set forth in the
ordinance of 1870; the other is by the exer-
else Of the power OF condemnation or emil
neat domain. Whatever may be thought of
the provisions for appraisement and arbi-