Arizona republican., 1900-07-20
THE RESERVOIR BONDS
Expression of Views by We'll
 Known Citizens
Many Reasons Advanced Why the County Should Encourage Reser- voir Construction and None Why It Should Not.

| of the county for a half million dollars ! as an expression of good faith in the matter of the construction of a storage { reservoir, aroused a great deal of i comment yesterday. It was altogether favorable, since the proposed plan in wolves no risk to the taxpayers and seems to be the most practicable pro- i ject for the bringing of a reservoir into early existence. A necessary pre- liminary, of course, would be to obtain the consent of congress to an issuance of the bonds, but that would be easily
 obtained, once the taxpayers had agreed upon the desirability of the is sue.
 Probably the man most thoroughly familiar with all the details of the stor age problem is Sims Ely. the secretary and treasurer of the Hudson Reservoir company. When asked yesterday for an expression of his views on the bond ing question, Mir. Ely said:
 'I think it more important that you get an expression from the leading tax payers, property owners, and the men otherwise the best qualified to voice public opinion, since this is a question for local decision. During the past year my time has been so closely occupied with the affairs of the company and with other work, that I am not in the best position to state the views of the community. As to the company the question of a subsidy is a new one, en- tirely, and although 1 am in constant communication with MT. Henry H. Man, our president, we have never dis cussed the possibility of gettingi the county to aid the proposition by an issue of bonds. It is not difficult. how ever to discuss the topic from a stand point of common sense. It appears to me that The Republican editorial is timely, forceful, and logical.
 T believe that storage is coming, be- lieve so most profoundly; otherwise would not be devoting the best years of my life to the proposition. But l have no doubt that complete success would come sooner through the method that you propose. The fact that the reser- voir company does not operate with d brass band, and that there has been no occasion for. keeping our affairs before the local public. may have created the impression that MT. Man, his associates, and myself have not been duly cner- getfc and that we have an easy job in promoting the enterprise. Such an inn pression would be dispelled by a knoWl- edge of the enormous amount of work we have had to do and are doing, and the obstacles with which we have to contend. The residents of the valley know that it would be difficult to ind another industrial enterprise of equal merit in the United States, and 1t doubtless seems strange to them that intelligence and energy do not accom- plish the speedy success of the TOnto reservoir. But the facts are that the investing public is largely ignorant of Arizona and the peculiar conditions prevailing in this valley, and it is dl1l- cult to presuade them to come out ana investigate on the ground. Always and everywhere one finds the belief that most reservoir projects have been fall ures, and to our detriment the mlS- guided enthusiasts who believe the government will build reservoirs are quoted against private investment. We know, of course, that here in this val ley there is a unique situation, without a parallel elsewhere in the world, namely, a great valley already settled and ready and anxious to pay for stored water; but the difficulty is Tn getting investors to see the situation as we here know it to be. As d matter Cf fact, when truthful statement IS laid before the investor it is natural Tor him to ask if it is such vital thing to the Salt River valley and If 1t Is Such an extremely attractive investment why do not the local public take share in it?'
 Should Maricopa county vote to eN- change her bonds to the extent of nall a million dollars for a like amount ot preferred stock in the reservoir com pany. I have no sort of doubt that such procedure would accomplish the inn mediate success of the reservoir.
 From the standpoint of the taxpayer the question is simple. It is problem in arithmetic and dollars and cents. The reservoir, the day the dam is fin ished, will begin irrigating at least 250,- GOO acres at not less than $1 per acre per annum. Within a year after the dam is finished an additional 2OOOoO acres will be under irrigation, with no less revenue per acre. Here is d gross annual revenue of s45O,OO0.
 But let calculations be confined to a revenue of $250,000 per annum. From this sum should be substracted the nominal cost of maintenance and the cost of operation, which should not exceed $25 900 per year. We have then S225, ,0O0 applicable to interest charges and dividends on preferred stock. be- fore the common stock is considered. Say there is a bonded debt of $2,000, 900 ahead of the preferred stock, assuming a construction cost of $2,500, ,000, and that the bonds bear five per cent in terest. This means an annual interest charge of s100,O0O to be subtracted from the net revenue of $225, 900, leav- ing $125,000 for stock dividends. Say that the s5O0,O0O preferred stock is en- titled to a per cent dividend, and the county would receive each year $25,O00 in dividends. while as interest on its s5OO,0OO of per cent bonds it would pay out $2O,0O0 a year annually.
 Actually, it would be a splendid in vestment for the county, if there were no stock equivalent. The $20,OO0 per year interest charges would mean an increased taxation of only two mills on hR S10 000 Ina ton