The Worcester spy. [volume] (Worcester, Mass.) 1898-1904, 1901-12-24

correSpondlngly lessons the cost OF the
street service.
1t is also true that the condition and
amount of commercial business in this
city would be more favorable to the
success of the plant under municipal
control than in many cities of the
state. as the commercial business TAX
en- by the city, with the plant of the
Worcester Electric Light Company, is
relatively greater, when compared with
the street lighting, than that done by
many municipal plants in Massachu-
sets.
In Taunton, however, the ratio seems
to be very equal to that existing in
this city.
Taunton has 227 street lights and the
equivalent of 5946--16 C. p. commercial
lamps, while Worcester has 700 street
arcs and a commercial business of 10,
000-16 C. p. lamps
From data supplied this committee by
the officers of the Taunton plant, the
following facts appear
The plant was purchased July 1, 1897,
at a cost of $125,000. The investment
in the plant to date amounts to $l51, 600
$4,000 having been added during S12
years.
They have 227 street lights of 1900
candle power, burning 9400 hours per
year, the reported cost of which is
$7296 per lamp per year Reducing
this reported cost to Worcester basis
as regards the price of coal, adding
taxes lost and the additional coal nee
essary to burn 1000 instead of 1900 can
die lamps, the cost per lamp hour
would be 2S5 cents, as against our
present price of rs cents, and it is no
secret in electrical circles that the city
of Taunton will soon be obliged to
spend at least $4,000 on it's plant, in
order to bring it UP to the duty re-
quired of it.
The additional requirements for in
terest, etc, made necessary by this in
vestment, will probably increase the
cost of street arcs in Taunton to
cents per lamp hour, if figured upon
the Worcester basis as regards cost OF
coal and hours of burn.
That the consideration of this mat
ter of municipal ownership is not new
to the cities in this state, but has
been thoroughly investigated by bust
ness men from a business point of
view, is shown by the action of the city
of Boston.
After a thorough investigation of the
matter during Mayor Matthews adj
ministration, in which several estimates
of both cost and maintenance were
made a contract was made by Mayor
Quincy for 10 years service on a slid
ing scale ranging from 80 cents per
light per night for 2749 lamps to 30
cents for 5000 lamps, all lights to use
800 Watts energy and to burn, as in
this city, 1900 hours per year.
The town Of Brookline. after much
careful inquiry into the probable cost
of electric street lights under municipal
ownership conducted by experts of the
highest standing, contracted for 800
Watt lamps burned 1900 hours per year,
costing 80 cents per light per night.
The city of Springfield investigated
the subject of municipal ownership;
and, after careful consideration, re-
newed it's contract with the local COM
pany.
On the other hand, the town of Hud
son ACQUIRED it's electric light plant
under the present law, and the cost
per lamp hour, for the lights used on
its streets. is more than three times
that paid in this city.
The experience of the town of Wake
field has its lesson, according to data
furnished this committee by the NUM-
cipal plant of that town, the price
formerly paid under contract was SIS
per lamp yeaF for 1900 G. p. lamps
burning 1-2 hours per night Its plant
was established in 1894 at an original
cost of $164 600 The investment in the
plant to date is $1S0000. The town uses
per night, and the reported cost is
SASS per lamp year. The town, plain
ly, loses the taxes formerly paid by the
corporation, which amounts to $12.14
per lamp year. making the true cost
S86.S2 per lamp year with the munich
pal plant. as against S75 per lamp year
under contract the burn being prac-
tically the same.
1t has been noted that the local con-
in, "A
some respects, from those existing in
many cities of the state where munich
pal plants have been established.
The really important point, then, is
the probable cost of acquiring the
Electric Light Company's plant and
the cost of operating it when it is
acquired.
The exact wording Of the paragraph
Of Chapter 37O Acts of 1891. which
fixes the value of plants taken, is:
"And the price to be paid therefor
q. e., the existing planD shall be its
fair market value for the purposes of
its use. no portion of such plant to be
estimated, however, at less than its
fair market value for any other pur-
pose, including, as an element of value,
the earning capacity Of such plant
based upon the actual earnings being
derived from such use at the time of
the final vote Of such city or town to
establish a plant and also Of any loca-
tons or similar rights acquired from
private persons connected Herewith"
Your committee has been unable to
obtain a construction of this para
graph from the city solicitor and, after
careful consideration and consultation
with several parties of practical ex-
perience in transactions Of this sort
can see no other fair Interpretation Of
the above quoted statute than, that |
the probable value of the plant is in
dicated by the market value of the
company's stock at the date of the
final vote in favor of the taking, as
the investing public takes all the ele-
ments of value named in the statute
into consideration in naming the price
which it is willing to pay for shares in
the company. In this case. the stock
of the Worcester Electric Light Com
pany is worth at least s2l0 per share !
that being the price at which the last
issue sold in open market. The COM )
pany is capitalized for 100000 and has
no bonds outstanding.
This makes the property worth, ac-
cording to the judgment of investors,
81 .26O 900, which is the minimum
amount the city would probably be
obliged to pay for the plant if taken
under the statute
The legal requirements for interest !
sinking FUNDS and depreciation agSre- I
gate y per cent Of this amount or
S151 200 per year, as the minimum Of
fixed charges which must be earned
under municipal ownership.
As the city can work its men only
eight hours per day. and the company
calls ten hours a days work. 1t would,
therefore, be necessary to add at least
% per cent to the present pay roll of
the company
The city certainly cannot under these
conditions, operate the plant more
pbeanIv than the cOrDOratiOn has been