Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1903-06-19

rect az cOulu Dt tShCu
CO., Mr.. Manley asserts that the APP
praisal will be more than $650O0O.
Under the rules laid down by the
Supreme court in a case just decided,
but not yet bound in any printed vol
ume, the appraisal Of the Augusta Wa
| ter Company, based upon the figures
given in Mr.. Manley's communication,
would be $48O000, If the proof showed
| the plant to be in good condition and
| the water pure. Mr.. Marley, however,
| admits in his communication that the
water is impure. He claims that it
| would cost at least 100000 to bring it
up to a proper state of purity. Under
| the same decision of the court this
| 500, 900 should be deducted from the ap-
praisal, instead of being added to it,
as Mr.. Manley inadvertently states.
| The proposition of law is a plain one.
The rule of the court which permits
an appraisal based upon the income is
| one that applies to a standard, or first
quality, set of works. Where the
proof shows that the works are below
| the standard required by the charter q
proper discount must be made. In
other words, second quality works
bring second quality price, just the
same as in buying and selling mer-
| chandise. The same rule of law applies
| to the purchase of water plant as to
the purchase of barrel Of potatoes.
Standard potatoes bring a standard
price. Second quality potatoes bring
second quality price. Our court has
distinctly decided that if the company
is furnishing impure water the cost of
obtaining a pure supply must be de-
Quoted from what would otherwise be
the full price Of the works. Using the
figures of Mr.. Manley's communication
as to their income, etc, and applying
the simple rules of case recently de-
cided unanimously by our court, the
Augusta plant would be worth $4S00G0,
if the proof shows it to be a standard
quality plant. With Mr.. Manley's adj
mission however, that the water sup
ply is impure and below standard, and
his further admission that it would
cost at least 100000 to bring it up to
standard, then following the rule laid
down by the court, his plant would be
worth 100000 less than the standard
price of $4S0,000. If this case could be
tried before the appraisers simply
upon Mr. Manley's letter, and the Au-
gusta Water Company would stand by
the admissions that he makes, the final
award would be $3S0,0OO. 1 base these
figures not upon any legal opinion Of
my own, but by applying the rules of
law solemnly declared by the Supreme
court. l do not admit his figures to be
right.
GD Mr.. Marley claims that the
Water District could not float its
and then says that the very best bonds
are selling today at higher rate.
l trust it is not improper for me to
say that Mr.. Manley as a banking man
knows full we'll that the money market
today is in a feverish, unnatural and
Unhealthy condition. The rates of in
terest are higher than they should be
and will go down when healthy condi-
tions are restored. This discussion
should be carried on upon the idea that
the bonds will be floated under the
usual ordinary and healthy conditions
of the market. If the Mayor and AL
dcrmen elect, as they undoubtedly will,
Trustees who understand the floating
OF bonds upon a large scale these
Trustees will unquestionably see to it
that the bond issue is floated at a time
when the rate of interest will be fixed
by healthy conditions. Dover and Fox
croft sold $4,000 of bonds substan-
TALLY at par, bearing three and one half
per cent interest. They have q valu-
alton OF about a million and n quarter
as | remember it. The bonds repre-
scented about ten per cent of their valu-
alton. Certainly the credit of our
water district would be better than the
credit of their little district. Upon the
same basis the Augusta water district
could easily float a bond issue at three
and one-half per cent far larger than
the ultimate figures of cost, etc. will
ever require.
(S). Mr. Manleys computation,
He made the mistake of adding the cost
of improving the water supply, which
he calls 100000 when under the rule
of Court it should have been deducted.
This error upon his part is entirely ex-
cusable because he is not a lawyer and
therefore not familiar with these de-
cisions of the Court This would
change his estimate of ultimate cost
from $750,000 to $550O0O for instead
os adding 100000 to his claimed price
of $650,OO0 it should have been de-
Quoted. For like reasons the interest
account of s2G.5O0 per year, as he claims
1t. should be changed to $19250. His
statement that the operating expenses
would be at least $4,000 per year is sub
stantially correct, but as above ex-
planned his original error in handling
the 100000 item reduces his state
ment as to the sinking fund from $1,000
a~year to $500. In his haste of pre-
pairing his article Mr.. Manley errone-
ously states that the district will supply
the city with water free, and that L.ns
would make a difference of $500 per
year. He has overlooked the fact, not
being a lawyer, that under the charter
the water district is to treat the city
precisely as it would. private indi-
vidual. The city must pay for the wa
ter that it uses precisely as it would
water company. although naturally e
hydrant rental will be heavily reduced.
Mr.. Manley's item of $3100 should,
therefore, be dropped out. You will