The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1903-06-17
THE MATER WORKS PURCHASE.

The purchase Of the water works
from hesAmerican Pipe Manufactur-
ing Go. is not in anywise aquestion OF
sentiment but matter Of cold busi-
ness. Sentiment does not enter into
the consideration in the least degree,
as anyone who will acquaint himself
With the facts and circumstances OF the
conditions which the city has con-.
fronting it. and VIII give the question
unbiased consideration, must admit.
80 the end that all OF our readers may
have correct understanding OF the
situation d concise statement of the
case is given:
Eleven years ago the city of Sumter
entered into contract with the
American Pipe Manufacturing Co., Of
Philadelphia for the construction and
maintenance of a system of water
works IN this city. This contract,
which is a lengthy and most carefully
drawn legal document, was duly sign
ed and executed by the then Mayor and
CLERK of Sumter, and, to make it
more binding, was duly enacted as an
ordinance OF the city and published.
This contract-ordinance granted to
the American Pipe Manufacturing Go.
the exclusive franchise for furnishing
water for public and domestic uses in
the city Of Sumter for period of
tHensy years. The city bound itself
to exempt the property OF the said
company from taxation and further
more agreed in the event that any tax
es should be assessed against and col
2eeted from the said company by pro-
cess Of law to refund to the said COM
pany from the funds in the city treas
nry the total sum Of taxes so collect
ed. It was further stipulated that
the city should take sixtyfye hydrants
at an annual rental of $40 each, and
additional hydrants as needed at an
annual rental of s35 each. The con-
tract provided that at the expiration
81 twenty years the city should have
The option of purchasing the system at
IT'S commercial value, the valuation to
be fxed by arbitration, the arbitrators
30 be disinterested persons and nom
residents OF Sumter. In the event
sha5 the city failed or declined to ex-
ereise this right of purchase the con-
tract would Immediately become of
the same force and effect as when
originally executed and the exclusive
franchise extended for second tWen-
sy years at the expiration of which
time the city would again have the.
right TO purchase on the same condi-
sions as ADORE stated.
With this contract as basis the
americaa Pipe Manufacturing Go.
afssr having installed a system of water
works, said to have cost less than s40,-
900, organized local corporation IN
der the name and title Of the Sumter
Water Go. and issued bonds in the sum
Of SO. 900. This bond issue immediate
II established the commercial valua-
ticn placed upon the system and iraa-
ehise by its owners. About two years
aeo the Sumter Water Co. made a
second issue of bonds in the sum OF
$50. COO, thereby establishing the then
or near prospective commercial value
of the system and franchise at s125, 600.
Thus showing conclusively that the
owners IN determining the commercial
value Of the system do not regard the
actual cost ef the system as deciding
factor, but take into consideration
principally and as of 6rst Importance
the earning powers of the system. To the
owners of the Sumter Water Co., it is
an enterprise and in fixing its value
they do not consider what it cost, but
the net income it produces.
When the system was established and
accepted by the city it represented an
Investment of something less than s4O,-
900 by the owners. It started with a
gross income of 50, 40o-the hydrant
rent paid by the city-annually. In
the eleven years that have elapsed the
mains have been extended from time
TO time and the number of hydrants
increased to II and the hydrant rent
last year and for several years prior
thereto was ss,0o5. The first year the
income of the company from water
rents paid by individuals was practical
ly nothing. But last year the income
from this source was more than 3d.
600. Therefore the gross income OF
the company last year was more than
5000. The total expense account OF
the company last year, including
salaries, repairs and ordinary running