Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1904-05-02
CLOSING ARGUMENTS
,CC0ntinued from page ~
ing surely that that viii measure the

average gain of the future. I have
zone further and taken the net earn
Inn Of the company for Is years past.
Mr.. Pride's tables for that period IN
clude the Devine lease which vitiates
all comparison. Mr.. MaI1ey's table
segreRates. the Devine lease and gives
the earnings of the Augusta Water
Company alone. The result is an aver
are annual increase of $9SS.So, VERIFY
INK closely the average gain OF the last
i've years, and showing also tnat TINS
ueoperty II gradually accommodating its
Hruas gains when compared with the
..rnfn1n for the last five years.
> have therefore added 81 600 to the gross
earnings of the preceding year which
Ewes us 81. ~ as the gross revenue for
isolx The average operating expense OF
the past five years. one Of which was an
abnormal year with an extraordinary ex-
pense of q, 500. is IS. 311.S9. The operating
expense for Il years past is only $500,
and the average annual increase of oper-
atinx expense for that period Is s1o4. The
average annual increase in net earnings
for the 10 years Is $S55.23. Therefore, the
earnings Of the district In its first fiscal
year, which represent the earning capac-
fly turned over to them at the outset or
that year are as follows: Gross earnings.
"a. ~: operating expense. S.5l1.s9; net
earnings, $31,137 To this should be added
the pro rata Of the Devine lease admins
tration expense, $40. bringing the amount
to Sai,z7 net for the first year OF the DIS
trict's ownership. And that Is normal
and reasonable increase of the business
not by reason Of rates.
Now we come to the question OF the FL
ter cost have assumed the estimates OF
the engineers for the district subject only
70 qualifications on two or three points.
one being as to the quantity of land re-
ouired. MI Shedd after careful inspec-
fion has found q suitable spot with no
mora rocks than would probably be need
al IN the construction Of the reservoir it.
eelf. Ave acres In extent which all will
admit 10 ample. the extra five acres taken
BY the districts engineers having been
for the purpose of getting a spot. Mr..
1hedd also reduced the estimate as to
the buildings and the laboratory plant,
and rejected the duplication of the Bond
Brook submerged line. for while it is a
good thing to duplicate any portion of
the system it is not a thing which the re-
oufrements of good engineering would
dictate and he says there is no more oc-
casion for duplicating that portion of the
line than any other. The result Is that
Mr.. Sheda's figures Of sSS0O0 for filter.
adding the cost of the reproduction as
siven by the districts witnesses. leaves In
round numbers $4,000 The total operat-
ing cost as given by the districts filtra-
ton experts Is s. 3S71s. I take the ele-
ot
which is well warranted by the nature OF
the structures. I have further assumed
taxation upon a. valuation OF $4,000 as, II
the company continued the property,
taxation upon that basis could readily be
arranged and no doubt it would be ex-
empted even for some reasonable period
OF years. And I have placed 1t on a 2ts
per cent basis of taxation. although we
have now the immense property of the
Edwards Co.. just released from exemp-
tion, now about to be taxed. which would
make a material difference with any or
binary tax rate of the city. That would
give q tax charge upon the filter itself OF
$1,000. Adding 40 interest on the sN'"t
invested would be $500 more. The ag-
Rrexate Of those items is $',15o. Deduct
ing that from the net earnings previously
mentioned of $31, 277 still leaves balance
OF 324,117. / have then established sink
ing fund for depreciation on the entire
plant Of 81, 900. which is 500 more than the
total depreciation of the last Is years as
averaged. That still leaves a net balance
Of s23.ll7 for permanent dividends on the
existing capital or on the purchase price.
Now the court will bear in mind what
vre have done thus far. We have guaran-
ted the plant by total sinking funds of
N.23.2, including the filter plant. and
fully provided in operating expenses for
Ali annual repairs. The final net earnings
Of 81. 600 will be directly applicable to per-
manent dividends.
Now the great question is, at what rate
should a property yield? That depends
upon the safety Of the investment L
axree fully with the counsers views as to
the safety. the security. the almost unri-
vailed excellence Of a water company as
an Investment today. The uncertainties
of the original investment have been
eliminated.
Year by year. without any increase OF
rates whatever, there will accrue to the
owners and holders of this property
ours today, theirs tomorrow and for al
the future time-there will accrue IA
steady increase. $1,000 a year is a
moderate measure of this increase even
with the water as 1t is, because the
earnings shown to this commission are
the earnings with the water as 1t is,
not with a purified supply which shall
satisfy the wants of the people, or the
sentiment at all events of the. public,
better. With added publication expe-
rience shows that there comes Il
marked increase in earnings. The an
nual consumption of spring water,
shown to be $4,000. will in part at least
be done away with and the takers who
discontinue its use can afford o in
crease in some respects their uses of
the present water. That is the history
OF ali, companies. That future increase
the district takes and takes forever;
that future increase the company loses
and loses forever. No award which
can be given will ever adequately or
fully make us whole. The takers are
the ones whose steady profits will
gradually swell. Wherever the expert
ment is tried 1t is tried for good and
with results which in the lapse of rea-
sonable years even yield rich and gold