Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1904-05-02

ly reviled. Five per cent! Would a
manufacturer manufacture at that
rate? Will the holder Of real estate
rent his buildings at that rate? Gross!
Has the counsel pointed to one solitary
decision of one solitary court that ever
held five per cent. as a maximum Of
return with the uncertainties Of the
future such as they were in 1885? We
are not judging here what would be a
fair return Of property with g. rate of
income assured as now. 1t is easy to
read the past. 1t is hard to scan the
future. A man who takes what rs
known takes 1t clean. The man who
launches into the future must accept its
risks, and with 1t he must hope for
greater profits. If such a schedule
were to be adopted. may it please the
court, what would become of the his
tory of future enterprises in Maine?
But that is not the most singular
proposition connected with this topic.
The counsel selects as the test one year,
and that the present year. but II the
rate of income received in this particu-
lar last year of this corporations life
be too much according to his standard
of five per cent, then it must be re-
1ecleU. has Tic SOullSCl lOTBOlIeu lIldl
there were II long years before this
one! And would counsel contend that
an investor in a doubtful business of
the future was entitled to no income
for II years, and that then if he = sud-
denly receive a vast income, that that
poor pittance, the only one of Is years
for which he received any return on his
investment, had to be cut In thirds.
and he be left without any return upon
his capital for the other II years? 1t is
pitiful to hear eminent counsel argue
in such fashion. A man is entitled to his
interest from the moment of its invest
ment. and the reasOnableness Of the
rate must be tested, as always adj
mitted by everybody until now, by the
average return of all the years. TAX
ing the net earnings of this entire
period what do they show? That is the
test. We find a grand total of 1884,
257. 90. the average net earnings for
those Is years $40, 124 per year. Deduct
ing a thousand dollars for depreciation
leaves $1S,124.00 upon a valuation or
$3.50, 10000. That would figure about
five and ten-hundredthS of one per
cent. that we had received as unreal
sonable rates, one-tenth of one per
cent. more than the counsel named and
named submit without any authority.
No man would ever invest his money
on the chance of a five per cent. income
only, in 1856, and if we take 100000 on
of that and arrive at the physical
values that the counsel has figured,
sc47, 900 or in round numbers $250.O0o, we
shall find then there is only shade OH
of seven per cent earned. Throwing
out all our figures, on the basis of the
actual cost plus the going concern
value today there is less than five per
cent. earned upon this property and
counsel says it is an unreasonable
rate.
Such considerations have never yet
commended themselves to any tribunal
There is another test, the value of the
service rendered to the consumer. Is
there any evidence in this case to show
that this rate here is different or larger
in it's net results than that generally
prevailing through all this section OF
country? Not a shadow. Has there
been one word of complaint ever utter
ed by any consumer as to the rate
| charged in proportion to the service
rendered? Furthermore, does anybody
expect the rate to be changed after the
property is transferred? When they get
the property they will continue to
charge 100000. From another stand
point, how much water is delivered
daily? Two million and quarter gal
Ions. What is the very minimum re-
vealed from any witness in this test1-
mony on both sides? Ten cents thou
sand gallons. 1t prevails here so far as
water is sold by meter to manufactur-
ing concerns. 1t is minimum rate.
If you take that minimum rate and
apply it to the quantity of water used
we should find a very minimum rate.
We should find here that the gross in
come of this company on the basis of
two and one-quarter millions per day
would be $SS, 100000 instead of what it is,
$3S, 100000 At the lowest cut down
manufacturers wholesale rates the in
come would be s5O,oOO.OO more than is
actually received. And yet the counsel
say those are unreasonable rates.
Now I pass to consider the most i'm
portant and broad question here, the
earning power of this system. 1t is inn
portant to note what is the learning
capacity of the system when 1t is to be
turned over to the district, not the
earnings of the past. The district does
not takA the earnings of the past, but
of the future, and the whole of it. The
fairest test of that will be to ascertain
the earnings of the system. for the first
fiscal year of district ownership from
July 1, 1904, to July l. 1905. All the
growth and development Of all the past
is then actually as we'll as potentially
in the property to be taken. We lose
it. They take it. We should need to
know first of course the earnings of the
property for the year ending July 1.
1904. 1t is conceded that the gross
earnings of the company for that year
are $3S,44S.00 What will be the oper-
ating expense Of this present year?
Mr.. Manley has figured it at between
IS, 400 and $500. The items are agreed
on except as to two. One is the item
for repairs upon services amounting to
between 800 and 5000. That item Is
repairs or changes voluntarily made by
us upon services which we do not claim
title to, and are transferring to the dis