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

ttation. Assuming the annual increase
| in the above income after publication
of water to be only $1,000. this income
will proyide first for per cent. annual
dividends of $4,000 on the purchase
price of s575.0O0; second for a sinking
fund number 1. substantially one-hah
of one per cent on the entire property
destructible property, which invest
4 ed at 81 per cent. semi-annuaiiy
compounded. will replace the entire de-
structible physical plant which l have
called 1921 900 in Sc years. Second.
sinking fund number ., being the fu-
ture increase of $1,000 a year without
taking account of publication Of the
water, which sum of $1,000 added at
3k per cent. compounded semi annual
ly will repay the district it's entire pur-
chase price of $57s,0e6 in IS years
time, whether such price be evidenced
by bonded debt or otherwise Mean
while every year they will have reapel
{ per cent of the full purchase price OF
$4,000. They will have accumulated
the second sinking fund to rebuild the
entire destructible portion of the phySl-
cal plant in Sc years, and in % years
every dollar of bonds issued for the
purchase price will be paid off. Can
there be presented a more attractive,
safe and conservative investment But
that is not all. This property is worth
$4,000 and more a year to the district 20
take more than to the company to Keep
because the company cannot Dor
row at better than per cent. whereas
| the district has borrowing power
of certainly 31s per cent. And If time
| should become favorable for bond IN
vestments and money should continue
to accumulate in great centers, it woul
not be surprising to see 3 per cent.
borrowing basis for a water district
situated as this is. That one-half OF
one per cent. on the purchase price
would be $4,000 and more. SO that
every year in round numbers $4,000
| would accrue to the district. more than
the profit which would accrue to a. pri-
vate purchaser or another corporation
that was buying the property at valu-
alton of S515.000. Again. computing
the various elements. the total gross
earnings for the year 1910 would be
| approximately. so far as we can read
the future, S49233, this amount being
| far below the estimates shown by the
| curves projected by the witnesses.
The total operating expense, includ-
| ing the operating expense of the filter
plant, would be s11.14S leaving the net
| earnings of 1910. s3s.146. Now what
| would those earnings yield? First
taxes OH the filter plant at az per cent
on s6O,O00 to which amount l assume
the taxation would then be increased
| $500. Sinking fund No. 1 to replace
| the dcstructibla portions of the filter
plant. 1923. Sinking fund No. 2, to re-
| place the destructible part of the pres
| ent plant, SLIT. Sinking fund No. 3 to
| repay the purchase price, s2.035. That
is to be deducted out of the actual earn
ings of that year. A per cent. divi.
dent on the s515000, amounting to $685.
$50. A 5 per cent. dividend on the $780,.
| 900 invested in the filter plant of $4,000
! And that total exactly equals the mel
| earnings found. The dividends have
been raised in five years time to 5 pei
| cent. and additional sinking funds have
been provided, and that on the basis OF
the reasonable probabilities as to g
period of five years hence. What is the
property worth today with these close
| ly impending probabilities of the neal
| future? Yet the counsel says that thi:
property must be taken and paid fol
only at the pitiful sum of s117 900, and
think after that he excluded as worth
less the entire pipe line between here
and Togus at about $4,000.
| But the counsel says it has no goint
| concern value because it has reached
it's maximum lawful income? It's tota
average net earnings as we have sale
are only about per cent. upon the
actual investment. But counsel says
the cost of the filter plant must be de.
Quoted from the present value of the
property. Is the present value of the
property less because another piece o.
property is going to be added to it ir
the future? That is an absurdity. You
will add to the real intrinsic worth Of
| the property more than the amount tC
be put into the filter plant.
But the counsel says that Togus is
moribund and will be with us but few
years more. ignoring the half billion Of
men from the regular army and navy
the veterans of the Spanish war, the
soldiers sent to the Philippines and the
| survivors of future wars. History
| speaks not of the closing of great in
situations like these. The Govern
ment today is appropriating more ant
more money; it is extending and no
shrinking the conditions there. VIII,
was it that within the past few years
Notwithstanding the speedy disap
pearance of Togus, my friends the
trustees of this water district have es
tablished at great cost an electric rail
road that would not be worth the paper
| Of its bonds except for Togus. for tn,
sole purpose of connecting it with tina
rloribund institution?
| MR. HEATH THAT is not true.
| MIR. BAKER: Perhaps there is no
any line to Togus. I may have beer
deceived. but thought I had seen it.
| MIR. HEATH: You said the sole pur
pose. l submit that is illegitimate ant
! it is not true, it is not the sole purpose
and you know it.
| Mr.. BAKER: If it Is not the sole
purpose it is a sufficient purpose.
| MIR. HEATH: You know that the
purpose is to build that road to Rock
land.
| MIR. BAKER: know that the road |:
built to Togus and no further, and yo,