Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1905-07-23
WATER BOARD WINS ITS CASE
Judge Munger Refuses to BnjOin Reduction
in the Re.er Rates.
DENIES APPLICATION OF THE COMPANY
This Reduces the Rate 60 Private
Consumers I'm Omaha from
Thirty-Five 90 twenty
Five Cent?.

Judge Munger handed down his decision
in the United states circuit court denying
the temporary Injunction prayed for by
the Omaha Water company to restrain the
water board from enforcing an order re-
duclng certain meter rates below the maxi
mum prescribed in a certain ordinance Of
the city of Omaha, passed June II, 1880
known as Ordinance No. 423 This means a
reduction of these rates
In his memorandum opinion Judge Mum
ger says:
The Injunction is sought. first, on the
grounds that the rates prescribed by the
ordinance constitute an irrevocable con-
trast between the city and the water COM
panyi second, the rates as prescribed by
they are insufficient to cover the cost OF
furnishing water to consumers who would
be affected by such rates; third, that the
rates are unreasonable and will not yield a
reasonable return above the actual cost OF
furnishing the water and would reduce the
revenues below what would be a fair and
reasonable return upon the cost of the
water works and amount Of money actually
Invested therein, and would reduce the net
Income below an amount sufficient TO pay
the interest on the water company's mort
gage after proper provision for maintain
ance and depreciation, dividend OF per
cent on Its first preferred stock and divi-
dend of per cent upon its second pre-
ferred stock.
Basis of His Opinion.
Upon the first question, as to whether or
not ordinance az constituted an irTevocable
contract, and that the action of the Water
board reducing the rates, as stated in the
BILL is void as impairing the obligations Of
a contract / am at this time of the same
opinion as expressed In the memorandum
opinion filed April "a, 1905, in the case of
the Omaha Water company against the
water board Of the City of Omaha, ct al,
being No. 40 W., that the question is con-
trolled by the cases of Freeport against
Freeport City, $50, U. s. $50, and stanislaus
county CO. against al san Joaquin Z. o,s Co..
1t Is undoubtedly true that there are two
classes of corporations subject to legislative
control and regulation in the matter OF
owner has Intentionally devoted his prop
erty to the discharge OF public service;
placed his property in such a position
whether willingly or unwillingiy) that the
public has acquired an interest in its use.
IL may be that as to the second class the
reasonableness of rate for the particular
service is the only matter OF inquiry and
that how much is made out OF the total
qulry. Such was the view expressed by
Justice Brewer in rendering the opinion
In Getting against Kansas City Stock Yards,
1873, U. s. 70, but the case cannot be con-
Eidered as authority upon that question, as
six Of the justices declined to express an
opinion upon that feature of the case.
However, the rule in this regard may be,
think the complainant company is cor
poration within the frst-class enumerated.
The decision cannot be founded alone
upon a consideration of what the property
has cost, the amount invested therein, the
cost OF operation the Indebtedness OF the
company and the interest charged thereon
and what will yield reasonable dividend
upon the amount invested. While these
are proper items to be considered the pres
ent value OF the property is not only an
important but an essential thing to be con-
sidered.
The bill before us In this case does not
allege or show what is the present value
of the complainants water plant.
From this brief analysis of the bill II
will be seen that the complainant water
company nowhere alleges that the rates
prescribed by the Water board would not
Furnish a just and adequate return and in
come upon the present value OF the water
works plant, which, as we have seen, Is an
essential II not controlling factor In de-
termining the reasonableness of rates.
Evidence by the way OF affidavits has
been given tending to show the present
value OF the water plant, but evidence only
is material which supports some material
allegation of the bill. There being no such
allegation in the bill as to the present
value, such evidence is immaterial.