The San Francisco call., 1908-04-14
Statement Of the Spring Valley Water Company
to the Board Of Supervisors

event be increased, but might be re-
duced, or indeed entirely wiped out
by losses incurred in the conduct OF
/ the business. IF it is confscatory to
deny to a public service corporation
a fair return for the service rendered
it is equally conhscatory to limit divi-
dends to the lowest return for which
money can be had in a safe enterprise.
and yet say to the stock holders that
they must use such dividends to meet
expenditures without which the serv-
ice cannot be rendered.
How unfair to say to public service
corporation. which by act of God has
suffered loss, that it is its duty to
the community to repair the damage.
and that in the fixing of rates the pub
lie agency will not take into account
the cost of such repair. but will allow
only the minimum income which a
safe investment would surely return,
leaving the company to meet the cost
of repair out of the pockets of its
stock holders.
If the interstate commerce commits
sion were to exclude any allowance
for loss by wrecks and collisions and
TO FIX rates upon basis which would
yield only .he minimum dividend on
| stock, how many of the great rail-
roads would long remain out of the
hands OF receiver? And yet wrecks
and collisions are not, as a rule,
caused by the act of God. The inter
state commerce commission, which is
the latest and most scientific develop
ment in governmental regulation, not
only allows for actual losses of this
nature, but makes provision for de-
probation and replacement
This amount of $4,000 was used
for replacement. no fund for which
has ever been allowed or provided in
rate schedules adopted by the super
visors- Future rates must provide a
replacement fund
! A review OF the past also tends TO
show other just causes for grievance
by the company. Taxes in 1908 will
amount to $13s,ooo more than in 1902.
The city has, from year TO year. for
the last seven or eight years. con-
sistently reduced the allowance to the
company for water furnished the
municipality. Receipts for water fur
nished the city have dwindled from
about $4,000 in 1901 to $7o.559 ip
1907, although the quantity consumed
has constantly increased. Since 1902
the company has annually brought
suit to annul the rate schedule adopted
by the supervisors.
Last year the federated committee.
the chairman OF whose executive com
mittee was Colonel Heuer. recon-
mended an additional appropriation
for hydrants of S1so,ooo. We were
explicitly promised this appropriation
by the chairman of the finance COM
mittee of the supervisors, and on the
strength OF that promise the company
made large expenditures The appro-
priation was not made, and that
amount remains today moral obliga-
ton on the part of the city.
The policy of the present manage
ment is TO upbuild the property 1t
seeks cooperation of the city au-
thorities, and to that end will give
the utmost publicity to its accounts.
1t will pursue policy to promote the
friendship of the public and to re-
move prejudices. many Of which have
been caused by misrepresentation If
the rates asked for are granted divi-
dends for the fiscal year 1908 will be
limited TO per cent, and if those
rates are continued for the fiscal year
| 1909 the dividend shall not exceed
per cent; and when the dividends have
reached six per cent there will be no
increase unless there shall be a re-
duction in rates. We assume. if after
this investigation your committee shall
take such action as will. result in the
enactment for the year 1908 OF the
rates we ask, that they will be con-
tinued for 1909 If they are adopted
we shall during the coming two years
expend at least S50O,OOO in better
ments so as to enable the company
to meet all the needs of the consum-
crs, this expenditure to begin imInedi-
ately.
We are before you in good faith.
We ask for your cooperation in
maintaining, extending and improving
the property upon which the city de-
pends for its water supply. Granting
our request will go far toward restor
ing our credit, the establishment OF
friendly relations with the administra-