The San Francisco call., 1908-07-04
VALUE OF PLANT
QUICKLY JUMPS
Spring Valley Wants Twice
What Holdings Were Worth
Five Years Ago

The Spring Valley water company
was forced without being consulted to
testify in the United States circuit
court yesterday morning that its value
in 1903 was either s22,732,ss3 or s23,-
$50, ,SS3. Expert J. II. Dockweiler for
the city brought this confession into
the water rate litigation through the
medium OF minutes OF the Spring Val
ley water company during June and
July, 1903, when il was undertaking the
purchase Of the Spring Valley water
works, the old form of the corporation.
Those figures were the sums of the
two alternative propositions made by
the new corporation TO the stock hold
ers of the old Compared with them is
given the valuation of s24.124,3S9 made
1 earlier in the year by the board of
supervisors for the purpose of fixing
water rates. And without a quiver the
corporation Immediately brought suit
against the city Oh the ground that the
valuation it had fixed in excess of the
company's own estimate of its worth,
was not fair appraisement
Another curious feature of the book
keeping of the monopoly is that the
! value ii now sets on its properties
is more than twice that set in 1903.
Assistant City Attorney Haven and
Dockweiler consider this disclosure the
most important yet made.
In addition to the affidavit exposing
the minutes of the Spring Valley Dock
weller fled several other affidavits,
which were read in court yesterday by
Haven. Among them was a carefully
prepared estimate Of the valuation of
the company's property, based on Dock
weiler's own computations. In it he
placed the value at $24S71.63S.
COMPANY CHANGES MIND
Dockweilers affidavit dealing with
the water company's valuation at the
time of its reorganization and change
Of name is meaty. 1t contains little
but copies OF the resolutions of the
formative and the passing corporations
and tables of figures, from which the
telltale valuations are culled.
The first resolution is that passed by
the directors of the Spring Valley water
company making an offer of purchase
to the stock holders Of the Spring VAL
ley water works. Later this first prop
osition was withdrawn and another was
submitted, as related in the resolutions
copied in the Dockweiler document. A
letter from the Spring Valley water
works. signed by Charles Webb How
ard. chairman of the stock holders
meeting, accepting alternative propo-
sitions is also given.
In arriving at the totals of the prop
ositions DOckweiler took the sums Of
fered the stock holders plus the debts
TO be assumed by the new owners, less
property not in use.
The alternative propositions, showing
the Spring Valley water companys own
valuations. follow:
First alternative proposition
140. 600 shares Of stock at $50. S11 $50 900
Outstanding bonds, as per Sehussler's
Floating Indebtedness. as per Sehuss-
lers affidavit for ends Of YEARS
l9U2-lSu5 OBSERVATION-DISCLOSURES. S35. 900
Total NEUTRALITY-SUSPICIOUS.. .s2e, $40, 900
Properties not then in use........... 3.so7.117
Company's valuation of properties in
use at time Of transfer ........... so. .732. $50
Second alternative proposition
Selling price. outright. ght..............SI26 GOO 600
Outstanding bonds, average for years
Floating Indebtedness. s............... s35 900
Total .-.......................s .s27, sec, 900
Properties not in use.-............... 3.so7.1l7
Company's valuation. ............ .s28. $50. $50
To show graphically the liberaIity of
the supervisors estimate of values in
| 1903, Dockweiler appended the follow
ing succinct resume:
Value given in company's first alter
sena1d ~ @ IL @ SS
Value determined by supervisors. ..... "a 124 $50
SIX EXPERTS GIVE FIGURES
The computations made by Dock
weller from the plain figures given in
the companys minutes include the
charge for going business" and all
other items used by the company's ex-
perts in boosting it's values
In his estimate of the present value
Of the company's property, Dockweiler
recapitulates, giving the value of the
property on January 1, 1904, including
construction account and excluding
67O.61, at s22,8S0.462.71
To arrive at the present valuation
he estimated the cost Of the several
systems of the company at S12152,-
$50. To this he added engineering and
interest charges, bringing the total to
sl3.67S.OS6. Other items of property
swell the sum TO S24,053,39O. From
this was deducted the sale of the Of
fee building and lot, which had been
valued at $s5s,734. and added expendi-
lures OF SI.67S,9S2, bringing the total
value at present to $24.S71,63S.
Dockweiler's affidavit in reply to
Herman Schussler was fully substan-
tiated in the matter of blaming the
/ Spring Valley companys inadequate
]
Francisco by fire in 1906 by an affi-
davit of Chief P. II. Shaughnessy of
the fire department, which was read
by Haven. Shaughnessy averred that
had there been water in the city on
April is of that year the fire could
not have spread.
WILL INSPECT HOLDINGS
Haven also quoted copiously from
brochure written by Schussler, chief
engineer Of the corporation, and pub
| lished by it, In which he stated that If
/ the company had been able to build
reservoirs behind the county Jail prop
erty and at Market and Buchanan
streets, and lay pipes down Market
street, the most disastrous part of the
1 fire would have been forestalled.
Schussler blamed the supervisors for
not providing sufficient funds for the
construction Of the needed reservoirs.
Haven concluded the session by read
I ing the testimony of Desmond Fitz-
gerald and Edward Dureye, expert en-
! gineers of national reputation. who
testified for the city in the previous
/ litigation. The former showed that the
actual cost of a plant was the deciding
fact upon which to base rates.