The San Francisco call., 1908-07-10
SPRING VALLEY HAS
BAD DAY IN COURT
City Scores Many Points on
Water COmpany'S Lawyers
in First Session
Thomas E. Haven Shows That
Corporation Seeks Power
TO Make Rates

The developments Of yesterday were
distinctly TO the advantage of the city
in TIE Spring Valley injunction suit
The day was devoted to arguments,
and the city's representative piled au-
thority upon authority to show that
under no circumstances should the COM
pany be left free TO make its own
rates.
Frank H. Powers, one Of the Spring
Valley attorneys, occupied the morn
ing and part of the afternoon opening
the argument. He was followed by
Assistant City Attorney Thomas L.
Haven. The city will occupy part of
this morning and Attorney E. j. Nc
Cutchen Will close for the corpora
ton. Haven was supported yesterday
by Mayor Taylor, who made an occa-
sional suggestion and assisted in the
direction of the case Garret McEner-
ney. attorney for the San Francisco
gas and electric company, which filed
Bn Injunction suit against the city yes
terday was in court gathering data
FOR use in that action.
MAY GET LOWER RATE
Haven made the point yesterday that
tion was to maintain the status quo.
This would force the company back 10
the 1902 rates. which are lower than
the 1908 schedule, to which the cor
pOratiOn is objecting.
we have no particular objection to
the court granting the preliminary in
junction If the company is not left free
10 make its own rate" declared Haven.
The assistant city attorney insisted
"a
present case was the rate fixing power.
The matter Of the justice or injustice
OF the 1908 schedule, he argued, should
be left to the final hearing for de-
termination.
Powers devoted his argument to the
question Of valuation. He used a
blackboard and by various methods
figured that the plant was worth from
345. 100000 10 $56,O0O, 900. He insisted
that the corporation should be allowed
a liberal rate of income on the S45,000,-
600, which he declared TO be the value
OF the plant in use, or a per cent in
come on $50, 2,5O0,O ,OO0, the $7,500,000 eX-
cess representing the value the com
pany places upon its property held for
future use.
WATER VALUE GREATEST
Judge harrington raised the ques-
tion whether the company could ask
real estate prices for land used as
drainage area Powers replied that
he considered the water value" the
greatest commercial value. The Spring
Valley attorney asked that the prox-
unity Of the Spring Valley to the city
be taken into consideration, suggest
Ing that with a more remote system,
with the possibility Of war with
Japan, some Benedict Arnold could
cut the water pipes"
He referred TO the builders of Spring
Valley as philanthropists putting their
money into a public utility when in
terest rates were 2 per cent a month
Powers held that the peninsula sys-
TEN OF Spring Valley was the key TO
the water situation in San Francisco.
Using the figures Of c. E. Grunsky, he
endavored TO show that the former city
engineer, If he were to compute the
value Of the plant today, would have
TO place his estimate at s46,OOO,0O
Haven began his reply by critics.
ing the compeny's attorneys for de-
lay in supplying him with their list
OF authorities. He followed his argu-
ment that a temporary injunction
should maintain the status quo with
the declaration that the Spring VAL
ley was in no position TO object to the
new rates in that it had acquiesced for
six years in a lower schedule.
WOULD FIX OWN RATES
What the company really wants"
he said, is 10 nullify the constitu-
tion, to take the rate fixing power
from the board of supervisors and as
sumo it itself. The court has no pow
er to fix the rates. In that counsel
on both sides are agreed. Who then
can AK the rates? Surely not the
company. Shall the Spring Valley say
10 the consumers, Pay Us what we ask
or we will shut of the waterg Shall
the company go before the $4,000 rate
payers and say, You pay US what we
demand?
1t is not enough to say that Spring
Valley viii not impose burdensome
rates. 1t is sufficient that it would
have the power to do so. This in turn
would lead to endless litigation. If
the company should attempt to en-
force a higher rate, then an action
would have TO be brought to restrain
Il. Moreover the rate payers would
refuse to pay the higher rate and suits
would follow"
Haven then read a number of au-
thorities showing that a temporary in
junction should not issue to incon-
venience the many as against the few
He insisted that the value of the plant
should be taken at $4,000, 900, the fig
ure named by the corporation Itself
when IL effected its reorganization.
At the conclusion of the day Attor-
ney McCutchen asked the city to stipu-
late that as an index of interest rates
It be entered in the record that James
.. Phelan was paying H per cent on
$1.750.00O pending the construction OF
the Phelan building with the under
standing that he should pay per cent
upon its completion.