The San Francisco call., 1908-07-12
JUDGE QUESTIONS
WATER ATTORNEY
harrington Asks Representative
of Spring Valley About
Franchise Values
Injunction Suit Against City
Is Taken Under Amusement
by Court

United States Circuit Judge E. s
Farrington took the Spring Valley
water oompany's injunction suit under
advfsement at a late hour yesterday
afternoon at the conclusion OF the ar
gument in rebuttal made by AttorneN
J.. J. NcCutchen for the corporation
Judge harrington viii return TO his
own court in Nevada, and he announced
from the bench that he would have the
decision entered through Judge van
Fleet
Il will try 10 have the decision ready
as soon rs possible" he said. but there
are many points involved to which
must give consideration.
II was 4:S0 before AIcCutchen had nm
ished his argument yesterday, but ne
did not have an untra nrneleo way 70
make. Frequently during his talk ne
was interrupted and questioned by
Navor Tavlor and Assistant City At
torney Thomas D. Haven. Judge FAR
rington interjected questions and com
ments into the address also.
COURT SHOWS INTEREST
Particularly did the court draw out
the attorney on the matter OF the Vaiue
OF the franchise Of the corporation
McCutchen devoted much time to a re-
view Of the fact that the supervisors IN
determining the value Of the Spring
Valley company neglected TO allow TOT
the value Of its franchise and deprecia-
tion.
McCutchen took the stand that the
monopolistic situation Of the Spring
Valley water company should make its
property and income as secure as q
government bond.
It am considering the element Of the
income Of the company" said Judge
harrington IF its yield was some
thing in addition TO the ordinary rate
of interest the franchise would be val
liable: for instance, if you received an
income Of 20 per cent while the ordin-
ary rate Of interest was per cent,
your franchise would be extremely val
liable"
Have we not business. the fran
chise Of which is invaluable?" asked
McCutchen.
That would be so if you were not
limited by the constitutional provision
which declares that the supervisors
must fix the rates returned the court
III looks TO me that the law was
passed to reduce your income, not to
increase it"
The law was TO regulate rates. Nc
Cutchen volunteered.
CAUSE OF LEGISLATION
If there had not been a dissatisfac-
LlOn ABOUT LAE LdACS GUN ANc-N-SN 80
would not have been passed" Judge
harrington commented.
If your property is as secure as a
government bond, shouldn't your in
come be the same as a government
bond2' asked Haven when McCutchen
returned to a discussion Of the fran
chise value
Il didn't say that" McCutchen re-
piled. 7 said that il we were assured
Of fair rate our property would be
as secure as a government bond.
IF you were assured of an income
Of per cent" Judge harrington quer-
led, your franchise would be OF i'm
mense value, would il not? Then 1t
would be the duty Of the supervisors
TO give you an added income to meet
The increase Of the value Of the fran
chise?"
McCutchen was somewhat taken back
by the fncisiveness Of the courts logic.
but claimed that ii covered his conten-
tion.
The application Of the principle Of
the right Of eminent domain makes the
franchise valuable" he asserted.
sLURS ENGINEER MANSON
During the morning session Of the
court McCutchen slurred the reputa-
tion Of City Engineer Marsden Man
son Your honor has doubtless read
of genius that is not far removed from
insanity" he said. The genius of
Marsden Manson takes 100000 from
our assets for earthquake loss and does
not allow for 100000 expended in re-
placements"
McCutchen claimed that If the pre-
lininary injunction prayed for was not
granted and the rights Of the company
should be proven on the final hearing
the company could never recover the
s1fffnrpF7pe hpfuvper he
the rate collected from the consumer
in the interim; while the consumer, on
the other hand. could be amply pro-
tected for any extra payment he might
make. he further declared that right
Of contract between the company and
the consumer would follow If the in
junction were granted, and quoted z
decision Of Judge Harrington in a labor
dispute in Nevada TO cover his point