The San Francisco call., 1908-04-14

the real value of the property by
whatever additional amount this per-
manent reliability of the Calaveras
sources, as at present developed, may
have established. AS the permanent
product of this part of the system
now practically equals the product
OF the peninsula system, which was
valued by Mr.. Grunsky at about
$10,000,000, it seems fair assumption
that approximately these figures
should be taken as the present value
of the transbay system, even though
there be left out of the question its
possibilities as a source of additional
supply.
1t is to be remembered. further,
that the possibility of supplying the
city with water for the next 10 years
rests absolutely upon the future de-
velopment of these properties and
that this prospective value, upon
which the security of the city's sup
ply rests, is an important element,
which has been entirely omitted in
the valuation assumed by the city
engineer
The0lowest estimates of the value
OF the companys property have been
made by the city engineers or by ex-
perts employed by the city. The
highest estimates of value have been
made by the company's engineer or
by experts employed by the COM
pany. Admitting that all are striving
TO reach a fair end, it must be con-
ceded that each party approaches the
matter from different point of view.
For estimates of value by different en-
gineers you are referred to Colonel
Heuer's report You are occupying
position of neutrality as between
the city and the company, and are
charged with an obligation to deal
fairly as between them Is it not
quite as unfair to the company for
you to take the valuation of the city's
experts, and close your eyes to the
company's estimates, as it would be
to the city for you to disregard its
estimates and be controlled entirely
by the company's valuationss
VALUATION BASED ON COST
THE ACTUAL EXPENDITURE
FOR THE CREATION OF THE
SYSTEM WAS OVER s2s,ooo, 600.
An allowance for interest during con-
struction added to the s2s, 600 900 ac-
tual investment will probably exceed
the price at which the property can
be purchased by the city. THIS
(s2s, 10000 REPRESENTS THE
ACTUAL COST OF PROPERTIES
PURCHASED OVER A PERIOD
OF MORE THAN 40 YEARS, THE
COST OF DEVELOPMENT AND
THE COST OF THE DISTRIBUT-
ING SYSTEM. The value Of these
properties during the last 40 years
has greatly enhanced. An additional
element of value rests in the dem
onstrated fact that they are now one
complete homogeneous water pro-
ducing system; and still another ele-
ment of value over the cost is es-
tablished business. The actual mar
ket value today of the Lake Merced
lands alone over cost represents sew
eral million dollars
VALUATION BASED ON PRICE
OF SECURITIES
The market quotations OF stocks
and bonds of the company have little
to do with their actual value Market
quotations are controlled by supply
and demand, financial conditions, in
come and municipal political condi-
tions. The late board of supervisors
passed conhscatory rate for the sale
of water, and passed an ordinance for
the forfeiture of the franchise of the
company. Such attacks affect mar
ket quotations, but they do not affect
actual value. Is it not a matter of
common knowledge that, in the pres
ent depressed condition of the money
r