The Bridgeport evening farmer., 1909-02-09
WHY RELIEVE WATER COMPANY OE PUBLIC UTILITIES SUPERVISION
Attorney Joshua Meltzer Presents Sound Argu= ments to tine Tax Board==Contract is from Year to Year and Cpn be Annulled at Any Time.


 The following protest against an ap-
 prorriation for the 20 year water con-
 tract was filed with the Board of Ap-
 portionment by Attorney Joshua Melt
 ger, Democratic candidate for Senator
 in the 23d Senatorial district, last fall.
 MT. Meltzer is a large property owner:
 Gentlemen-Believing that your hon.
 Orable board is sincerely desirous to
 hear the frank expression of every tax
 payer about the so-called 20 year con-
 tract before you decide whether you
 will appropriate any money for it, I
 have therefore taken the liberty to
 state to you in an open letter my req sons why you ought not appropriate
 any money for the 20 year contract.
 It was apparent to me, from the
 questions asked and statements made
 at the public hearing on the matter,
 that there is a confusion of ideas on
 the subject, and that the vital points ! involved in this question have been l obscured by oratorica1 effusion and extraneous matter brought into the discussion.
 There seems to me to be- only three
 points to he considered by your hon orable hoard before deciding this ques- ton, and I shall state them in their logical order:
 Frst-Is there an absolute legal con- tract subsisting between the city of | Bridgeport and the Bridgeport Fly draulic Co.,. which would involve the city in litigation in case it failed to make appropriation for it? or if it is | only a conditional contract, which is 1 ternnated by foi777~o nf an0~o~@-'; . ;0'' for it. and no liability is incurred bg | the city for the breach of it on account of failure of appropriation; then <,I, >cp-iIo T for. contract with the Bridgeport Hy- draulic Go. that it would be advisable l to validate this 20 years contract by an appropriation? And
 Third-What advantage or gain is there to the city of Bridgeport in tn S | long term, 20 year contract, that your honorable board would consider it a civic duty to give it new lease of life by an appropriation. nOtwithsta ing the storm of opposition to the con- tract by 95 per cent. of the tax payers of the city of Bridgeport?
 The first point has been already an- swered by the City Attorney. and even a layman reading the charter provis- ions of the city charter, and reading the decision of the Supreme court in the Toomey case. could not but agree with the conclusion of the learned City Attorney. that a failure of appropria- tion will terminate the 20 year contract without subjecting the city to any le- gal liability for the breach of it. It follows then that if you make the ap- propriation for it YOU are practically making the contract and take upon 1 YOURSELF all the odium and dis credit attached to it.
 As to the second point, namely: | What pressing need is there for a | contract with the Bridgeport Hydrau- 1 lie Co.,. etc., this question involves some explanation as there is some con- fusion in the public mind on the sub ject. It must not be forgotten, in the 1 first place, that the Bridgeport Hv dra ulic Go. is a PUBLIC SERVICE CORPORATION, and it's status is en- | tirely different from the status Of 1 private corporation. A private cor i poration may refuse to sell, or it may 1 charge any price it chooses; a con- l necessity. but in the case of the lily draulic Co.,, which is a public service l corporation having a monopoly of an absolute public necessity, no such con- | tingency can ever occur. It must sup | ply water to every one. who will com- ! ply with it's reasonable regulations, | and can charge no more than a REA- SONABLE RATE for it's water. l A reasonable rate HAS been con- sidered by courts to be a FAIR RE- l TURN upon the ACTUAL investment | in the property used and needed to be 1 of water to consumers. A fair return i upon investment has been variously 1 construed: All the way from per cent. to per cent. has been considered i as a fair return, but never more than 6 per cent. was allowed to a public | service corrora ton. This last amount of per cent. was in the 30 cents Gas case which was recently decided by l the U. s. Supreme court. On this point the U. s. Supreme court had this to say:
 ''In this particular case, with refer l ence to the risk attending the business and the locality where it is carried on, l the comrlanant is entitled to 9 fair re- ! turn. IF TT IS POSSIBLE TO per cent upon the fair value of it's property ACTUALLY USED IN ITS BUSINESS of supplying gas"
 Comrare that decision, gentlemen, with the OFFICIAL statement of the Hydraulic Co.,, that it pays only per cent dividend to it's stockholders upon | it's investment in property. when it holds nrorerty DOUBLE the amount NEEDED or USED at present in the l distribution and collection of water l to consumers.
 If the surplus property held by the i Go. should, be deducted from it's in vestment you will find that it's divi- dend is 16 per cent instead of per 1 cent. There are master minds in the 1 Hyddullc O., who know now to con- i ceal- from the nublic it's true income, | but I am satisfied if the matter ever comes to court it will be found that l half of the rate it charPes now for it's water will he considered more than a reasonable return.
 | Under these cCrcumstances, gentle
 men. is there any need for contract 1 with the Co.,? Is there any fear th9t ! it will charge arbitrarily for it's water, or that it will refuse to deliver water to the city?
 1 Then, why make a contract at all? What advantage is there in making a contract? And this primes us to the answer to the third question. name ] ly: what 8dvanta ge does the city gain l from a long term contract that you would consider it your civic duty to make such a long term contract with the Company?
 The time is fast coming, gentlemen. when public service corporations will | be regulated by the Legislatures, or | municipalities, or public utilities com missions, and we in our own state hope soon to have such a commission therefore, gentlemen, you have no rioht to bind this city with an ob- noxious, long term contract. and de- prive it of any benefit the city might derive from the establi isllment of a DI1h1ic utilities comm iSSi0D