The San Francisco call., 1909-05-09
SPRING VALLEY
ANSWERED BY
CITY ATTORNEY
Haven Shows COmpany's Engi-
neer Has Overestimated Value
of Wafer System
Court Required TO Decide
if Rates Fixed by Super
visOrs Are Reasonable

viSOrs Are Reasonable
Of purchase were carried on between
two entirely different boards of direc-
tors. THAI Of the old Spring Valley wa
ter works and that Of the new Spring
valley water company, Further, that
three prices were named, the first Ss3-5o
per share on the old $4,000. 900 stock
basis; the second ssa-50 OF a stock
transfer. s1d the third E higher and
The accepted Ofer, $50 per share
The fact that this market '-higglins"
occurred and that certain large stock
holders accepted the cash, or it's eQuiva-
lent instead Of stock in the company,
Haven oonoended. proved the transac-
ton a bona 6de sale, and as suoh the
best Of ali evidence as to value
Price at Sale Quoted
The named price was $12,soo,O0 pay
able I'VE years Later without interest
and allowing a per cent simple inter-
est rate this would reduce the cash
value of the stock to $lO,5Oo,OoO, or Of
the stock and bonds and floating in
debtedness to $50, ,S07, ,Oo2.
Attention was called to the close
agreement OF the two valuations
arrived st by taking the total amounts
paid into the oompany's treasury for
bonds and for stock with that actually
expended through the company's his
tory for land acquisitions and construc-
ton The FIRST totaled $23,O5s. .573-sS,
the second $22.27s.sSs.2s.
or the first total about 100000 was
the amount allowed on stock. although
only a little more than $4,000. 900 was
paid into the treasury, the balance be-
ing undivided profits left in the bust
ness
Value of Works Disputed
Engineer Hermann Schussler's testi-
mony for the company, both as to the
value Of works constructed and lands
and water rights acquired, was sub
jected to a thorough analysis through
nearly 200 pages Of the brief
Schlussler assigned a value to long
list OF pipe lines, tunnels and other
works enumerated, Of s6,3T6. .s13. From
the original records of the company
Haven showed the cost OF the above to
have been $4,426.62s.62, or less by
&1,94s.9S3.3S than the estimate.
Schlussler found that to lay the Ala
media 50 inch pipe line in 1903 cost the
company 1887 cents per pound. The
pipe was the largest, best, and almost
the most expensive ever installed by
the company. but the 1887 cent rate
was seized upon a basis to estimate
the cost OF all the pipe of whatever
size and quality installed by the com
pany during its 40 years Of service.
Testimony lmpeached
Haven impeached the reliability Of
SchIussler's testimony by a yet more
daring discrepancy In 1901 Schlussler
estimated the value Of the company's
lands, water rights and rights Of way
at 5000, 600. Three years later he
gave them a valuation of $2s 600 OO0
Haven quoted the testimony follow
ing:
Question-"You stated at the end Of
your testimony in answer 10 the cues-
tion. Are those the present values?
Yes
Answer-'They are the present val
ues but I did not say that was all
they were worth. A man may state a
thing is worth 500: that does not say
II is not worth $3.50. If II is worth
$3.50 it is certainly worth 800"
such testimony" said Haven, needs
no comment"
Review of Plaintiffs Brief
After citing the Knoxville decision
to the effect that expert witnesses are
for the purpose OF giving concrete
testimony and that the making UP of
general estimates therefrom is the
business Of the court. and thus dispos-
ing Of Sohlussler's $4,000, 900 ''testi-
mony" and other estimates amounting
20 $40, 100000, Haven concluded his re-
view Of the plaintiffs brief as fol-
lows
For the reasons above given il is
submitted that no witness produced
by complainant has furnished estimates
upon which a judicial finding Of the
value Of complainants properties can
be based. II is apparent that IL the tes-
timony Of no one witness, by itself. is
sufficient for this purpose. a value can
NOT be found bV a com hinafion IF tho