The San Francisco call., 1909-11-30
WATER SUPPLY
BOND VOTE TO
BE THREEFOLD
Separate Propositions Will Have
to Be Submitted to Make
Proposition legal
Counsel for City Arrive at This
Decision After Locking Care-
fully Ito Charter

cord better with the necessities 81 i.'f
occasion
You have fixed your price at fS5,-
600 OOe" he said, in substance, fand
that represents your belief as to the
value Of the property. II is what you
figure Il is worth TO yourselves. But
there is a more important consideration
and that is the value the people of San
Francisco win set upon IL From your
engineers we learn that il will require
about 81 .500, 600 10 bring your plant up
10 the needs Of the city. Your mains
must be extended into the new and out
living districts A new pipe line is
needed urgently TO bring more water
from the peninsula reservoirs.
SHOULD MODERNIZE SYSTEM
The burden Of this construction, we
feel! should fall on the company. We
propose. therefore, that you either do
-1his work or subtract the sum Of 81
$4,000 from your valuation, making
your Offer sS2. 800. .OOe. DO not leave the
matter L. such shape that il can not
meet with the complete approval OF tie
people They are The final arbiters and
II is OF them that you must think
Il appeal TO you. gentlemen, as men
Of san Francisco. as men who hold
dear the welfare OF your city and who
are willing to strive earnestly 10 settle
this Vexed question. During the last
there have been none Of those nauseat
ing performances that have brought
disgrace on the city. During the presi
dencies of Mr. Payson and Mr.. BOurn
YOU have had occasion TO oppose the
city. but in your litigation there has
been nothing that omends the law.
an mindful OF that when 1 appeal to
you again to help in the settlement of
this all important matter at this time.
Al the conclusion of the mayors
words there was an informal exchange
and then the Spring Valley directors
retired for a few moments. In is min
utes Captain Payson, delegated as
spokesman. appeared and announced
that Spring Valley could not recede
from it's original position. The offer of
S35, 900. 600 stood unchanged.
BANKS DEEPLY INTEREsTED
The conference was resumed and
views exchanged. Bourn stated that
he was authorized 10 announce that
the Hellman interests, the heaviest
bond holders, were willing, in the event
of the purchase, 10 surrender their
bonds for cash.
Frank p. Anderson, president of the
Bank OF California. then urged upon
the supervisors the advantages of an
early adjustment Of the water situa-
1ion.
derson. ''is interested far more deeply
3n bringing about some settlement than
in reaping any financial profit. The
bank and its directors hold Spring VAL
ley securities TO the amount of only
s670.O00. But we are trustee for other
property in and about San Francisco to
the amount OF $75.000,000 or S100. .000,-
000' II is in this that our interest lies.
This property is all affected by the
water situation. With the water ques-
ti6n well and satisfactorily settled the
property is just so much more secure.
The first question an investor asks is
How about your water supply2 That
IS the first essential for commercial
Upbuilding."
SS5.OOO,OO0 BOTTOM PRICE
Gentlemen" said Bourn, 1876. 900. 900
is low price. IL is our lowest price
II is less than ] believe the property
worth. I believe you would make a
great mistake should you neglect this
opportunity. ] DO not think the chance
will come TO you again. If you reject
this H. viii be the last offer that will
come from me-"
The city officials then requested that
the Spring Valley offer be submitted
anew in legal form. A letter was then
drawn up and sent to the board of su-
pervisors. rhe letter imposes the con-
ditions previously named. that the
100000 impounded in the rate contro-
versy go to the company; that the city
confess judgment in pending litigation,
and assume such suits as are now
directed against Spring Valley.
HOW VALUE Is FIGURED
The letter further says in part:
we urged upon your committee our
belief that a fair and reasonable value
OF the property owned by the company
we felt that we could satisfactorily
demonstrate a value exceeding 10000
600 by taking as a basis the estimate
made for rate fixing purposes in Janu-
AIRY. 1903. by the then city engineer, c. f.
GrUpsky, and adding to that estimate
elements Of value that were mentioned
hut not then determined by Mr.. Grun-
sky. property and values not then con-
sidered by him, increases OF value that
have occurred since his estimate was
made and capital expenditures since
1903. and deducting therefrom the val
ues OF properties sold by the company
and a reasonable allowance for de-
probation OF structural parts.
The term, physical property as
herein used. is intended TO include all
she assets OF the company with the
exception of cash. bills receivable, ac-
counts outstanding, bonds and securi-
ties. other. than stocks, in subsidiary
companies and irrigation companies
connected with the property offered
The offer is for cash or its equivalent
The offer expires January 90, 1910
Subject TO the above and in COM
pliance with your request. we offer:
ITO sell the entire physical property
OF the company (free OF debit for the
sum OF 5000 000."
SITUATION COMPLICATED
Supplementing this communication
was a memorandum of alternative Of
fers which had been previously con-
sidered and rejected.
II was a somewhat complicated sit
uation that the supervisors faced at
the noon hour after they had ended
their conference with Spring Valley
and had received its offer in due and
legal form
Supervisor Johnston, chairman OF the
public utilities committee. took the
matter in hand and after a consultation
with the city's legal stan. determined
to preserve all the city's rights for
the time being in the Sierra project
as scheduled for the election OF De-
cenber 2S.
NY personal desire said Johnston.
lis to go forward with the election
FOR the Lake Eleanor and Tuoiumne
river project unimpeded by Spring Val