The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1911-08-12
Under Law Passed in 1909, !,
City Has the Authority to
Inspect the Books of the
Water Works Company.
CORPORATION ONCE
DENIED THIS RIGHT
Consequently Engineer Maui
ry Was Forced to Estimate
on Cost of Reproducing
Such a Plant Here.

1t is believed by city officials ana
others who have delved deeply into
the water works question that because
Of the fact the Richmond City Water
Works refused to open all Of its books
showing the valuation N based on the
original cost of organisation. construc-
ton and development. Danbney Manry,
consulting engineer employed by the
city to secure an estimate OF the val
ue of the plant. was forced TO base
his valuation on the cost Of reproduc-
ing the property new. July l. 1909. and
that although Maury 10 thought to have
been fair. the valuation 10 too high.
The method which Maury was forced
to employ in arriving at the valuation
10 not considered equitable and fair TO
the city.
Persons interested In this matter
argue that there is great deal Of Diff
ference between the valuation ON the
organization. construction and devel-
opment and valuation Of the plant on
the reproducing Of the property. The
latter method ID considered much
higher than the former because there
are numerous things which will cost
more today than they did at tho time
the plant was constructed. and other
items which make material differ.
ence In the two methods IN arriving
1T = falr valuGs -,
laWsrsnt 81 the statuas.
The board Of works. which coutrae4-
ed with Engineer Maury, did not know
at the time that It could compel the
company to open it, books. The en-
gineer started his work In September.
1909. and In the same year the state
legislature passed m act granting tho
city council the power to examine the
affairs of any corporation In which
the city may be interested or with
which 1t may have entered into
contract or with which It may bo
about to do %. This act. however. 10
said to have bsen passed before
Maury was engaged by the city.
Prior to the engagement Of Maury
the board OF public works. then COM
posed Of John Hallowell. president:
Watson p. O'Neill and B. b. johnson.
conferred with Ed Gates and Supt.
Howard Dill. Of the water works COM
pany and the Representatives OF the
corporation promised and entered into
an oral agreement. according to Mr..
Johnson. to permit the engineer to In
spect the company's books from be-
gagged. the company absolutely refused
to open its books to Maury's inSpec-
ltion.
| According to Mr.. johnson. the COM
pany officials declared that they bad
never said that permission would b
given an engineer to look over the
company's books to Ascertain tho
amount originally inverted and the
amount spent on organization. The
board then considered the advisability
of not attempting to secure an esti-
mate Of the value Of the plant ~ II
presumed that 1t would be impossible
to do 20 under the circumstances.
However, conference was held BE-
tween the board of works and Messrs.
Gates and Dill. which lasted two or
three hours. but the representatives
of the utility company stood firm.
After further consideration the board
decided to employ Maury and also
Edward Pratt, m auditor ard accoun-
tant OF Peoria, Ill.
a Reason for Refusal.
It Ii now firmly believed that the
company. after first making the
statement that It would allow the en-
gineer to inspect the books. decided
that lower valuation would be
placed on the plant in the event the
engineer was not permitted to exam
inc the company's books.
/ Consequently, while Maury is not
being accused Of being unfair by city
officials and others, It is thought that
the valuation Ii much higher than IL
should be inasmuch As he was forced
to employ 4 method which 10 not con-
sidered as equitable ~ other plans.
Pratt was employed TO secure the
original cost Of construction, II possi-
BILE, and to check his report With that
submitted by 3faury. The accountant
reported that something like 4z82. 900
was the original cost Of the plant. but
he could not find the exact amount
paid for stock by the stockholders.
This the company refused to disclose.
go there Is some doubt as to whether
| the above amount represents the
amount paid for stock OF, whether It
also includes profits. The company
failed to assign any reason for its re-
fusaI to open TT books.
In speaking shout the report Of
s -
(Confin,,ed a pas Efehfl