The Virginia enterprise., 1912-11-15
WOULD PAY MORE MONEY
Light all wltlr. conllttse Makes Rspqlt
otf.dle Practically ;5o,ooo MOI, for.
P|aat, bit Does Not Specify itlns ID
buras.neDoan.I| Report Found EHol.
'eus Aside from Real Estate Variation


In difference to numerous inquir-
es as 10 the offer of the city council
o the light and water company, a.
'eady formally accepted, the Enter
Prise reproduces the document in
ull for the edificatlon of the tax
payers of the city whose property
stands as secu'itp for any bond is
'ue which may be authorized:
To the Common Council. of the City
of Virginia:
Your special committee to negoti-
ate with the Virginia Electric & Wa
ter company to determine a fair
price for which the property and
business Of said company may be
acquired by the city of Virginia sub
nit the following report:
Upon the same day on which your
was appointed it held
meeting with the managing owners
Of said company and discussed at
length the differences existing in
our views as to the value of the,
water and light plant. The view
of your committee had been that in
a general way the values of the
tangible property of the company
as given in the Bruins & Mcdonnell
report were satisfactory, but the
values given by said report to the
Intangible property, or the "going
concern or franchise" values of
the company, were too high: The
view of the managing owners of the
company had been that various items
of the tangible values of the Burns
& Mcdonnell report were too low.
but the intangible, or "going con-
cern," or franchise" values. were
The work of your committee was,
therefore, to adjust these conflict
ing views, so that an agreement
might be reached that would be sat-
isfactory to all parties concerned.
The sole desire of your committee
was to arrive at all these values on
a basis Of what was fair and just to
both parties. The city of Virginia
could afford to pay for the property
what 1t was worth, but could afford
to pay no more.
At the first meeting your commit
tee ascertained from the representa-
tives of the company, in a fairly def
mite way, which items Of the Burns
& Mcdonnell report they considered
too low, and explained to them
which items were, in the opinion of
your committee, too high. Then
the committee, in accordance with
your previous authorization, retain
ed Mr.. Charles L. Pillsbury, consult
ing engineer of Minneapolis, to ad-
wise them as to these matters. Mr..
Pillsbury had done such eminently
satisfactory work for the city of Du-
luth and for the county of St. Louis
In his valuations of an electric light
plant and. q street railway plant in
Duluth during the past year or two
that we believed his ability and in
dependence could be safely relied
on by us, and the result Of his work
confirmed that belief. He came to
Virginia and made a re-examination
of the values of the Burns & Me-
Oonnell report, concerning which
there was dissatisfaction. Several
meetings were had with him and the
representatives in which
words were spoken plainly and
frank and thorough-going discussion
was had. Mr.. Pillsbury had secured
present prices on the items in dis
pute from many sources and had
made thorough examination of the
of parts Of the plants
concerning which the Burns & Nc
Donnell report had been criticized.
His conclusions were necessarily af-
fected somewhat by differences on
prices now and on the date of the
Burns & Mcdonnell report. The re-
suit was that some items were found
to be too high, others too low. The
difference on these items favored the
On the depreciation
charge Mr.. Pillsbury thought the re-
port was too low, and on this item
favored the city. On intangible, or
going concern" or franchise" val
aes, he repudiated the method used,
and discarded the valuations given
In the report, and explained to your
three other methods
which are in general use. One of
them has for years been in use by
The Wisconsin state commission, an
other was a method used by Bion J.
who has been consulting en-
yineer on such matters for the cities
of Chicago and New York, and
third was one that had been used by
him and Professor Cooley of the
- nFsoha~n~ @~n - IT,