The Richmond palladium and sun-telegram., 1914-02-21
Engineer Watts Arrangea
Tentative Schedule Which
He Is to Submit to Utilities
Commission.
CITY PRACTICALLY
CLOSES ITS CASE
Expert Fixes Replacement
Value of Mains at $22,OS7
While Company Engineer
Says $48,2OS.
Especial to Palladium

INDIANAPOLIS, Feb. 21.-The city
practically closed its case this after.
noon with the conclusion of EngineeF
Watts testimony. Watts, however,
will later present tentative list of
rates for water which the city viii
contend will provide the company with
sufficient return on is invested capi-
tai.
In fixing replacement value on wat
er mains and service pipes, Watts
ala not make an additional charge
Tor pavements over pipes where tha
pavements were put down after the
pipes were laid. Garman. the COM
missions engineer. did not take into
consideration the fact that most OF
the pipes were laid before the streets
We're paved. but he left the question
open TO the commission whether his
course was proper. The question is
now presented TO the commission 20
decide whether pavement is to be
considered in fixing replacement val
ue on pipes laid before street improve
mentS We're made.
Watts fixed replacement value on
mains at s22.0S1. while Garman. in
Guiding charges on all pavements over
Mains. fixed the replacement value at
S4s.20S- Should the commission hold
with Watts that the charge should
not be made TO the capital account
and against the consumers for rate
making purposes. the total valuation
of 1923. .6e6, fixed by the commission 5
engineer. would be reduced. However.
$4,000 is to added to the present
physical valuation of 1898. .6SS, placed
on the company's property by Watts.
because he had not allowed this
amount for working capital at fix
ing a valuation for rate making BUR-
! poses. This fact was brought out on
cross examination il developed that
morning by Attorney Robbins. On
vross examination il developed that
Watts in Fixing a reproduction value
on various items of property accepted
abe figures of the commissions en-
sineer in most instances.
He differed with the commissions $
engineer. however. i'm allowing for
| depreciation. He allowed a bigger
percentage for depreciation. and CON
seauently this made his replacement
valuation lower than Garmans.
Duncan Turns Quizzer.
More points of real interest in de-
. termining the valuation of the plant
were brought ont by Judge Duncan, of
the commission. in the last hour OF
. the session Yesterday afternoon than
had been touched upon in the two
days of the hearing.
After Attorney Bond had finished
| his examination of Engineer Watts.
Judge Duncan examined the witness
and brought out a great many vital
points which have direct bearing on
the case. Engineer Watts was asked
by the commissioner to give his idea
of the item of going concern" Mr.
Watts stated that in most cases he
believed utility should be allowed
to include items in the valuation which
were for all legitimate expenses OF or
ganization. and that a reasonable
amount should be allowed for acquir-
ing the business.
He said that there were four ways
of determining the item of going
concern" but he believed the one
mentioned was the best Mr.. Watts
w he did not consider that the COM
pany should be entitled to any go
ing concern" value. as the earnings in
after years had more than made up the
loss which the company had suffered
in the early stages OF its existence.
Salaries Reasonable.
The question of salaries of the Off
GERS of the company was brought out.
and the commission ruled that the sal
aries paid by the company were just
and reasonable.
From the testimony of Engineer
Watts taken from the books of tha
company that the company had paid
total of s32S.125 in dividends since
its organization. and that stock divi-
dends TO the amount of s296.750 had
been declared from time to time. IL
was also shown that the company re-
allied SITS, 900 from the sale of bonds
when the company was organized. and
S153 $50, from the sale of stock, maxi
ing total investment insthe plant at
the beginning of s32s.25O. In 1898
the company made another bond is
sue of $4,000.
f. F. Hiatt. president of the Dick
inson Trust company. was the first
witness of the afternoon session. He
testified that the Trust company had
taken over the recent issue OF pre-
ferred stock at 81 cents on the dollar
and had sold over 100000 OF it at
10. The difference, he claimed, was
the commission fee of the trust COM
pany for handling the issue
Mr.. Watts i'm his testimony said that
from the books of the company there
was a deficit of s1.6S0. .46 the first year
of its existence. but from then on the
company accumulated a surplus but
did not declare any dividends until
1898 when it paid the stockholders
100000.
Dill on Stand.
II. A. Dill who was called to the wit
ness stand during the afternoon stated
that the company had charged the
consumer Sc for making tap and
laying the pipe to the curb at the be-
ginning. but that later the price was