Evening capital and Maryland gazette. (Annapolis, Md.) 1910-1922, 1916-03-03
How City Officials Deceive Tax
payers by Hiding Losses OF
Municipal Plants.
IN FINANCIAL REPORT.
Municipal Ownership is Maintained
and Promoted by the Rankest
Kind of Deception.

are operated with great waste and eN-
lravagance. Statistics prepared by Mr..
Maury showed that in a comparable
group OF private power plants in Chi
cage the average rate Of pay TO en-
aloyes is 26 cents an hour. while in the
Chicago waterworks pumping stations
the average rate OF pay is - cents per
nour As an example of comparative
efficiency, Mr.. Maury presented salts
tics TO snow that one oiler in the pri-
yate plants looks after two and one
half times rs much machinery as does
one oiler ia the Chicago pumping sta
ions. Another example of comparative
Efficiency made by Mr. Mamy was tho
howing that for plants of equal horse
9ower tie actual output in HORSEPOWER
ser dollar of daily pay roll was nearly
three times as great for private plants
rs for the Chicago pumping stations
In Maury's report also showed that in
a single year, if there had been fair eff
Iciency at the pumping stations. $12,-
062 worth of coal might have been
saved
Another important point i'm the re-
port OF Mr. Maury is by making valves
and hydrants in the waterworks repair
shop. under municipal control. the city
Daid just about double the prices that
would have purchased superior valves
anl hydrants in the open market. On
hese two items of valves and hydrants
he city wasted in single year the
neat suIl OF $500 ! could continue
for an hour or more citing from Mr.
Naurv's report examples Ct waste and
inefficiency in the Chicago water de
Dartment, but it is sufficient on this
occasion TO state that this report was
unlimited TO the Mayor and City Com
~ with the following statement by the
Commission on City Expenditures;
'The commission is OF the opin-
ion that the wasteful and inefh-
Gent operation of the water works
plant for a long series of years has
imposed a very heavy burden on
consumers and has resulted in
type Of service far below what
might have been rendered.
Although the City Council finds a
way to pay in one year for valves and
hydrants $4,000 more than you or
could have purchased the same in the
open market. it could not find the nee
essary 5000 or $500 to print Mr.. Mau-
rvs report Was il because this re
mort contained recommendation for
changes that would save hundreds of
thousands Of dollars annually in the
operating expenses Of the waterworks
hat it was suppressed by the Mayor
md City Council?
Maintained by Deception,
Municipal ownership OF utilities is
maintained and promoted by the rank
est kind ofd eception-a work Of deceit
hat closely approaches absolute fraud.
Very few, if any, city officials. are
willing TO admit an economic failure of
2 utility plant under their control and
direction Nearly ell OF them are anx-
ious to show that the departments IN
Ter their control are economically
successful. and under such circum-
stances a practice Of misrepresenta-
ton ana deceit in official reports has
become general Although every cit
izen with an ounce of mental pressure
knows that a utility property will wear
out and require replacement within a
certain period of years, no city official
ever considers the important item Of
depreciation when reporting the ex-
penses Of the utility plant Very few
official reports show proper charges oe
interest, sinking fund and damages, and
fewer still present the items of lost
taxes, administration salaries, office
rent, legal service, etc.
After eighteen years of close con-
tact with municipal activities and the
study and analysis of thousands of Of
fetal reports OF municipal utilities,
do not hesitate to assert that 90 ont
OF every 100 of such reports are incom
plete in that they do not show all of
the expenses that are actually incur
red in the operation and maintenance
OF the utilities reported upon Dur
ing the months Of May and June mem
bers of the staff Of Public Service
Magazine personally investigated IS
municipal utility plants in the State OF
Ohio. The investigation of these plant
brought out two very significant facts.
FiTst-All of the reports made by the
officials in charge of these eighteen
plants We're deficient and misleading
in that they failed to show al the ac-
tual expenses of the properties. Sec
ond-In every case. where the official
~ omitted items of expense were as
certained and added to the officially
reported expenses, the plant showed a
heavy annual loss to the taxpayers.
Without going into detail / will
give you some interesting facts. The
Hamilton municipal gas works sas-
tanned a net loss in 1919 of s42.53I
which is about so per cent. Of lis gross
revenues from the sale Of gas. indicat-
ing that the gas rate should be in
creased at least so per cent. to make
the plant self-supporting. The Ham
iltan municipal electric plant lost
$4,000 for the taxpayers in 1913, when
the maximum rate was s cents per
kilowat hour This net loss amounted
to 40 per cent. Of total receipts from
the sale Of current, indicating that the
maximum rate should have been in
creased to about u cents per kiIowat
hour instead Of reduced to 6 cents. as
it was hy the socialist administration
or this year.
Inc Hamilton municipal water works
had al actual deficit Of s55 900 for
1913. or about 100 per cetn. Of the total
revenue from water service. If the