Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-11-10

investment" as the water department
speaks of it is comparable to speaking
OF Secretary Melons Investment" in
the United States Government. Be-
cause Mr.. Melons Treasury Depart
ment raises revenue and disburses 1t, Is
IT possible to regard the United States
Navy, for instance, as Mr.. Melons In
vestment, upon which he receives
certain intangible and personal re-
turn?
OF course not.
Inclusion Of Water Tax.
II the receipts from sale of water"
were taken into account in computing
the Districts return as Maj. Somervell
and the water department compute 1t,
the return on the investment would be
1877 per cent. And why should these
receipts from sale of water not be taken
into account as investment IN the
water plant? Is there any Fundamental
difference between the water taxes palo
by citizens and the real estate ano
other taxes? Both have been collected
and expended by the District on the
water system-nore from water taxes
than from general taxes. In return
for his water taxes the citizen receives
water delivered in his home, plus the
more Intangible benefits of clean streets,
green grass, fountains that spout crys-
tai streams from the nose, eyes, ears
and mouths of statues; gold fish ponds
and the protection against f1re that
lies in a plentiful water supply. In re-
turn for his real estate and other taxes
the citizen receives police ana nTe
protection, the BENEFITS OF his scnooi
and library systems, the use OF paved
streets, parks and the manifold advan-
tages OF community effort, including
the pleasure of reading the annual re-
ports of his civil servants.
Arriving at Investment.
The Districts investment in the
water plant would properly be arrived
at bv taking into consideration all the
funds. contributed through tax-paying
residents of the CITY, including water
tax payers, and expended upon con-
structing and improving the water
plant. One would not include the
money spent on maintaining the plant
or In replacing worn-out equipment.
BY this method it would be found that
the Districts total investment Is APP
proximately 3.54O, 1923. ia figure, by
the way, that is used by the United
States engineer as capital investment
upon which to compute the return In
extension to property"
To find the Districts return on this
investment by the method used by the
United States engineer, one would di-
vide the monetary value OF the water
used by private consumers in the Dis
trict, computed as the engineers COM
pute it, at $50 a million gallons, by the
investment, and the result would be 4.99
per cent. not $50 per cent.
Using still another method, the annual
-
'344 12) could be conceived as the Dis
trict's income from its water plant, and
this income, divided by the investment
figure, would give return Of approx
mately $50 per cent.
But another fact must be taken into
consideration: The income above cited
is based on water rates that, in turn,
are so fixed as to yield an income sur
ficient not only to maintain the supply
and distribution systems, but to finance
the greater part of the extensions ana
improvements to the distribution sys-
tenn. The tendency is therefore to raise
the water rates as the demand for the
water neceSsitates expansion of the wa
ter system. The water plant, in addi-
ton, furnishes free water to the Fed
eral Government and its agent. the
municipal government; third of 1t GOES
to waste and yields no return. Only IS
per cent of the water that the residents
of the District pay for purifying and
pumping into the mains Is sold. Forty
seven per cent yields no revenue. 1t IL
impossible, therefore, to compute the
Districts return" on its investment by
considering the revenue from sale or
water as income. That revenue Is
higher than it should be. The greatest
return that the District could receive
on its water plant would be cheap wa
ter, not high water rents.
Another Interesting Fact.
-, There is one other interesting fact in
the table submitted to the Budget Bu-
reau as part of the water departments
report.
That lies in the items that go to make