Richmond Palladium (Daily), Volume 39, Number 188, 18 June 1914 — Page 10

PAGE TEN

THE RICHMOND PALLADIUM AND SUN-TELEGRAM, THURSDAY, JUNE 18, 114

ROACH ANNOUNCES SWIMMING EVENTS

The program for the aquatic exhibition to be given by "Y" members. Friday and Saturday nights at the association tank has been completed by Piiyeical Director Roach. All lines o the nautical game will be demonstrated No admission will be charged and ladies as well as men are invited to Bee the work. The swimmers that will take part are Kay Kinder, Logan Keelor Roland Dolnns, Tom Lyons, Ray Lai'rd and Director Roach. Appended is the list of events that will be demonstrated: Dives Plain, front, back, back flip, front jacknife, back jacknlfe. back forward, swan, long, longer, flap jack, forward roll, chain, butterfly, soldier. Strokes Crawl, trudgeor, combined crawl and trudgeor, side underarm, English overarm, breast stroke, double overarm on back, alternate overarm on back, sculling, forward and backward, spiral, waltzing, rythmetic breathing, porpoise, racers plunge and turn, lying on the bottom, quick turn in the water, surface dive, log rolling. Life Saving Holds and breaksland drill: 1 wrist hold, above, below, combined; 2 arms around body from front; 3 coat grasp; 4 close neck grasp Btrangle hold. Rescue Holds 1, double arm; 2, strangle hold; 3, hair; 4, feet and push. Resuscitation. REDUCTION OF WATER (Continued from Page One.) College and at the Wernle Orphans Home, there shall be paid $30 per annum. All hydrant rentals shall be paid quarterly at the dates when meter charges are paid. Elevators, 10 cents per 1,000 gallons. County Court House and Jail, 10 cents per 1,000 gallons unless meter schedule applies. City of Richmond, other than as above provided for hydrants, 10 cents per 1,000 gallons. Ice manufactories, months of June, July, August and September, on an average daily consumption of 60,000 gallons for any one month at a rate of 6 cents per 1,000 gallons. All public and parochial or private schools and churches, 6 cents per 1,000 gallons used in any one month, payable quarterly as aforesaid. All flat rates, and all other rates, not herein specifically mentioned, not on file with the Public Service Commission of Indiana, shall be and remain the lawful rates and shall be payable quarterly in advance. No charge shall be made for tapping the mains and the company shall install at its own expense all services from the main to inside the curb, not exceeding 100 feet each, and install curb box and curb cock. No extensions of mains shall be ordered 1es than 200 feet in length. No main:', shall be required to be laid v. i'.i re the annual income therefrom for lire iuul all other purposes, at the rates fixed in this schedule, does not equal 10 cents for each foot of extension ordered. No service shall be changed from metered to flat rate. The city shall not pay any rental lor hydrants set or maintained outside l he city limits. It is further ordered by the commission that the water company "cease and desist from enforcing its Rule No. 2 i f 10 fee for tapping main) and its Rule No. 29 (fixing monthly meter rental at 25 cents), and each one of said rules are hereby cancelled and annulled." It is further ordered by the commission that the Water Company shall cease to give the Chesapeake & Ohio Railroad Company any preferential or unjustly discriminatory rates." The expense of making an examination and audit of the company's books and in making the valuation of the property amounted to $1,244.34, and this amount, by the terms of the utility act. must be paid into the state treasury by the company within twenty days. The expense incurred represents the salaries and hotel bills of accountants and engineers. The salaries of the five service commissioners are not a part of the expense to be met by the company. The commission, in Its opinion, recites the fact that the Richmond City Water Works was incorporated May 24, 1884, and a contract was made August 9, 1884, with the S. L. Wiley Construction Company for the construction of a complete system of water works for the city of Richmond and Its inhabitant. The amount paid the conrctlon company was $S83,216.04. Other sums expended in additions-, betterments, new construction and replacements are in4loated In elaborately prepared tables to show the total investment In the plant. "The plant was well constructed and has been prudently managed," reads the opinion. "Trwre has been no exhibition of frenzied finance. In a plain, business-like- way the company has diligently proceeded to perform the duties it was created to perform. It. Is to be commended for the manner In which It kas done this. It has furnished the city of Richmond and its inhabitants an abundant sup ply of pure and wholesome water. The pressure for fire purposes has been sufficient at all times. There is no complaint of the character of the wat er now furnished. "The rate charged has been such as to bring contiguously increasing revenues to the company. The salaries charged by the off relate have been just and reasonable. There has been no contention that the officials have looted the treasury of the company. "The city of Richmond is a wealthy, substantial community and has a steady growth in population. With ad ditions and battermants now under construction the Richmond Water Works will be a very valuable and efficient property. It will be well equipped to do its work, and will have a perfect monopoly for the sale of its service to more than 25,000 people. It has no fear of a rival, and a less hazardous investment can scarcely be imagined " The opinion recites that in ascertaining "jr.;t and reasonable" rates that "the most important problem is the determination of the value of the property, actually used and useful for the convenience of the pubilc." This value must be ascertained as of the time when the inquiry is made concerning the rates. Ttoe oommisaloa quotes from rulings of several courts to show the abstract principles of law involved in determining t& valuation of property. Tbese principles are then applied by the commission to the concrete case presented, to it.

The actual cost of the Richmond Water Works as shown by the records of the company is as follows: All expenditures to June 30, 1913 $636,950.44 New work completed since that date 3,633.00 Improvements contracted for and uncompleted 51,429.00 Material and supplies 10,0d0.00 Working capital 10,000.00

Total $712,012.44 From this, states the opinion, there should be deducted the original cost of any replaced property. The extent of such replacement is not exactly clear from the evidence. The total capitalization is now as follows: Common stock, $450,000; preferred stock, $350,000; preferred stock, unissued, $50,000. Total $850,000. On this investment the company has earned and disbursed, or has in its treasury, above taxes and operating expenses the following amounts: Dividends on common stock, $328,125; invested surplus, $296,750; surplus, June 30, 1913, $106,257.19; interest on fund-, ed and floating debt, $373,712.62 Total earnings above taxes and operating expenses, $1,104,844.81. "These earnings," read the opinion, "would appear to be sufficient to satisfy even the dreams of Avarice." "The discounts on stocks and bonds and the original cost of replaced property probably accounts for the difference between the actual investment and the capitalization. "There appears no evidence that any official or officials of this company have subverted any of the earnings of this property to their own purposes. The entire transaction appears to have been clean, honest and highly profitable. "It is our conclusion that this company has not invested in its property, including its working capital and material and supplies, together with contracts let and vet uncompleted, more than $712,012.44". Records Kept Honestly. "From the records of this company every item of legitimate expense during the entire construction of this prop7 u , ascewaiueu. ine rec- , ords have been kept carefully and i , "The actua cost or this property is ' V; Tv I ation. It establishes a fair presumption of the honest value of the property of the Richmond Water Works I that is used and useful for the con-1 venience of the public. "It will be observed that the amount i

it , ue uSH,,u V '"u"nl; (Alvord and Mead) arrive at their conof common and preferred stocks of this . . ', ...i,,.. ia ,,. . (Cr, .in,, i. i. f;i elusions. To them going value is a

company is $850,000. It may be fairly assumed as established bv the evidence that these stocks are worth not , , ri. . : less than the par value thereof. That this Is one element to be considered by us in determining the present value in i US uie pieseni. value ; of the property used and useful for the ! convenience of the public is clearly established by the courts. Little "Watered" Stock. "The stocks now outstanding issued j by the Richmond Water Works repre-1 sent but little, if any, fictitous values. The face value of these stocks went i into this property, less the discounts, and is now represented in such property less the original coat of replaced property, x x x x x "Section 25 of our public sorvice act does not declare a new principle of law. This section provides in sub- j stance that the mandatory deprecia tion fund may be used for new con struction, extensions or additions to the property of the utility or invested, but if such fund is used for new con - struction, extensions or additions to the property, the money from such fund so expended shall never be cbarg - ed to the capital account of suoh utility. "As it was not onlv the rii;ht but the duty of the Richmond Water Works to set aside out of its earnings such a depreciation fund as would forever maintain its property in condition to render reasonably accurate service to the public, we cannot assume that it did not protect its right and perform its duty. The presumption is that a part of this invested surplus was taken from the depreciation fund so required to be set aside as aforesaid. Whatever of new constructions, extensions or additions were constructed from this fund cannot be considered a part of the capital account. "This position is not only sustained by the authorities cited, the highest court in the land, but is supported by reason. Under the law as ft was and as it now is, when this water works exacted a rate that yielded a sum suf-i ficient to maintain an adequate depreciation fund, it was its duty to forever preserve such fund for the use of the public. It had no legal right to expend this fund for .new constructions, extensions or additions and then i

add the sum so expended to its capital j evidence which the rate-making body account. The amount of th ; deprecia- is not only entitled to consider but is tion fund so expended is not clear j bound under the law to weigh in deterfrom the evidence." aiining the fair value of this property. Reps Engineer Alvord. (San Diego Land A Town Co., vs. JasSeveral pages of the commission's per .189 U. S. 438 (444). decision are devoted to a consider-j "This property is assessed at $215.ation of the estimates made by the i 000," said the commission. "We are commission's engineering staff head-j willing to concede that this valuation ed by II. O. Qarman; by John W. Al-! for purposes of taxation is not a convord and Daniel W. Mead, engineers trolling feature in determining the employed by the company, and Edwin j value of this property, but it does look Watts, an engineer employed by the j somewhat anomalous and inconsistent city of Richmond. j that while the Richmond Water "In our judgment, Mr. Alvord, who i Works is called upon to answer under fixed the value of this property, with oath as to the fair value of this propthe additions made by the contract yet ; erty, when such property is being uncompleted, at $980,000, is far above assessed for taxation, it should give it

CIRAWFOMD'S 'Where Greater Values Come From" June Brides Should Awaken to these Big Values in Drop Pattern Rugs 9x12 Tapestry, $15 and $18 values $12.00 9x12 Best Uody, $27.50 values $20.50 9x12 Axminster, special at ' .". $14.00 9x12 Axminster, $22 values, at $16.50 9x12 Axminster, $25 values, at $18.00 9x12 Pro-Brussels, $10 and $12.50 grades, to close at $7.50 11-3x12 Rugs, $38.00 grades, now $28.00 AND FOR THIS WEEK We Offer Big Special Reductions on Our FAMOUS LADIES' RICHELIEU UNDERWEAR See Our Window. We have just received a lot of Imported Sanitary Linoleum for Rug Borders, Bath Rooms, Halls and Bed Rooms, looks like wood floor and can be waxed. Special for a short time 50 cents per yard. W. O. Cisi,wfioiBdl 528 MAIN STREET.

the real actual value of this property," continues the opinion. "Mr. Mead outdoes Alvord by a gooa many thousand. We cannot concede that the estimates made by these gentlemen are reasonable. Mr. Watts, in the judgment of the commission, is equally violent in his conclusion. His estimates of the value of this property, in our judgment, is far below its real value. "Each of these gentlemen was representing his client to the best of his ability. Each threw much light on the controversy. Out of the conflict in the testimony we have arrived a. the result hereinabove set out touching the 'value of this property." Pavement Violations. The total appraisment of the commission's engineering staff was $731,666. This amount, however, included a valuation for pavements over mains not paid for by the water works of $40,917, which was deducted by the commission. Twelve per cent of the present valu of the real estate, which

amounts to $3,404.72, also was deduct ed. This left the true amount of the appraisal as fixed by Engineer Garman as $687,344.28. In his final estimate Mr. Alvord found the present value of the company's property to be $924,305. In this total is included $122,059 as "going value." The commission, however, allowed only $25,000 as "going value." The commission quotes at length from court decisions, bearing on the question of "going value." As to Going Value. "In the recent case decided by the New York Courts of Appeals, the question of 'going value' is very fully discussed," reads the commission's opinion, "and the court found in that case that 'going value' should be allowed, x x x The theory of the New York case appears to be that 'going value' is a term used to represent the early losses of the company while building up its business. The decision makes it clear and beyond cavil that where such expenditures and early losses have been reimbursed by years of successful operation of the plant yielding a fair and reasonable return on the total investment from its in t, that the reaL unrequited ' naAtraa hnv Wn f,,i'ly paid by the people. Under such clrcPumBta t.es and to that extent the question of 'going value' is eliminat 1 ed.1 Continuing the commission's opinion reads as follows: "We are not certain that we fully comprehend the process 1 of reasoning by which these gentlemen peculiar and strange mental concept. . tVl1r. thi,n, .,. scope and import of their theory we ,, .... , j flatter ourselves that we do under stand the result of the application of ,, nf tiaaa ntl-r, in arriv "l "i..v ing at 'going value. "The result as applied by Mr. Alvord ie to add to the completed structural value of the property the sum of $122,059, and as applied by Mr. Mead the result of the theory is to add to ' the structural value of this property $133,980. "Mental Athletics." "The mental athletics employed by these gentlemen in the development of their theory of 'going value' is somewhat shrouded in mystery, but the results are plain and manifest. 'In so far as 'going value' represents unrequited losses of the lean years of thi3 plant, the splendid profits made ! honestly throughout its career have ! certainly most fully and completely ' eliminated it. In so far as the term j 'going value' represents the difference 1 between the completed plant -without use of its service pipes and the same ! property with a full demand for its service pipes, it is very difficult to 'define. However, the fact that it is difficult does not release us from its consideration, x x x x " "In the estimate of Alvord, there is an allowance of $56,942 for paving over mains," the commission continues, taking up the question of allowing the company to capitalize the cost of pavements constructed after the mains were laid. "The money actually expended was $1,829, and this estimate should be reduced to that amount." It was the contention of City Attorney Bond of Richmond that the company should not be allowed to charge to its capital account only the cost of laying mains and not be permit ted to make a big additional charge where pavements were constructed after the laying of mains." An Inconsistent Action The commission held that it was entitled to take into consideration the valuation of the water works property for the purposes of taxation. Where such valuation is sworn to by the officers of the company it is an item of

a valuation of $215,000 and a short while thereafter when the same water works company Is wanting the commission to fix a rate that it shall levy upon the users of its service It should insist tfcat that property is worth about $1,000,000,000. We feel that it is our duty to give some weight te this item of evidence." in reaching its conclusion as to the value of the property for rate making purposes the commission said: Rate Making Values. "After taking into consideration the actual cost of this property as shown by the records of this company, the cost of its reproduction now, the cost of its reproduction new less deprecia

tion, the amount for which ft is valued for purposes of taxation, and all the other evidence in the case, it is our judgment that the fair and reasonable value of this property for rate making purposes Is $750,000. In this estimate we have included $10,000 for material and supplies and $10,000 for working capital, and there is included in tblB sum the contract for new improvements not yet completed, which improvements are to cost $51,429, and $25,000 for 'going value.' "Based on the system ol classification our engineering staff and including in the estimate the two contracts increasing the value of the transmlsBion and distribution system $08,206, we have arrived at the following conclusion as to the itemized value of the property of the water works: "Land, $57,206; transmission and distribution system, $428,202; buildings and miscellaneous structures, $5,000; plant eauipment, $100,000; general equipment, $20,000; paving, $1,829; material and supplies, $10,000; working capital, $16,000; 'going value', $25,000; allowances to cover engineering, superintendency, interest during construction, etc., $52,763. Total $750,000. Engineers' Estimates. "We have, arrived at the above estimate by studying 4 the evidence and applying it specifically to1 the report of our engineering staff. From the estimates of our engineering staff we made the followipjE reductions: Paving not paid fer hf crater works, $40,917; service pipes paid for by consumers, $34,704; ecess for allowances for contingencies, engineering, superintendency, interest during construction, etc., $21,T8; error la computing 12 per cent on value of land, $3,404; excess in material and supplies, $6,973. Total, $10T,76. "We increased the value fixed by our engineering staff in the light of the evidence of other experts and other testimony relevant to fhat issue as follows: Error In appraisal of water rights, $8,000; additions to transmission system completed after the appraisal and before the hearing, $11,777; additions to transmission and distribution system, contracted for after the appraisal and not yet entirely completed, $61,420; increase in valuation of transmission system, $9,069; buildings, $4,036; plant equipment. $4,021; general equipment, $8,578; allowance for engineering, superintendency. Interest during construction, etc., in excess of the audit, $2,196; working capi tal, $10,000; 'going value,' $25,000. Total, $134,000. Value of Pavings. "It is due to our engineering department to state that the value of paving is given at $42,T4,6, as it now is over all the mains of the company, and that its report also shows that the actual value of the pavement cost by the company is $1,829. The reduction of $34,704 showing the service pipes paid for by consumers is not really a question for the engineering department. The estknate made by our staff for interest during the construction and preliminary expenses is based on the uniform practices of the railway commission of Wisconsin. Wa have departed from it in the light of the clear proof established by the audit of the records of this company. The other decreases are self explan atory.' On the subject of fixed charges the commission said: "The only fixed charge against the water works is taxes. The property was assessed for $215,000 upon which taxes were paid in the sum of $5,761.96. In the brief filed by the water works it is contended that the fixing of the true value of this property by the commission will Increase the taxeB 75 per cent of the differences between $215,000 and the value of the property as fixed by the commission. We do not think that

Buying Furniture is More than a Matter of Ordinary Consideration. When You Buy a Furniture Outfit, You Buy Goods

the taxes will be increased to this extent. It ought to be kept in mind that the management of this company haH shown marked ability in dealing with the tax officers. We think it would be unfair to assume that in subsequent dealings with these officials the management will totally lose Its ability to so manage its affairs that the state will not get more than its Jnst share of taxes from Uiis company. We feel that 10.000 would be a just and liberal allowance for the total charge for taxes. Operating Expenses. The commission placed the estimate for the company's operating expenses

ax t,.itu per annum. Considerable Of the rmininn Ik iIv. en over to a consideration of the question of return on the investment. "The rati, tha nnnc. - . I'., .j ii iii i in in u d l pay : for the service supplied by this water! worKs cannot be justly determined! without considering the source from i wncn ine investment in this property came, ine investors in this property have nut in It about $712,012 44 Thj-e. hundred thousand dollars or there abouts represents an invested surplus j uver ana auove reasonable earnings, fixed charges and oneratine nnwnacs About $35,000 of it represents a pure rrmuity, a donation and aid wrenched from the consumers by an unjust rule, (consumers paying $10 to have main tapped) and in excess of said $71312.44. "If the total actual cost of thi ninnt had been taken from the pockets of ine investors and invested in this property, it would be entitled ,to a higher rate of interest or a higher return than it is entitled under the present condition. Fixes 6 Pet. Return. "Viewing this property, the source from which the investors therein were derived, keeping in mind the interest of the public, and keeping in n)5nd the Interest of the investors who are the owners of this property, wo aj e satisfied that a not return of 6 per cent on the value of this property as here JUST WEST OF 6TH ST. tore

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Never before have the people in Richmond and Wayne 'County had the opportunity to buy goods right in season at such prices today, tomorrow or any day in the year, as we make you on good seasonable merchandise. Remember we carry a complete line of Men's and Young Men's Clothing, Furnishings, Hats and Caps, and SHOES FOR THE WHOLE FAMILY.

MEN'S ODD COATS Something that Is hard to find at the price we have them, at $1.S8, $2.98, $3.98 MEN'S SUITS Our suits at $9.98 cannot be equalled at $12.50, at $9.98 MEN'S ODD PANTS Pants that sell in a regular way at $3.00, we sell at $1.93 SILK HOSE Men's iiOc Silk Hose, colors, white, tan and black, 25c

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That Will Not Only Be With You a Number of Years, But Goods that Will Either Make for Beauty or Otherwise in the Home.

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By purchasing where assortments are poor or where quality is not the best, for poor furniture will be distasteful to you, it will not serve the part it should in making: the home pleasant. Come to this mammoth furniture store where stocks are largest and quality is best.

inbefore found is sufficiently large. "This does not mean that this company shall earn but 6 per cent, but it means that this company shall receive 6 per cent net on the value of its property as we found it to be. After the payment of all taxes, of all operating expenses and after setting aside such a depreciation account as tn the life time of the plant rebuild it, it is still permitted under this calculation to earn 6 per cent. We think, under the circumstances of this case, that this is

ample. "We find therefore that provision must be made to levy upon the users of the service of this utility such a rate as will yield money enough to pay the following items: Taxes, $10,000; operating expenses, $25,360; depredation, $6,000; interest at 6 per cent on $750,000, $45,000. Total, t6,360." Number Consumers. The water works, according to evidence introduced at the time of the hearing, has 3.272 meter users and 2,000 flat rate users. Of the 6,220 consumers, 4,798 are residence consumers. The water output for the year ending June 30, 1913, for fire was 1,600,000 gallons; for other than fire service the output was 952,939,000 gallons. Distributing the expense between the city and domestic consumers, the coninaiBston estimates that the city will be required to pay 32 per cent of the grass revenues of the water works and tha domestic consumers 68 per cent. This percentage, the commission estimates, ought to represent the entire municipal expense of the city of Richmond for water. For the year ending June 30, 1913, the superintendent of the water works testified that thtre was distributed 100,000,000 gallons of free water to schruls, hose houses and public fountains of Rich-r-ond and vicinity. Under the commission's prder, issued in accordance with the pubilc utility act, the cjty wyj be required to pay for practically all of its free water. This will in

app's Cut Price

S29 IVIAIM STREET.

That Saves PANAMA HATS The regular $3.00 Genuine Panama, at $3.98 STRAW HATS A hat for every head 39c to $1.98 SILK HATS Don't pay ?0c when you buy the ;ame at 39c UNION SUITS The regular 5 tic gradf at 39c RAPP'S CUT PRICE STORE LSr.l-r'- "

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crease the city's expendiyires. it is estimated, $6,000 a year. Dill Mildly Rebuked. Referring to the failure of the company to include in its schedule of rates filed with the Commission last January a rate of 15 cents which was being granted to a certain class of consumers, about 600 in number, the commission said: "The high character of the superintendent for honesty and truthfulness perhaps entitles him to the benefit of the doubt as to whether his acts were due to intentional violation of the law or otherwise. It is difficult for us to believe that the intelligent management of this company who used this omitted rate almost daily would when they filed this schedule have omitted It therefrom. The requirement that all rates are to be filed with the commission is mandatory and is enforcable by fines and penalties." The commission goes into detail concerning its process of reasoning in determining upon the new schedule of

i rates. I The petition for an adjustment of j the Richmond water rates was filed ! last August, but it was not hard by ! the commission until February tcause of other matters occupying its j attention. Several new legal problems were presented In the Richmond case and the commission members devoted ; much time to a study of the case. The opinion was written by Chairman Ituni can. though all five members joined 1 in deciding the various important quesI tions presented. It was only after fre. ! quent conferences that the opinion was j finally whipped into shape to meet tha i views of all the commissioners. The ! case Is one of the important ones ! which has been decided by the com1 mission since its establishment a lit 1 tie more than one year ago. ; What experts declare to lie a maenii ficent specimen of Tit:an"s work has 'a portrait of Don Giovanni de Castro gallery at Lemberg. Australia. It ii 'and dates about 1516. Store 4 DOORS WEST OF 6TH ST, You B. V. D. Union Suits, thf regular ?l nt grade 89c BOY'S WASH SUITS Just received a new shipment ef Wash Suits. 21- to 7 years. 39c to S9c WHITE OXFORDS The kind you always pay i.r.n Tor, we sell at 9Sc BARE FOOTS For all the family 1 :i t- ' to women's. 49c, 59c. C9c. S9c Vir "

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