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Los Angeles herald. [volume] (Los Angeles [Calif.]) 1890-1893, February 16, 1892, Image 3

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Persistent link: https://chroniclingamerica.loc.gov/lccn/sn84025968/1892-02-16/ed-1/seq-3/

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A Statement From the City
Water Company.
What the Company Claims to
Some Idea as to How the Plant Could
Be Purchased.
President Ferry's Communication to
Councilman Innes—An Exhaustive
Statement of Interest to
City Residents.
Mr. Perry, the president of the City
Water company, yesterday gave to Mr.
Daniel Innes of the city council an ex
haustive opinion as- to the present situa
tion of the city's water supply, and the
possibility of the supply becoming the
city's property on unoppressive terms.
The following is in the main the opin
ion, it being too long for entire repro
duction :
Note—Oakland collects from consumers $440,022 00
Oakland collects from city 36,977 00
Los Angeles
San Francisco
1120 gals. I
1:144 gals.
) 76 gals.
476,999 0
225 025 0
$1,494,961 8
its ~
: e
21 cts.
9 cts.
21 cts.
' OB
The legal aspect of this matter has
two sides to it, for out of them grow the
rights of the city and the companies
now furnishing water. Primarily it is
asserted that the city of Los Angeles
owns all of the flow of the river from its
source to the southern boundary of the
city. This is not true, nor anywhere
near the truth. A resolution of the
council, the adoption of a charter by the
people, an act of the legislature, could
not invest the city with title to the prop
erty of some one else. If it coulo, and
it was true that the city owns all of the
water, as claimed, the farms and
orchards now drawing water from what
are called the headwaters, or sources of
•the river, should be paying a rental
therefor to the city.
As a matter of fact there never was a
grant made by the governments of
Spain or Mexico of the waters of the
Los Angeles river to the pueblo Los An
geles. All the rights acquired by
the people were by the use of
the water; and the courts in
dealing with this question have
never taken any other view of it. The
city has the right to take from the river
so much of the water as /nay be neces
sary for the use of the inhabitants there
of, and not one drop more. Please see
the two cases reported in 53 Cal., 1879,
and 58 Cal., 1881, growing out of the
water rights of the Los Feliz rancho,
decided by the supreme court. One
case was decided in 1879, the other in
1881. And three years after the last de
cision, upon the advice of the most in
telligent and reliable attorneys in this
county, that the city had no right 3
which would insure a supply of water,
the council paid Mr. G. J. Griffith $50,
--000 for his riparian right to the flow of
the river, by or over the Los Feliz ranch.
In other words, the city paid $50,000 to
Mr. Griffith for his right to tßke from
the river for irrigation "eight cubic feet
per second"—as the supreme court de
cided he had the right to do. That was
absolute!v all that Mr. Griffith sold to
the city "for $50,000. The water which
he sold would never have made the
slightest difference to the city, or its
water supoy, if he had taken it all from
the river. If the city wants to own all the
waters of the river, it can acquire them,
just as it acquired the rights of Mr.
Griffith to his share of the water which
flows by bis land.
If you will examine my report,
printed January 1,1892, (with the opin
ion of Judge Shaw, in the case against
the Citizens' Water company), you will
find that this subject has been very
fully covered. The money . paid to Mr.
Griffith did not benefit the city to the
value of one cent, as you can see by
reading the deed which" he executed.
He was only bound not to "interfere
with, or lessen by percolation or other
wise, the flow of water in said river."
Lasteummer (in August) four meas
urements were made of the volume of
water flowing in the river by one of the
most eminent American engineers. The
upper measurement was made at the
point where the river enters the Los
Feliz ranch. The next was made 200
ieet above the upper end of the Crystal
Springs Water company's bleeding
ditches. The third was made below
the inlet tower of the water com
pany. And the fourth near the lower
boundary' line of the Los Feliz
ranch. At the lowest point of meas
urement it was found that* the flow
was gallons more per day than
at any of the points measured above.
But I do not want to discuss the wis
dom or folly of the gift by the city to
Mr. Griffith. lam merely pointing to
the water supply. If the city in the
same connection bad purchased from
Mr. Griffith what he afterward sold to
the City Water company it would have
received something of value; for, to that
company, he sold the "right of way for
laying conduits for taking water from
Crystal springs to the reservior; also
the right to enter upon hia land for the
purpose of constructing a -ditch from the
river to the main ditch belonging to the
Crystal Springs company; th» cojnpany
to have the right to use all the water
developed by excavation of any ditches
it makes."
Thiß company did this and developed
a flow of 10,000,000 gallons of water
daily; and yet below the point where
the bleeding ditches run sear the river,
the volume of water in the river is over
8,000,000 gallons more per day than at
any place above it on the Los Feliz
The value of 1 he water developed upon
the Los Feliz ranch depends upon
whether there is any use for it. It is
estimated by an expert that this water
could be carried through the city and
put upon sufficient agricultural lands to
produce a revenue of $000,000 per year,
even if the city did not use one gallon of
the flow. There is no legal objection to
the Crystal Springs Water company
doing this now if it should lay pipes or
construct proper ditches, for the City
Water company could supply the city
with the water "taken from the river in
what iB known as the City Water com
pany's ditch.
Your committee asked me "how the
expert fixed the value of the water?"
and I think this answers the question ;
but in addition to this the engineer
estimated that with turbine wheels, and
with the head which they could have
they could develop 1000 horse-power of
electrical energy without wasting a drop
of the water, and this energy could be
utilized in pumping water upon higher
levels, or in lighting the city. ThUB,
independent of a francnise from the city
to use the water within its limits, the
water developed upon the Los Feliz
ranch and the pipes and tunnels through
which it is conveyed have a value pro
portioned to the income which might be
[Then follows a full statement from
the company's point of view on the suit
of the city vs. the Crystal Springs com
pany on the right of the city to sell
water, and the East Side Water com
The question of the validity of the
contract between the city and the Los
Angeles City Water company iB im
portant in many respects, because of its
far reaching influences.
First—lf it is a valid contract, then
the city has no right to take any step
toward the organization of a separate
system of water supply until the con
tract haß expired, and the city has com
plied with the conditions of the contract,
which are:
Second—That no franchise or lease to
U66 the waters of the river shall be made
to any competing water company.
Third —At the expiration of the con
tract the city "will pay to the parties of
the second part, their heirs, executors,
administrators or assigns, the value of
the improvements made in, by and upon
the said water works,'in pursuance of
this contract, the same to be ascertained
by arbitration, in case the parties can
not agree upon the value thereof, the
said party of the first part and the par
ties of the Becond part, their heirs,
executors, administrators or assigns, to
choose one man each, and the two men
thus chosen will select a third, and the
judgment of the three men thus se
lected shall be final in the premises."
Fou rth —The city never having alleged
that the City Water company was not
complying with the conditions of the
contract, cannot set up a failure to com
ply until it has served notice with a
demand that the alleged omissions be
complied with. While the water com
pany frequently charged the city with
breaches of the contract, the city has
never made such a charge against the
Fifth —Under these conditions (those
of the contract) can the council, or any
citizen, doubt the ability of the water
compauy to secure an appraisement
equal to the sum at which they have
offered their property for sale? And
can there be any doubt about their
ability to chow a value to the property
including all and singular the various
properties which they now own and
lease in supplying the city with water,
which could be greater than the amount
asked? ....
Engineer will admit that there is no
elevation on the river below the Los
Feliz ranch, at which a gravity supply
of water can be obtained for the city,
and that the cost of pumping would so
increase the cost of the water that it
cannot be considered; hence, the city in
building its own works would have to
take its supply from the river as far up
as the orisrin of the present supply. I
mention this to show that all the pipes
and tunnels leading from the Los Feliz
to the city, have a value equal to what
it would cost the city to duplicate them,
even if the water company had no
water to ruu through them.
All circumstances considered, it is ad
mitted without an objection that the
best possible solution of this compli
cated matter would be for a private cor
poration to be created which would ac
quire the ownership of all existing witter
supplying companies; consolidate them
into one, replacing all insufficient pipes
or mains with those of adequate
capacity; extending the system
to meet all present and reasona
ble future requirements. That this
company issue bonds covering the entire
cost. That the council can then adjust
water rates so that they will give the
company a reasonable interest on the
cost of the investment, provide means
for sinking fund to pay off the principal
of the debt at maturity and provide for
operating expense, renewals and better
ments. That when such work is com
pleted, if it is deemed best, the city
shall have the right to take possession
by lease, or any other legal means, of
the property so created and carry out its
conditions and requirements.
Tho only difference of opinion seems
to be as to the price which should be
puid for existing water works, the length
of time the bonds should ruu, and the
rate of interest they should bear. It is
well understood that the law requires
oue twentieth of the principal of all mu
nicipal bonds to be retired each year;
and that is the principal reason why the
bonds of California municipalities have
no market away from home. But even
If they could be sold and one-twentieth
of the principal, with interest to be paid
each year, whether paid from the gen
eral tax duplicate or sales of water, the
rate would be greater than the people
would be willing to pay. Of course, we
must not lose sight of one matter, and
that is, that while water is a ne
rfe am|aking
Used in Millions of Homes— 40 Years the Standard.
realty, it is one of those necessities
which are expensive in this arid region.
The first objection is then that the
price asked, i. c., $2 500,000, for existing
properties of tho city water company is
tuo much. There is but one way to de
termine that. Can the property, or one
answering the same purpose, be created
by the city, or any private corporation
in the interest of the city, foi any less
sum? The estimates of the city engi
neer, which do not pretend to cover in
detail more than three fourths of the
territory now covered by the city com
pany, places the coat of building these
works at a Bum greater than is asked
for all existing sources and facilities of
water supply. Bear in mind, this ques
tion cannot be answered without con
stantly keeping before you all the cir
cumstances and conditions which sur
round it. At no time, and under no
circumstances, will the city of Los An
geles ever be properly supplied with
water at a lesß cost for the whole plant
than $4,000,000, and if the city built the
works tliey will cost a great deal more
than that.
It is hardly necessary to argue further
the question whether, if the city could
legally issue $3,000,000 bonds, could it
sell them? It cannot refund its out
standing debt of over $700,000 at 5 per
cent. Less than $200,000 of the 5
per cent, bonds have been taken
by the local bankers, but no foreign
investor has taken one dollar at that
rate, though the bonds have been on
the market over a year. But it is a fair
question to ask, ac one of the circum
stances or conditions now surrounding
us, whether the people would vote
$3,000,000 of bonds, or even $2,000,000,
to he expended through political agents,
ward workers, etc., in building a water
supply system, the whole of which
would be buried under ground and out
of Bight, so that no one would ever
know whether properly done or not.
But, if they were to vote such a loan,
what would be the consequence? The
interest would have to be paid during
the three years employed in construct
ing the works, for no cne would think
of beginning a work of this kind with
only part of the money in eight.
Interest on the $2,000,000 at 0 per cent
would be $120,000 per year. The law re
quiies the payment of one-twentieth of
the principal each year, which would be
$100,000 more, making a total of $060,
--000 principal and interest which would
have to be paid by the people, without
any returns whatever. But while they
would be paying this they would have
to pay not lees tfian $350,000 per year to
existing water companies, or a total in
the three years of $1,060,000, and they
would then owe $1,700,000 of the princi
pal, making the works cost them when
ready for operation a total of $3,410,000;
but aa it iB well known that the works
could not be constructed under the most
favorable circumstances for less than
$3,000,000, how would the account stand
when the works were completed and
ready to supply the people with water?
The interest and sinking fund for three
years would be $953,000, water rates,
paid to existing companies, $1,710,000,
making a total outlay of $2,063,000, and
leaving a principal unpaid of $2,550,000,
which, added to the amounts previously
paid, would make the grand total of $5,
--212,000 as the cost of the system of water
supply, not equal to that which we
have today, to say nothing of the cost
of additions. And that would not be
all, for seventeen years after taking
charge of the works the people would
have to pay an average annual interest
of $76,500, a sinking fund account of
$150,000 per year, a total of $226,000 (av
erage for seventeen years), add to this
cost of operation, $100,000, and the av
erage yearly outlay would be $326,000,
though the heavy interest payments
would fall due during the first part of
the time. To illustrate: The interest
on unpaid $2,550,000 would be $153,000,
sinking fund $150,000, operation $100,
--000, total $403,000, for the first year
after the works are put in operation.
1 have added nothing for extensions and
repairs either during construction or
afterwards, but I assume that during
the whole period of construction enough
water rates could be collected to cover
such expenditures; though human ex
perience has been to the contrary in this
country in the management by munici
palities of water and lighting plants.
The rates charged for water would not
be increased by the city, but the de
ficiency under political management is
always found on the tax duplicate. If
you want a first class illustration, please
investigate our zanjas.
Now let us look" at the other proposi
tions, i. c., that is the purchase and con
solidation of the present systems, their
extensions and improvements, upon a
plan agreed to by the city and company,
the whole total cost in no event to ex
ceed $4,000,000, what would be the cost,
and how would its burdens bear upon
the public? I have hereto-fore presented
gome figures, showing partially the
practical operation of such a scheme,
and I reproduce them herein. In these
estimates I have calculated upon a ma
terial reduction in the rates to the
poorer consumers, which would carry
out along the line and make an average
deduction of 15 per cent in the amount
of revenue now collected by the various
water companies. But in order to equal
ize this matter and put the burdens
where they belong, making the rich
man pay his shore, I have considered
the necessity of levying a tax sufficient
to pay for all of the water consumed in
street sprinkling and fire protection.
My figures are based upon the theory
that the company receiving the fran
chise would operate the works, and that
before the franchise should become
effective, the company would be re
quired to give a bond in a sum of not
less than $100,000 to perform any and
all of the conditions of tho franchise;
and not only that, but that the fran
chise itself should provide that in addi
tion to the penalty of the bond, a viola
tion of any of the conditions would
work a forfeiture of the franchise. If
the city should take charge of the plant
and manage it economically, the figures
would be the same.
It is conceded that the whole plant,
or such a plant as is necessary, could be
erected for the sum of $4,000,000, this
amouut being the maximum sum esti
mated, and that all extensions and re
newals and betterments should be made
out of current revenues, the control of
the whole matter would always be in
the hands of the council, which could
adjust the rates bo that the revenues
DESPONDENCY, and all other diseases of
mind and body, produced by youthful follies
or overindulgence, quickly and permanently
Dr. Steinhart's
Or 6 bottles for $10, or In pill form
at same price.
Call on or write to.
Dr. P. Steinhart,
Room 12, 331 1-2 South Spring St.,
(Opposite Allen's Furniture Store),
Los Angeles, - - - - Cal.
Special and infallible specifics also prepared
for Gonorrhoea, Gleet,' Syphilitic and Kidney
and Bladder trouble.
communications strictly canflden
tial and private.
OFFICE HOURS: From 9 a. m. to 4 p. m.
Sundays, from 10 to 12. 11-14 6m
would not exceed say 6 per cent interest
on $4,000,000, operating expenses and
renewals, repairs and betterments, and
that after ten years there should be
created a sinking fund amounting to
one-fortieth of the debt, or in any case
such an amount as would extinguish the
entire debt at the expiration of the
It might be well to provide that the
city should receive the sinking fund and
pay off the bonds at maturity, if this
can be done legally. The amounts to
be raised during the first ten years
would be as follows:
lutere«t on account at 6 per cent on
$3,000,000 $180,000
Operating expenses 100,000
Revenues, after deducting "present
rates, an average of 15 per cent. . .$230,000
To be raised by taxation for sprinkling
Mnd tire protection, 1 mill rale on
$50,000,000. ~ 50 000
Interest on at 6 per cent.. $210,000
Operation 100,000
(Increased consumption being 10 per
cent over volume at beginning of
last year) $23,000
Water sales at rates of first year. 253,000
Increase on taxable values in two
years 10,000,000
Tax of one mill on $60,000,000 60,000
Revenues, including Increased con
sumption, at rales of last year $326,000
Tax of H mill on $65,000,000 32,500
Interest on $4,000,000, 6 per cent $240,000
Operation 100,000
This would leave a margin of $18,000
at the end of the third year, and after
that date the increase of consumption
would admit of a still further reduction
of the rates each year, until the tenth
year, when the accumulation of the
sinking fund would have to begin, and
rates would have to remain stationary
for two years, after which time a reduc
tion in rates, equal to the increase in
consumption, could take place, for the
reason that at no time during the entire
fifty years could the expenditure de
mand ever exceed $450,000.
At the end of ten years, when the
first $100,000 of the sinking fund shall
have been paid into the treasury, then
the company could be leleased from the
$100,000 bond for the fulfillment of all
their agreements.
I have not noticed that any one has
taken into account a matter which our
expert covered in his report against any
attempt at building a works in competi
tion with existing ones, even if we could
do so legally, and the same objections
would apply to waterworks built by the
The existing company has its own
water, its own pipeß, and its connec
tions are made with 9000 houses, and
the Citizens' company has 3000 more,
making about 12,000 connections. There
is no law to make them take up their
pipes, and they would always undersell
the competing company. The existing
companies now owe but $500,000, and
could soon pay that out of earnings.
With no debt, they could run and
make but a trifle over operating expenses
until they would ruin the other com
pany. If the city was in competition
with them, they could reduce their
rates to operating expenses, and thus
the taxpayers would have to pay inter
est and principal of a bonded debt which
would be thrown away, for the city
could get only the business of the con
nections hereafter to be made.
The property owners would not change
to the new supply at the same rateß, be
cause they would lose not only the $12
paid for connections they now have, but
would have to pay for new ones, which
if put in at cost could not be made for
less than $9 each.
The 12,000 connections have cost the
property owners $144,000, which would
be a dead loss, and new connections
would amount to $108,000 more, or a
total loss to the people of $252,000.
These are a part of the reasons why no
capitalist would risk his money in any
scheme which does not include existing
water companies.
Another point is the repair of streets,
which is not taken into account by the
city engineer or any one else. The cost
of replacing the streets would be not
le3S than $327,000, which would fall
upon tho competing company; but if
the city built the works, the taxpayers
or water consumers would have it to
pay. Add this to the loss by connec
tions and the total amounts to nearly
$1,699,000. Add this to the cost of the
new plant already given at $5,212,000,
and you JjWfe a grand total of cost to
the citTKgSPSS,79I,OOO, or, in round num
bers, $0,000,000.
The Doctors Are Utility.
Grave mistakes are made by physicians in
treating Heart Disease. The rate of sudden
deaths is daily increasing. Hundreds become
victims of the ignorance of phyticians in the
treatment of thfi d'sease. One in four pc sons
has a diseased heart. Shortness of Breath,
Palpitation and Fluttering, Irregular Pulse,
Chok ng Sensation, Asthmatic Breathing, Pain
or Tenderness in Bide, Shoulder or Arm,
Weak or Hungry Spells, are symptoms of
Heart Disease. Dr. ifiles'sNew He«t Cure is
the only reliable remedy. Thousands testify
to it* wonderful cures- Books free, told by
C. H. Hauce.
An Extended Popularity. BROWNS
Bronchial Tbochks have tor many years been
the most popular article lu| use for relieving
Coughs ana Throat troubles,
That may not occur again in a lifetime. We are forced to vacate our store, No.
126 North Main street, and will offer the entire stock at auction, consisting in
part of Diamonds, Watches, Rings, Chains, Bracelets, Optical Goods, Clocks,
Solid Silver Ware, Table Cutlery, Novelties, etc., which we will sell to the highest
bidder, without reserve. For convenience of sale, the stock has been removed to
our new store, No. 125 South Spring, where the sale will take place, commencing
Monday evening, at 7:30 p.m. Remember that our necessity is your opportunity,
and we are anxious that our old and regular customers avail themselves of this
extraordinary opportunity. A child can purchase at this sale as well as an
expert, as every article offered will be guaranteed strictly as represented. Balea
every evening, 7:30 p.m.
Ladies respectfully invited to attend our sales.
H. A. REED, Auctioneer.
■ —
The finest Orange and Lemon Lands are found in this flourishing colony and
the location is unsurpassed.
Another pipe line is about to be constructed, bringing additional lands under
Water is sold with the land. No bonds; no uncertainty as to quantity or
price of water. Water conveyed in pipes to the lands. The lands are adapted
to the culture of all fruits common in Southern California.
Here is the place for Homes and Investment.
Is a new and attractive subdivision of a portion of the high mesa land of South
Riverside Colony, and being frostless and not subject to injurious winds, offers
special advantages for the culture of the
•3 LEMON.iC-
The best authorities in Southern California commend these lands for the rais
ing of Lemons. One syndicate is arranging to plant IUOO acres in Oranges and
Lemons, one-half each.
Aside from its wonderful advantages as a fruit-producing colony, South River
side is an important manufacturing point. The Pacific Clay Manufacturing com
pany's vitrified sewer and water-pipe works —the largest on this coast —are located
here; also the Porphyry Paving company, the Standard Fertilizing company and
two pottery works. This is the shipping point for the famous Temescal tin mine
plant. A company is now being formed to work on a large scale the finest cement
rock found in the United States. This latter company will probably employ 200
or more men. The material is at hand for additional manufactories.
The Town of South Riverside
Contains numerous business houses, and there are churches, hotels, a bank
and all other improvements necessary to make a thriving town.
Come and see our new tract before purchasing elsewhere, taking the Riverside
and San Bernardino train via Orange, leaving Los Angeles at 11 a.m. and 5 o'clock
p.m. full particulars call on •
L_. nr. GRAVELS,
Agent at Los Angeles, Bryson-Bonebrake Block; or address
SOUTH RIVERSIDE, CAL. 12-21-eod-lta
Six miles froDi Sun Bernardino. The bet Winter Kesort for the invalid in Southern Cali
fornia, and the peer of any in ihe world for curative merit. Hotel 125 rooms. Electiic lights.
Elevation, 2000 feel. Hot water and mud baihs. Dally stage and mail. All kinds of
diseases are cured. Kates fion $3 to $20 per week. Call at the office of Turkish Baths, 230
smith Main street, or address
H. 0. KOYEB, M.D , Lessee and Manager, Arrowhead Springs, Cal,
2-12-fii siin-tues-tf
$11.25 p er Ton, 65 Cents Per Cwt.
Yard, 338 North Main Street. Telephone 1047.

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