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 REPORT TO THE MAYOR AND 
 CITY COUNCIL 
 
 ON 
 
 WATER RATES 
 
 FOR THE PLANT BELONGING 
 TO THE 
 
 PEORIA WATER WORKS CO. 
 
 PEORIA, ILL. 
 
 September 8, 1910 
 
 By Benezette Williams 
 C. B. Williams 
 

 
 
 
 
 
 
 
 
 

 TABLE OF CONTENTS 
 
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 >05 
 
 PAGES 
 
 Letter of Transmittal.’. 3 
 
 Rights and Responsibilities of Public Service Corporations and Munici¬ 
 palities .. . 7 
 
 Investment. 9 
 
 Method of Finding Investment.. 10 
 
 Controlling Principles of Public Utility Values. 10 
 
 Court Decisions and Public Utility Values. 13 
 
 Valuations for Sale and Rate Making. 17 
 
 Effect of the Appleton Case. 22 
 
 Limitation of the Investment. 27 
 
 Peoria Water Works, Historical, Descriptive and Financial. 29 
 
 Investment for the Peoria Water Works. 43 
 
 Returns. 43 
 
 Needed Improvements. 47 
 
 Water Consumption and Meters. 52 
 
 Application of Meters to Peoria Water Works. 59 
 
 Cost of Installing and Maintaining Meters.. 62 
 
 Reasonable Rates. 63 
 
 Proposed Changes of Water Rates. 73 
 
 Some Controlling Principles in Rate Making. 73 
 
 Meter Rate Schedule for Peoria. 79 
 
 Proposed Flat or Fixture Rate Provisions. 82 
 
 Statistical Table of 39 Municipal Water Works Plants—Appendix I.... 83 
 
 Table of Water Consumption, Population and Revenue of Peoria 
 
 Water Works Plant—Appendix II. 87 
 
 Going Value. Diagram and Table of Computations—Appendix III. 91 
 
 Map of Peoria Water Works System with Proposed New Supply Main 
 
 —Appendix IV. 95 
 
 Diagram, Showing Water Pumped, Population, Number of Services and 
 
 Miles of Mains—Appendix V. 97 
 
 List of Free Water Takers—Appendix VI.99-102 
 
 Statistical Table of Peoria Water Works—Appendix VII. 103 
 
 o 
 
 * 
 
 <\1 
 
 
 
INDEX 
 
 PAGES 
 
 Capitalization of Peoria Water Company... 37 
 
 Comparision of Peoria Statistics with Municipal Statistics. 65 
 
 Contract of Moffett, Hodgkins & Clarke. 38 
 
 Cost of Old City Works. 30 
 
 Cost of Properties to Both Companies.41-43 
 
 Date of 
 
 Initial Construction by City. 29 
 
 Reconstruction and Sale to Company.29-35 and 36 
 
 Receivership. 38 
 
 Receiver’s Sale. 36 
 
 Richwoods Water Co’s. Formation. 36 
 
 Description of Old City Works.29-31 
 
 Description of Reconstructed Works.32-34 
 
 Description of Richwoods Water Co. Property. 36 
 
 Decisions, Court 
 
 Burnswick, Maine Case.16-18 and 23 
 
 Cedar Rapids Gas Light Co. Case.17-18 
 
 Consolidated Gas Co. Case.17 and 44 
 
 Galena, Kansas Case. 16 
 
 Gloucester Water Supply Co. Case. 16 
 
 Kansas City Case.13-15 and 25 
 
 Kennebec Water District Case.15-16 
 
 Norwich Gas & Electric Case. 16 
 
 Omaha Case. 17 
 
 San Diego Land Co. Case. 18 
 
 Stanislaus County Case. 18 
 
 Urbana Case.44-45 
 
 Decisions, Wisconsin R. R. Commission 
 
 Antigo Water Co. Case.20-21 and 24-45 
 
 Appleton Case. 22 
 
 Cashton Light & Power Co. Case.19-20 
 
 Menominee & Marinette Light & Traction Co. Case. 20 
 
 Madison, Wis. Case.45-46 
 
 Wisconsin Telephone Co. Case.20 and 26 
 
 Improvements Needed 
 
 Approximate Cost Various Items of.47-52 
 
 Location and Character of.47-52 
 
 Map of New Supply Mains—Appendix IV. 95 
 
 Need of Improvements.47-52 
 
 Timliness of. 52 
 
 Total Cost of. 50 
 
 Investments 
 
 Conception of. 9-10 
 
 Limits of.27-29 
 
 Method of Finding. 10 
 
 Offsets to.51-52 
 
 Peoria Water Works Co. 43 
 
 Rate of Returns on. 43-47 
 
 Table of Various Municipal Plant—Appendix I. 83 
 
 Liabilities of Peoria Water Co.38-39 
 
 Liabilities Assumed by Peoria Water Works Co.40-41 
 
 Liabilities Assumed by Richwoods Water Co. 40-41 
 
 VII. 
 
Meters 
 
 Causes of Imperfect Metering. 
 
 Comparision of Metered and Unmetered Lake Cities. 
 
 Cost of Setting, Cleveland, Ohio. 
 
 Cost of Maintaining, Cleveland, Ohio. 
 
 Cost of Setting and Maintaining, New York City, Freeman’s 
 
 Estimate. 
 
 Cost of Setting and Maintaining Peoria Estimated. 
 
 General Effect of. 
 
 Effect of 
 
 Cleveland, Ohio. 
 
 Columbus, Ohio.. 
 
 Des Moines, Iowa. 
 
 Fall River, Mass. 
 
 Lowell, Mass. 
 
 Madison, Wis. 
 
 Milwaukee, Wis. 
 
 Minneapolis, Minn. 
 
 St. Paul, Minn. 
 
 Peoria, Number of. 
 
 Policy of Peoria adopting. 
 
 Operating Expenses, Peoria. 
 
 Peoria Water Works Statistics—Appendix VII. 
 
 Population 
 
 Diagram Showing Growth of—Appendix V. . . .. 
 
 Present—Appendix II. 
 
 While Old City Works were in Operation. 
 
 Public Service Corporations ‘ 
 
 Discussion of Theory of Valuation of. 
 
 Rights and Responsibilities of. 
 
 Rates 
 
 Classification of Peoria. 
 
 Discrimination in Peoria. 
 
 Discussion of Cleveland Meter. 
 
 Effect on Peoria Revenue of Present Meter. 
 
 Fixture in 31 Municipal Plants. 
 
 Fixture in 375 Cities. 
 
 Meters in Peoria, to Cover Cost of Water. 
 
 Meter Minimum too Low. 
 
 New England W. W. Association Report on. 
 
 Peoria Minimum Meter. 
 
 Peoria Public Service. 
 
 Principles of Making. 
 
 Proposed Basis for Meter. 
 
 Proposed New Ordinance for Meter. 
 
 Requisites of Reasonable. 
 
 Satisfactory Flat. 
 
 Variety of. 
 
 Revenue 
 
 Comparision With Operating Expenses of Total. 
 
 During Receivership. 
 
 Old City Works.. 
 
 Sources to Carry Additional Expenditures. 
 
 Time to Produce a Remunerative. 
 
 Various Municipal Plant.—Appendix I. . . 
 
 Year Ending December 31, 1908. 
 
 PAGES 
 
 .70-71 
 
 .58-59 
 
 .62-63 
 
 .62-63 
 
 62 
 
 63 
 
 53-54 
 
 55 . 
 55-56 
 
 59 
 
 57* . 
 
 57*4 
 
 58 -* 
 
 54 
 
 56 
 56 
 59 
 73 
 
 63-64 
 
 103 
 
 ' 97 
 ' 87 
 31 
 
 25-29 
 
 7-8 
 
 67 
 66-67 
 75-76 
 
 70 
 
 69 
 
 68 
 72 
 72 
 77 
 
 70 
 65 
 
 72-75 
 
 79-80 
 
 80 
 
 63 
 
 70 
 
 77-79 
 
 63 
 40 
 
 30-31 
 
 50 
 
 9 
 
 83 
 
 64 
 
 VIII. 
 
Services 
 
 Diagram of Peoria—Appendix V. 
 
 List of Free—Appendix VI. 
 
 Peoria Number of. 
 
 Per 1,000 Population Number of. 
 
 Various Municipal Plants—Appendix I. 
 
 Value 
 
 Controlling Principles of. 
 
 Distinction between Cost and. 
 
 Old City Plant to Peoria Water Co. 
 
 Original Cost and Deficit Method of Obtaining. 
 
 Peoria Water Works Co. Jan. 1, 1909. 
 
 Similarity of Sale and Rate Making. 
 
 Going Value 
 
 Definition of. 
 
 Diagram and Computations of—Appendix III. 
 
 Limit of. 
 
 Old City Works. 
 
 Water Consumption 
 
 Peoria—Appendix V. 
 
 Diagram of 
 
 Present and Past—Appendix II. 
 
 Present Daily Average and Maximum. 
 
 Per Capita, Based on Freeman’s Curve, Estimate of 
 
 Per Capita, When Fully Metered, Estimate of. 
 
 Percent in Future of Water Metered, Estimate of... 
 Per Capita in Various Cities With Percentage Metered.. 
 
 Total Metered 1908. 
 
 Various Municipal Plants—Appendix I. 
 
 Water Supply- 
 
 Description of Present. 
 
 Limits to Present. 
 
 Protection to. 
 
 PAGES 
 
 .... 97 
 
 ...99-102 
 .... 59 
 
 .... 59 
 
 .... 83 
 
 ....10-13 
 ....10-13 
 .... 32 
 
 .... 19-27 
 .... 63 
 
 ....17-18 
 
 .... 11 
 . . . . 91 
 
 .... 12 
 .... 32 
 
 . . . . 97 
 
 88 and 53 
 
 60 
 
 72 
 
 71 
 
 67 
 
 83 
 
 33-34 
 
 61 
 
 35 
 
 IX. 
 
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 https://archive.org/details/reporttomayorcitOOwill 
 
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To the Honorable, The Mayor and City Council, 
 
 Peoria, Illinois. 
 
 Gentlemen: 
 
 The valuation of the property belonging to the Peoria 
 Water Works Company and the Richwoods Water Company, 
 submitted by us under date of March 24, 1910, was intended 
 only as a basis for a new schedule of rates, which we were not 
 asked to enter into at that time. 
 
 As there stated, other elements, such as operating expenses 
 and an analytical statement of the Company’s revenue should 
 be had before taking up that subject. 
 
 Since then, Edward A. Pratt & Co. ha-ve made a thorough 
 examination and analysis of the rating cards of the Comnauy, a 
 summary of which they have submitted to vou under date of 
 July 5, 1910. 
 
 This summary and the original analysis, have been placed 
 in our hands, with the request that we pursue the subject along 
 such lines as will lead to a thorough understanding of the same, 
 and furnish the proper basis for a fair adjustment of the rate 
 schedule. 
 
 In doing this, more is needed than the technical details 
 which it may be proposed to embody in a rate ordinance. The 
 reasons for the adoption of any proposed scale of rates, the prin¬ 
 ciples which have controlled in its making, and its probable 
 effect upon the revenue of the Company should be clearly set 
 forth. 
 
 In a conference with the Mayor and committee, that pre¬ 
 ceded the preparation of this report, a number of citizens, repre¬ 
 sentative of the city’s civic life, were present. From certain 
 expressions made at that time, one might infer that they and the 
 people of Peoria questioned the basis upon which the valuation 
 of March 24th was made, being apparently apprehensive that 
 archaic conceptions of the rights and powers of public utility 
 corporations had moulded the conclusions. 
 
 In such a case as the one in hand, about which half a gen¬ 
 eration of contention has prevailed, with questions still unset¬ 
 tled, some of which are pending in the courts and in the City 
 Council, this questioning attitude is most commendable. 
 
 The realization that such contentions still exist in the com¬ 
 munity, and that a wise determination involves a full under¬ 
 standing of the legal and technical principles underlying public 
 utility values, renders it desirable and necessary that such prin¬ 
 ciples should be set forth with considerable fullness. 
 
 3 
 
These considerations will account for the space given to the 
 decisions of courts and public utility commissions, and their 
 bearing upon the questions' involved in the Peoria case. 
 
 It has also seemed desirable to give a historical outline of 
 the Peoria water plant, covering the twenty years that the city 
 operated the original plant, as well as the twenty-one years since 
 the original plant passed into the hands of the Peoria Water 
 Company, the antecedent of the present Peoria Water Works 
 Company.' 
 
 Also, in connection with the plant’s history, it is considered 
 desirable to determine the investment that has been made in the 
 plant, on entirely different lines from those followed in the re¬ 
 port of March 24th. 
 
 This history is pregnant with lessons which should have a 
 mollifying influence, and greatly accelerate a just settlement be¬ 
 tween the city and the present Company. 
 
 With a receivership only twelve years behind them, it is 
 not surprising that the officers of the Company should view with 
 apprehension the idea of so radical a change as the substitution 
 of a meter rate basis for raising revenue, for the fixture rate 
 schedule now in force. 
 
 * 
 
 It must be granted that a rapid and ill-conceived change of 
 this character would be fraught with grave danger to the Com¬ 
 pany’s solvency. For this reason considerable space has been 
 devoted to the grouping of facts that throw light on the effect 
 of the introduction of meters in other water works plants, and to 
 a consideration of a basis for fixing a meter rate schedule which 
 will reduce this danger to a minimum. 
 
 The analysis of the rating cards made by the auditor is 
 invaluable in furnishing a basis for a comparison of the possible 
 effect of different rate schedules, and minimizes the risk attend¬ 
 ing such a change as the one proposed. 
 
 The aggregate indebtedness secured by what are now first 
 mortgages of the Peoria Water Works Company, and the Rich- 
 woods Water Company, is $2,200,000. 
 
 The needed improvements, including the installations of 
 meters, call for an expenditure of approximately $570,000. 
 
 With the past history of the plant before them it is doubt¬ 
 ful whether the present Company could advance such a sum. 
 even with the aid which the revenue of the plant can give. 
 
 With the discredit which attaches to water works securities 
 generally, and particularly in the State of Illinois, it would be 
 impossible for the Company to negotiate a new loan of sufficient 
 amount to take up the old ones, and furnish the necessary addi¬ 
 tional funds to make the proposed improvements without an 
 assured income sufficient to carry it when made. 
 
 4 
 
Whether such an assurance is possible can only be deter¬ 
 mined by the City Council and their legal advisers. 
 
 But if a plan can be worked out, and put into effect, either 
 on the line of some system of profit sharing or otherwise, there 
 is probably no single thing which would advance the material 
 interests of the city to a greater extent. 
 
 For the best interest of the city and the Company, it cannot 
 be too emphatically impressed upon both, that a water service 
 permanently kept adequate to the city’s needs, cannot be had 
 without a change of attitude of one toward the other. 
 
 The holding back of information relative to the operation 
 of the plant from the officials and people of the city can but en¬ 
 gender a suspicion that things are not what they seem, and to 
 result in making things seem what they are not. 
 
 Twenty-one years ago, after twenty years of public service, 
 the water supply of Peoria was, without exaggeration, wholly 
 unfit for domestic use. The city had reached the limit of its 
 power to serve itself in any tolerable and adequate manner. It 
 never made a better bargain than when it unloaded its old plant, 
 on the terms which it did, and thereby secured a substitute, 
 which at that time was rather in advance of the city than be¬ 
 hind it. 
 
 That it has now fallen back is perhaps to be ascribed more 
 to unavoidable conditions than otherwise. 
 
 The statement, that if today the city were in the condition, 
 as to water supply, that it was twenty-one years ago, it would 
 be impossible to secure such service as it has had since that time, 
 on equally favorable terms, is no fiction. Nor is it fiction that 
 a service equal to that of the present and recent past, cannot 
 continue without a change of terms and relations between the 
 city and the Company. 
 
 Misapprehension and suspicion never devised a greater 
 offense against the best interests of the people, than to squander 
 the substance of the city and Company that serves them, in 
 fatuitous litigation, involving no inherent rights, while the 
 amount of money thus worse than wasted, is sorely needed, 
 many times over, to secure adequate service. Far better for 
 the city to use its revenue if necessary, to increase the amount 
 paid for public service, and for the Company to husband its 
 resources for improvements to the plant. 
 
 There are no avenues for financing water works today on 
 such terms as were eagerly sought after prior to 1893. 
 
 And the sooner this is accepted as a fact, and cities like 
 Peoria that aspire to good water service developing with their 
 needs, make up their minds to serve themselves intelligently, or 
 to modify the terms upon which they are being served, the 
 sooner they will realize their expectations. 
 
 5 
 
Much less is it possible for the Peoria Water Works Com¬ 
 pany to raise new capital for improvements, however, impera¬ 
 tive they may be, so long as the rate schedule of the ordinance 
 under which it works, carries a scale of rates, which if followed 
 in accordance with other perfectly proper provisions of the same 
 ordinance, would inevitably throw it into the hands of a receiver. 
 
 Respectfully submitted, 
 
 BENEZETTE WILLIAMS. 
 
 C. B. WILLIAMS. 
 
 Chicago, September 8, 1910. 
 
 6 
 
RIGHTS AND RESPONSIBILITIES OF PUBLIC SER¬ 
 VICE CORPORATIONS AND MUNICIPALITIES. 
 
 The broad questions touching the respective rights and re¬ 
 sponsibilities of public service corporations in their relation to 
 the municipalities which they serve are generally well under¬ 
 stood, though many misapprehensions still exist in the public 
 mind which are for the most part a legacy of the past, when a 
 conception of the powers of such corporations prevailed which 
 is fast becoming obsolete. 
 
 This conception was based upon the theory, which was also 
 put into practice, that a company operating a public utility under 
 a public franchise was its own master and not subject to control 
 as to rates or the kind and manner of service rendered. 
 
 About fifty years ago courts of Great Britain and a number 
 of the State Supreme Courts in this country, held substantially, 
 in the case of gas companies supplying gas under a public fran¬ 
 chise, that they could choose their customers and make varying 
 rates, as freely as a private manufacturer engaged in a competi¬ 
 tive business, and that they could accept or refuse to render 
 service at their pleasure. 
 
 The franchises under which such companies operated were 
 considered property, and if the business was profitable it was 
 valuable property. Little distinction was made between what 
 we now know as a public utility and a strictly private industry, 
 and the economic doctrine of laissezfaire was expanded to em¬ 
 brace one as well as the other. 
 
 The modern conception of a public utility corporation is 
 that its paramount function is to serve the public without dis¬ 
 crimination, and, following the tenor of the highest court de¬ 
 cisions, that it is entitled to sufficient revenue to meet interest, 
 operation, maintenance, depreciation and renewals, and to give 
 a return on the investment represented by a fair valuation of 
 the property employed that will make it an object for private 
 capital to engage in such service. Farther, that the business 
 should be a monopoly, and that a joint responsibility should 
 exist between the public and private agencies that brought it 
 into being, accompanied by governmental regulation of rates, 
 and control as to the character of service rendered. 
 
 This conception really turns a public service corporation 
 into an arm of government service, temporarily entrusted with 
 the operation of the public utility. 
 
 Besides establishing the public utility as a monopoly under 
 public control, this doctrine gives it a continuing existence as 
 
 7 
 
such, with the power of growth and adaptation to varying con¬ 
 ditions as they may arise, subject to a change of ownership from 
 private to public agencies and the reverse. 
 
 This distinction between the old and the new is not always 
 clearly drawn, though the state of New York in part, and the 
 State of Wisconsin as an entirety, have put the modern doctrine 
 into force without reservation. New Jersey has also established 
 a Public Utility Commission. 
 
 The Wisconsin public utility law gives a company operating 
 a public utility in that state, the same right to an increase in 
 rates, if those in force are inadequate, that the state or munici¬ 
 pality has for a reduction, if the existing ones are more than 
 adequate. Going with this is full protection from competition, 
 and the right of the municipality to buy at any time on the 
 valuation of the public utility commission, which is the railroad 
 commission of that state. 
 
 In states where the right exists and is exercised to regulate 
 rates of such corporations, without the protection which such a 
 law affords the investment, it is doubly difficult to determine the 
 question of reasonable rates. Limitations upon municipalities 
 as to long time contracts relative to public and private charges, 
 subjects the property of such corporations to a hazard accumu¬ 
 lating as the time for the expiration of existing franchises- ap¬ 
 proaches. 
 
 This anomalous situation, which exists in Illinois and many 
 other states, is, no doubt, due to the transition from the old 
 conception of the responsibilities of public service corporations 
 to the new. 
 
 It is fair to presume that courts in deciding that rate 
 schedules embodied in franchise grants to public service corpor¬ 
 ations have no contractural effect, intended merely to affirm the 
 power of legislative control, leaving legislatures to work out a 
 sufficient plan to protect the investment as against possible con¬ 
 tingencies on the expiration of their franchises. 
 
 But though the laws of this state seem to afford no such 
 protection, the provision in Section 18 of the Peoria Water 
 Works franchise, that, 
 
 “in the event of a failure to purchase said water works 
 as herein provided, on or before the expiration of thirty 
 years, said license and franchise shall then continue in 
 full force and effect until such time as said city may 
 purchase said works,” 
 
 etc., etc., appears to be ample for this purpose. 
 
 8 
 
THE INVESTMENT. 
 
 The foundation of all fair rate schedules is that sum which 
 should justly be credited to the public utility as representing the 
 capital upon which interest and profits should be based; that is, 
 the reasonable amount upon which a percentage should be al¬ 
 lowed as returns to the investor. 
 
 At first thought, the determination of this sum seems a 
 simple problem. It is easy to ascertain from the books the cash 
 outlay made in building the plant; or if the books are not 
 accessible, it is only somewhat more difficult to determine the 
 cost of reproducing the physical plant today. Either of these 
 sums corrected for present prices of labor and material and re¬ 
 duced by the amount of deterioration and the wear and tear 
 which the plant has sustained can be, and are often assumed to 
 give the true investment. 
 
 The facts are, however, that with public utilities generally, 
 this ‘'first thought’’ covers only one part of the question involved 
 
 On second thought, it becomes apparent that a public utility 
 that has been in operation for a term of years has acquired a 
 certain amount of revenue from private sources, as distinguished 
 from revenue for public service, but that such revenue is not 
 obtained all at once, and generally not without sacrifice and loss 
 to the owner. 
 
 Farther investigation shows that such private revenue is 
 acquired gradually by all public utilities, whether operated by 
 municipalities or service corporations, and with water works 
 plants, more gradually than with any other kind, and that it 
 requires many years to reach a level that approaches the maxi¬ 
 mum revenue which the city should furnish. 
 
 It is found that water works plants that have been built and 
 maintained of adequate size for the cities they serve, will take 
 from five to fifteen years to acquire one dollar of private revenue 
 per capita; they take from ten to twenty-five years to acquire 
 two dollars of private revenue per capita; and to reach a ready 
 remunerative stage in revenue, generally requires from twenty 
 to thirty years. 
 
 The value of the service which such a plant can render that 
 has been in operation long enough to acquire any considerable 
 private business, cannot be measured by its ability to pump atid 
 distribute water only. Its revenue producing power is a most 
 valuable asset, an asset acquired not only because of the exist¬ 
 ence of the physical plant, in a populated city, but because, as 
 stated, it has usually been operated for years without profit, and 
 generally at a loss. 
 
 9 
 
To say that the investment in such a plant shall have suf¬ 
 fered diminution because of physical deterioration, and receive 
 no increase for the business which it has created, is inadmissible. 
 
 It is erroneous to say that the creation of this business is 
 because of the existence and growth of the city alone, and that 
 the city should derive all the benefit therefrom. 
 
 If the course of events had been such that the city had 
 grown to its present size without water works, a new plant just 
 starting therein would not have the business in question, but 
 would have to acquire it through years of work and at a heavy 
 outlay, just as revenue has been acquired by such plants at all 
 times. 
 
 Building up of the business is as necessary a part of creating 
 a utility as the building of the physical structure. The two 
 really constitute the utility as a whole, and each forms an essen¬ 
 tial element of the value. 
 
 It follows from this that when a municipality finds a private 
 agency willing and able to become the pioneer in carrying a pub¬ 
 lic utility, and particularly a water works plant, from the time of 
 no private revenue to the time when the acquired revenue brings 
 remuneration, it has secured a service, the value of which is 
 seldom appreciated. 
 
 METHOD OF FINDING THE INVESTMENT. 
 
 The foregoing considerations suggest two possible methods 
 of determining that sum which at any stage of the development 
 of a public utility may reasonably be taken as the proper invest¬ 
 ment. 
 
 1. To ascertain the fair cash value of the property, based 
 on the cost of reproducing the physical property as of the time 
 of valuation, and as enhanced by the fact of its acquired earnings. 
 That is, to find its value as a going concern and as of the time of 
 valuation on the hypothesis of reproduction. 
 
 2. To ascertain the actual outlay in the plant and its 
 business, made up of the original cost of the physical plant aug¬ 
 mented by the unremunerated expense incurred in producing or 
 building up its business. 
 
 The first method is the one laid down by the courts for 
 fixing the fair price to be paid for a public utility in case of sale 
 and for determining the investment to be used in fixing rates. 
 
 CONTROLLING PRINCIPLES OF PUBLIC UTILITY 
 
 VALUES. 
 
 It may be said that the controlling principles of public 
 utility value as defined by the higher courts, recognize the fact 
 that cost and value are not synonymous terms; that cost is not 
 
 10 
 
 i 
 
a measure of value, although the structural value of a plant is 
 primarily founded on cost or price, as of some specific time: 
 that finding cost is only a step in finding value, and that the 
 plant must be scrutinized as to its condition and adaptability to 
 the function it is to perform in the future, and proper deductions 
 made for any deficiencies in order to obtain value. 
 
 Also, that all value that attaches to a public utility grows 
 out of the physical plant and its earnings, and since earnings, or 
 the rendering of service, is the primary object of the existence 
 of any utility, it is plain that there can be no structural value 
 without earnings or service rendered. 
 
 Physical existence alone does not, and can not, bring value. 
 Value emerges only when earnings or services, are rendered by 
 the operating plant. Hence, the value of any plant is necessarily 
 made up of two fundamental and inseparable elements; the 
 value of the physical plant, or “structural value,” and the value 
 of its business, the “going value.” 
 
 The latter element goes with the structural element, and 
 augments the total plant value, just as surely as the cost of 
 constructing or supplying the necessary mechanical parts. 
 
 The proposition that a plant without service to perform, and 
 without earnings, present or prospective, would be devoid of 
 value, except to be dismantled and sold as real estate, second¬ 
 hand machinery and junk, is no more apparent than that its 
 value is due to service to be performed and earnings to be made 
 in the future, and not to wiiat has been done in the past. 
 
 It is equally clear that the structural value of an operating- 
 plant must be ascertained by comparing it with a similar new or 
 substitute plant, produced as of today, but operating tomorrow, 
 under the limitation of future requirements, and that it is the 
 revenue which the plant in operation can produce in the future, 
 that could not be obtained or produced by such a substitute 
 plant, that constitutes “going- value,” and measures its magni¬ 
 tude. 
 
 It follows from the foregoing propositions, that there is no 
 vital distinction between the controlling principles applicable to 
 determining structural value and going value. In each case a 
 substitute plant is hypothecated, which is a substantial duplicate 
 of the operating plant in function and mechanical detail. The 
 hypothecation is carried to the extent of building it, mentally, 
 not only at the prices of today, but of doing the work under the 
 conditions and environments of today. If pavements cover the 
 street pipes, the expense of taking up and relaying them form a 
 part of the cost of the hypothetical distribution system, even 
 though they were not in existence when the pipes were orig¬ 
 inally laid. 
 
 11 
 
After the structural cost of this hypothetical plant has been 
 thus determined, the structural value of the operating plant is 
 obtained by comparison. The probable future usefulness of the 
 operating plant, and its several parts, are determined upon, and 
 the value fixed by reducing the estimated cost of the hypothetical 
 plant or parts thereof, in proportion to the relation between the 
 service rendered by the operating plant, in the past, and the 
 probable service to be rendered in the future. 
 
 In like manner, having the past earnings and cost of oper¬ 
 ating the present plant, and its probable future net earnings fixed 
 upon, its going value is obtained by a comparison with the 
 probable operating results which the substitute plant could give, 
 if it were to be built today according to the hypothesis. 
 
 It is obvious that if the operating plant had not been built 
 before the time of valuation, and had not obtained a business 
 that gives it value, the actual construction of the hypothetical 
 plant of like capacity, and its operation in the same, though a 
 formerly unoccupied field, would furnish the next best alterna¬ 
 tive for obtaining revenue and rendering service. 
 
 It is equally obvious that the limit of the going value ele¬ 
 ment is the difference in the net revenue of these two plants, 
 beginning with the time of valuation and continuing to that 
 time in the future when they shall have acquired equal revenue. 
 
 In computing going value as in determining structural value, 
 it is necessary to distinguish between cost and value. 
 
 Generally for many years of a plant’s operation deficits aie 
 sustained, and if the plant occupies a poor field, or is serving a 
 decaying community, the deficits continue, until they amount to 
 sums greatly in excess of the value of the business which has 
 been acquired. 
 
 These deficits, in a sense, represent the cost of acquiring the 
 accrued business of the plant, but as they were incurred in past 
 operations, and going value can only be realized in future oper¬ 
 ations, it is plain that there is no necessary relation between 
 them. Hence as in the case of the physical plant, cost is not 
 value, and it is necessary to distinguish between them in an 
 appraisement. 
 
 One purpose of the foregoing discussion is to make it clear 
 that in appraising a public utility, in accordance with the first 
 method given, it is necessary to distinguish between cost and 
 value, that though under certain conditions cost may be a true 
 measure of value, it is not necessarily so; though as relates to 
 the physical elements of a plant it is an essential first step in 
 obtaining value. 
 
 That considering a public utility in its entirety, its value not 
 only depends upon its physical structure, but on the service it 
 performs, the business it has acquired, and which it can carry 
 
 12 
 
with it. The physical plant and its business cannot be separ¬ 
 ated. Though no service can be rendered without the physical 
 structure, the physical structure without the power and oppor¬ 
 tunity to render service would be valueless. 
 
 Another purpose is to establish the proposition that it is the 
 service which the physical structure will perform in the future, 
 not the work it has done in the past, that determines its value as 
 an operating mechanism; and that it is the net earnings which 
 it will produce in the future, not what it has produced in the 
 past which determines its value as a revenue producing agency, 
 in other words, tnat the value of a public utility is based wholly 
 upon its future power of service, the past and present cost of 
 construction and operating being used only as an aid to forecast 
 the future. 
 
 From the foregoing underlying principles of valuation it 
 will be seen that any adequate public utility plant, operating in 
 a growing city, that has been built and developed along lines of 
 adaptability and permanency, and that it kept in effective work¬ 
 ing condition, does not depreciate in value. All the mechanical 
 parts of such a plant ultimately perish by decay, w r ear, on abso- 
 lescence, and must be restored. But being the only existing 
 agency by which the city, or the people of the city can secure 
 its peculiar kind of service, such changes, occurring with a grow¬ 
 ing business, must, on the whole, work toward appreciation 
 rather than depreciation. 
 
 COURT DECISIONS AND PUBLIC UTILITY VALUES. 
 
 Though no court, so far as known, has epitomized the prin¬ 
 ciples of valuation in the exact form given, it is believed that the 
 foregoing statement correctly represents the conceptions that 
 the courts had in mind, and which they have in substance ex¬ 
 pressed, in the decisions which have become the basis for the 
 valuation of public utilities. 
 
 The leading opinion that may be said to have laid the found¬ 
 ation for rational methods of valuing public utilities, and that 
 was the first to establish the equity of the going value element 
 where there is no franchise, was the decision rendered by Judge 
 Brewer of the United States Circuit Court of Appeals, in the 
 Kansas City Water Works case, legally known as the National 
 Water Works Co. of New York vs. Kansas City (U. S. Fed. 
 Reporter, 62, 853.) 
 
 In his brief on appeal, C. L. Krauthoff, one of the attorneys 
 for the Water Works Company, contended that, 
 
 “the original legislative act and contract clearly provide 
 
 for a valuation based upon the works in operation, and 
 
 that they were to be mortgaged upon the basis of a 
 
 33 
 
going concern. That the contract cannot be construed 
 to have contemplated that the works should be mort¬ 
 gaged on one basis and paid for upon another. The 
 works were to be mortgaged without reference to a lim¬ 
 ited franchise, and their value thus fixed was to be 
 stationery. The city can get the works for no smaller 
 amount by reason of the absence of the franchise, and 
 the company cannot obtain an additional allowance as 
 for the franchise. The question is: What are the 
 works, completed and in operation, worth? * * * * 
 
 Whenever the purchase was made, the works were to 
 be valued as a going concern. They were to be in oper¬ 
 ation. They were to be completed, and the operation 
 thereof was to be contingent.” 
 
 In his brief for the Company Gardiner Lathrop contended 
 that the controlling idea of the contract relative to purchase is 
 not the cost of the plant as completed; it is not the cost of the 
 theoretical reproduction, but that 
 
 “on the contrary, the provision is that the city must pay • 
 the fair and equitable value of the company’s works, > 
 completed and in operation. It must pay upon the basis 
 of a going concern, the net income of the plant .being 
 the controlling element upon which the value is to be 
 estimated.” 
 
 In the course of the opinion the court says: 
 
 “The company insists that the test is to take the 
 income or earnings, and capitalize them. The earnings 
 pay 6 per cent on four millions and a half. In other 
 words, the company had produced a property which 
 earns 6 per cent on four millions and a half; and that, 
 it is claimed, is the fair valuation of the property, 6 per 
 cent being ordinary interest. On the other hand, the 
 city insists that the franchise has ceased, and that 
 basing a value upon earnings is in effect valuing a fran¬ 
 chise which no longer exists, and which the city is not 
 to pay for; that the true way is to take the value of the 
 pipe, the machinery and real estate, put together in a 
 waterworks system, as a complete structure, irrespective 
 of any franchise—irrespective of anything which the 
 property earns, or may earn in the future. We are not 
 satisfied that either method, by itself, will show that 
 which, under all the circumstances, can be adjudged 
 ‘the fair and equitable value.’ Capitalization of the 
 earnings will not, because that implies a continuance 
 
 14 
 
of earnings, and a continuance of earnings rests upon a 
 franchise to operate the water works. The original 
 cost of the construction cannot control, for ‘original 
 cost’ and ‘present value’ are not equivalent terms. Nor 
 would the mere cost of reproducing the water works 
 plant be a fair test, because that does not take into ac¬ 
 count the value which flows from the established con¬ 
 nections between the pipes and the buildings of the city. 
 
 It is obvious that the mere cost of purchasing the land, 
 constructing the buildings, putting in the machinery and 
 laying the pipes in the streets—in other words, the cost 
 of reproduction—does not give the value of the property 
 as it is today. A completed system of water works, such 
 as the company has, without a single connection be¬ 
 tween the pipes in the streets and the buildings of the 
 city, would be a property of much less value than that 
 system, connected, as it is, with so many buildings, and 
 earning, in consequence thereof, the money which it 
 does earn. The fact that it is a system in operation, 
 not only with a capacity to supply the city, but actually 
 supplying many buildings in the city—not only with a 
 capacity to earn, but actually earning—makes it true 
 that ‘the fair and equitable value’ is something in ex¬ 
 cess of the cost of reproduction.” 
 
 Judge Brewer’s opinion in this case was so obviously just, 
 and the doctrine laid down so unmistakably true, that so far as 
 known, none of the courts of last resort has since rendered an 
 adverse decision on a similar presentation of facts, though a 
 number of them have confirmed and elaborated the doctrines and 
 principles promulgated by Judge Brewer. 
 
 The most notable of such cases being known as the two 
 Maine, water works condemnation cases, before the Supreme 
 Court of that state. 
 
 In the Kennebec Water District vs. the City of Waterville 
 case, 97 Maine, 185, Judge Savage instructed the appraisers as 
 follows: 
 
 “The property to be taken, both plant and fran¬ 
 chises, are to be appraised, having in view their value as 
 property in itself, and their value as a source of income. 
 There are these elements of value, but only one value 
 of one entire property is to be appraised in the end. 
 These elements necessarily shade into each other.” * *. 
 
 “In estimating even the structural value of the 
 plant, allowance should be made for the fact, if proved, 
 that the Company’s water system is a going concern, 
 with a profitable business established, and with a pres¬ 
 ent income assured and now being earned.” 
 
 15 
 
Also, 
 
 “In fixing structural value, including the element ol 
 going concern, consider also the present efficiency of the 
 system. * * * * Necessary time to construct de 
 
 novo, and the time and cost needed after construction 
 to develop such new system to the level of the present 
 one, in respect to business and income, and the added 
 net income and profits which would accrue during this 
 period of construction and development.” 
 
 In Brunswick and Topsham Water District vs. Maine 
 Water Company, 99 Maine, 371, Judge Savage says: 
 
 “Structural value must include consideration of the 
 facts that the structure is in use, is a going concern.” 
 Further: 
 
 “We speak sometimes of a going concern value as 
 if it is, or could be separate and distinct from structural 
 value; so much for structure and so much for going con¬ 
 cern. But tnis is not an accurate statement. The go¬ 
 ing concern part has no existence except as a character¬ 
 istic of the structures. If no structure, no going con- ' 
 cern. If a structure is in use, its value is effected by the 
 fact that it is in use. There is only one value. It is the 
 value of the structure being used, that is all there is 
 to it.” 
 
 “The property taken is a single tning, to which be¬ 
 longs certain characteristics which effect value. The 
 thing cannot be taken without these characteristics. If 
 it is attempted to value the thing, separate from its in¬ 
 herent characteristics, elements which add value to the 
 thing are omitted. If these elements are omitted, the 
 owner fails to receive the full and fair value of the 
 thing, and thereby is denied just compensation.” 
 
 Aside from the cases cited, courts of last resort have sus¬ 
 tained the principle of going concern value in a number of 
 specific instances. 
 
 The City of Galena, Kansas, vs. the Galena Water Works, 
 is one. 
 
 In fixing the value of the plant the referee allowed an in¬ 
 crease in value on account of this element, which the lower 
 court refused to confirm. On appeal, the Supreme Court re¬ 
 versed the lower court and sustained the referee. 
 
 Other cases are Gloucester Water Supply Co. vs. Glouces¬ 
 ter, 179 Mass. 365, and Norwich Gas & Electric Co. vs. Norwich, 
 76 Conn. 565. 
 
 16 
 
The City of Omaha, Petitioner, vs. Omaha Water Co., lately 
 decided by the Supreme Court of the United States, sustains an 
 increase of $562,712.45 in the value of the property of the com¬ 
 pany on account of the going concern element in a total ap¬ 
 praised value of $6,263,295.49. 
 
 VALUATIONS FOR SALE AND FOR RATE MAKING. 
 
 From the foregoing statements and citations there seems 
 to be no doubt about the doctrine that should apply in the valua¬ 
 tion of public utilities for the purposes of sale. 
 
 Some courts have, in a measure, distinguished between a 
 valuation for sale and a valuation for fixing the investment in 
 rate cases. 
 
 The Supreme Court of Iowa, in the case of Cedar Rapids 
 Gas Light Company vs. City of Cedar Rapids, Northwest Re¬ 
 porter, 120-966, in opinion made May 4, 1909, says: 
 
 “ Where a gas company supplying gas to the inhab¬ 
 itants of a city, laid its mains in unpaved streets, the 
 value of the mains and pipes, in estimating the value of 
 the property in fixing rates, should not be estimated on 
 the basis that it would cost more to place the pipes be¬ 
 cause the streets have been paved.” 
 
 In the Consolidated Gas Company case, 212 U. S. Reporter, 
 19, the Supreme Court of the United States says: 
 
 “And we concur with the court below in holding 
 that the value of the property is to be determined as of 
 the time when the inquiries were made regarding rates. 
 
 If the property which legally enters into the considera¬ 
 tion of rates has increased in value since it was ac¬ 
 quired, the company is entitled to the benefit of such in¬ 
 crease.” 
 
 Farther, 
 
 “The rate proposed must be with reference to the 
 value of the property at the time when the rate takes 
 effect. The company is entitled to the benefit of any 
 increase in value at that time.” 
 
 Also, 
 
 “Rates when fixed by legislative authority for pub¬ 
 lic service corporations, should allow a fair return upon 
 a reasonable value of the property at the time it is being 
 fixed.” 
 
 The Supreme Court of Maine, in the Brunswick & Topsham 
 Water District vs. Maine Water Company, 99 Maine, 371, says: 
 
 17 
 
“Reasonableness of the rates must be based upon 
 the fair value of the property used by the company for 
 service of the public.” 
 
 In San Diego Land Company vs. National City, 174 U. S. 
 739, 757, Justice Harlan held: 
 
 “What the company is entitled to demand, in order 
 that it may have just compensation, is a fair return 
 upon the reasonable value of the property at the time 
 it is being used for the public. The property may have 
 cost more than it ought to have cost, and the outstand¬ 
 ing bonds for money borrowed and which went into the 
 plant may be in excess of the real value of the property 
 So that it cannot be said that the amount of such bonds 
 should in every case control the question of rates, al¬ 
 though it may be an element in the inquiry as to what 
 is, all the circumstances considered, just both to the 
 company and to the public.” 
 
 In Stanislaus County vs. San Joaquin C. & I. Co., 192 U. S. 
 201, 214-216, it is stated: 
 
 » 
 
 “The original cost may have been too great; mis¬ 
 takes of construction, even though honest, may have - 
 been made, which necessarily enhanced the cost; more 
 property may have been acquired than necessary or 
 needful for the purpose intended. * * * * j n this 
 
 case much of the total amount expended in the course 
 of construction of the works was not proved by those 
 who made such expenditures, and the items and total 
 amount of the cost of construction were only proved by 
 the books. What such books did not prove was the 
 reasonableness of that cost, its propriety or necessity. 
 
 * * * * To take the amount actually invested into 
 
 ‘estimation’ does not mean necessarily that such amount 
 is to control the decision of the question of rates.” 
 
 The Iowa court in the Cedar Rapids case, appears to have 
 furnished the only dissenting opinion of a high court as to the 
 conclusion that the valuation for fixing rates should be the same 
 as the valuation for sale. 
 
 That there is no real distinction becomes apparent if we 
 consider that no public utility can have two values at a given 
 time, and that its fair value at the time of fixing rates, must be 
 its fair value at the same time for any purpose. If its fair value 
 for sale, differed from its fair value for fixing rates, at a given 
 time, then rates should change, merely because of a change of 
 ownership. 
 
 18 
 
To put it another way. If a given sum represents the in¬ 
 vestment which the owner of a public utility is entitled to have 
 paid over to him in case of a forced sale under the franchise, 
 or law, then he is entitled to a fair income on the same invest¬ 
 ment in case he is forced to retain it. 
 
 It would appear, therefore, that if the first method of de¬ 
 termining the investment is to be followed, that there is no 
 reason for considering the value of the property as different, 
 for rate purposes, from its value for sale or condemnation pur¬ 
 poses. 
 
 The Iowa case seems to be the result of an effort to com¬ 
 bine two methods of determining the investment for a given 
 property. Either the reproduction method should be logically 
 followed and the investment based upon the value as of the 
 time of fixing rates, or the second method of determining the 
 investment, the “Original Cost and Deficit’' method, should be 
 adopted. 
 
 THIS SECOND METHOD of determining the investment 
 by original costs and deficits, divorced entirely from present 
 value, has seldom, if ever, been recognized as sound, so far as 
 known, by courts of highest resort. Though the Wisconsin 
 Railroad Commission at one time seemed to have adopted it as 
 the proper one for valuing the public utilities of that state. 
 Later they encountered such difficulties in its use, that it has 
 been practically abandoned, or, at most, they now advocate 
 only a halting and partial use of the same. 
 
 The Wisconsin law provides, that, 
 
 “The Commission shall value all the property of 
 every public utility actually used and useful for the 
 convenience of the public.” 
 
 Acting under this law, the Commission has made a number 
 of decisions that seek to establish certain rules and doctrines 
 affecting the question of public utility values which may be 
 briefly stated as follows: 
 
 In the Cashton Light & Power Co. case, decided in Novem¬ 
 ber, 1908, the Commission substantially enunciated the same 
 doctrine found in the foregoing citations, as witness the follow¬ 
 ing statements: 
 
 “There is, however, an element of value that must 
 be taken into consideration, and which is sometimes 
 spoken of as a kin to good will, namely the “Going 
 Value,” and although the franchise of the public utility 
 has expired, its plant is to be taken over by the village 
 as a going concern, and just compensation must be 
 awarded for the property taken as such; that is, as a 
 
 19 
 
living and operating entity, engaged in serving the pub¬ 
 lic and not a mere plant without patrons.” 
 
 Also, 
 
 “In placing a value on the physical property of a 
 plant, the units of a plant should not be valued as inde¬ 
 pendent entities, but as units of a going concern per¬ 
 forming utility service.” 
 
 And, 
 
 “The element of going value created by the invest¬ 
 ment made in developing the business, and in addition 
 to the cost of the physical structure, must be taken 
 into consideration in fixing value.” 
 
 In the Antigo Water Co. case, decided August 3, 1909, and 
 also in the Menominee and Marinette Light & Traction Co. case, 
 decided the same date, the “Original Cost and Deficit” method 
 of valuation is advanced. 
 
 It is held as to the physical plant alone, that the original 
 cost, and the cost of reproduction, appear to be the most equit¬ 
 able as a basis for rate making, but that as to the business valu¬ 
 ation alone, the most equitable would appear to be represented 
 by losses during the earlier years, or by deficits from operation 
 during the development period. That as these losses, or deficits, 
 had to be met by the owners, they may be said to constitute 
 the additional investment necessary to build up the business, 
 and are as legitimate and necessary a part of the cost of the 
 enterprise as a whole, as is the cost of the physical plant, and 
 are hence a part of that cost upon which a reasonable amount of 
 interest and profit should be earned. 
 
 In the case of E. E. Payne, et ah, vs. Wisconsin Telephone 
 Co., also decided August 3, 1909, the same doctrine appears in 
 the following statement: 
 
 “Going value is distinguished from going concern 
 value. The uncompensated cost incurred in building 
 up the business must be considered in rate making. 
 
 The seller of a plant, which is a going concern, may be 
 able to get more, and the purchaser be willing to pay 
 more than for a plant which has no established busi- 
 , ness. Similarly in expropriation proceedings going 
 concern value may increase the amount of indemnity 
 to be paid, but this ‘more’ is not property which is used 
 and useful for the convenience of the public. Every 
 effort honestly put forth, every dollar properly ex¬ 
 pended, and every obligation legitimately incurred in 
 the establishment of an efficient public utility business, 
 must be taken into consideration in the making of 
 
 20 
 
rates. Collectively, these elements must be character¬ 
 ized by the term ‘going value.’ ” 
 
 It is thus seen that in the three cases last cited, decided by 
 the Wisconsin Railroad Commission August 3, 1909, the doc¬ 
 trine that the investment for rate making purposes, should be 
 based upon the original cost of construction and the deficits 
 incurred in operation, as opposed to the doctrine of present 
 value laid down by the courts, and as enunciated by the com¬ 
 mission in the Cashton case, is strongly presented. In the text 
 of the decisions, extended arguments are especially directed to 
 showing the fallacy of the “present value” method for rate 
 making purposes. 
 
 In the Antigo Water case particularly, nearly twenty pages 
 of the decision are devoted to this end, and to establishing the 
 “original cost and deficit” doctrine. 
 
 In these arguments, however, many of the underlying prin¬ 
 ciples and facts that are the support of the present value method 
 of appraisement are clearly recognized, as is shown by the fol¬ 
 lowing extracts: 
 
 Antigo Water case, page 84: 
 
 “A mere physical plant, no matter how perfect or 
 how well it is adapted to the purpose for which it is in¬ 
 tended, amounts to but little unless it has or can obtain 
 a paying business. Without business it is a dead mass 
 instead of a living concern earning profits. To have 
 profits it must have business or customers who avail 
 themselves of the services it renders at rates that yield 
 an adequate income.” 
 
 “But new plants are seldom paying at the start. 
 Several years are usually required before they obtain a 
 sufficient amount of business or earnings to cover oper¬ 
 ating expenses, including depreciation and a reasonable 
 rate of interest upon the investment. The amount by 
 which the earnings fails to meets these requirements 
 may thus be regarded as deficits from the operation. 
 These deficits constitute the cost of building up the 
 business of the plant. They are as much a part of the 
 cost of building up the business as loss of interest 
 during the construction of the plant is a part of the cost 
 of its construction.” 
 
 Here there is a clear recognition of the principle that plant 
 value is as surely dependent upon earnings, or business, as upon 
 the physical structure, and of the fact that public utilities gen¬ 
 erally reach a paying basis only after years of operation at a 
 loss. 
 
 21 
 
EFFECT OF THE APPLETON CASE. 
 
 Notwithstanding these decisions of August 3, 1909, so 
 strongly supporting the “Original Cost and Deficit” method of 
 determining the investment for a public utility, as against the 
 “Present Value” method, in the case of the “City of Appleton 
 vs. Appleton Water Works Co.,” decided May 14, 1910, the Com¬ 
 mission take quite a different position. 
 
 They quote with disapproval page 221, two Pennsylvania 
 cases, apparently the only two extant that seem to support the 
 doctrine laid down in the three cases referred to, because, as 
 they contend, the rule adopted by the Pennsylvania courts is 
 subject to serious objections. To quote: 
 
 “It would impose upon the public, in some cases, 
 the obligation of paying returns upon extravagant and 
 unwise investments. It can only be accepted as sound 
 when the money sunk in the investment has been pru¬ 
 dently expended and is clearly not so excessive in 
 amount, in comparison with the actual present value 
 of the investment, that to pay a return upon it would . 
 require the exaction of rates that are unusual, or higher , 
 than the value of the service to the customer.” 
 
 It is to be observed that in this statement the Commission 
 appeals to the “Present Value” to test the correctness of the 
 “Original Cost,” which is the same as saying if the “Originall 
 “Cost” method brings the “Actual Present Value of the Invest¬ 
 ment”,* it may be followed, otherwise not. 
 
 The following, p. 276 and 277, Appleton case, is a still fur¬ 
 ther repudiation of the “Original Cost and Deficit” doctrine: 
 
 “The entire excess of cost over operating revenues 
 incurred in developing the business and establishing 
 the same upon a self-sustaining basis is not in every 
 instance an inflexible criterion by which the element 
 of going value is measured, for if it were so considered 
 its application would often lead to a reductio ad ab- 
 surdum. Thus, the longer the period of development 
 necessary to attain the point where the debits and cred¬ 
 its balance, the greater might be the going value, and if 
 such period were abnormally or unusually long, it 
 would often result in an unreasonable excessive going 
 value, depending upon the time the appraisement was 
 made and other circumstances of the particular case 
 considered.” 
 
 *Black not in the original. 
 
 22 
 
The final outcome in the Appleton case is a full justification 
 of the position taken by the courts, and practically leaves the 
 present value method in undisputed control of questions relative 
 to the investment in public utilities for either rate making or for 
 sale purposes. 
 
 Even such statements as the following from the Brunswick 
 case, that 
 
 “In determining what would be a fair return, un¬ 
 doubtedly the amount of money actually and wisely 
 expended is a primary consideration. Actual cost bears 
 upon reasonableness of rates as well as upon present 
 value of the structure as such. It thus bears upon what 
 is a fair return upon the investment and so upon 
 the value of the property. In estimating structural 
 value, prior cost is not the only criterion of present 
 value and present value is what is to be ascertained. 
 
 The present value may be affected by the rise or fall of 
 prices of materials. If in such a way the present value 
 of the structure is greater than the cost, the Company 
 is entitled to the benefit of it. If less than the cost the 
 Company must lose it. And the same factors should 
 be considered in estimating the reasonableness of re¬ 
 turns,” 
 
 do not invalidate the last conclusion, for Judge Savage dis¬ 
 tinctly says if the present value of the structure is greater than 
 the cost, the Company is entitled to the benefit of it, and if less 
 the Company must lose it. 
 
 “And the same factors should be considered in es¬ 
 timating the reasonableness of returns.” 
 
 The doctrine contained in this case clearly is that prior 
 costs may be evidence to show present value, but the present 
 value is the only ultimate criterion for determining the invest¬ 
 ment, whether for sale, or for determining the reasonableness 
 of returns. 
 
 The Wisconsin Commission occupies a conspicuous posi¬ 
 tion, being invested with great powers as affecting public util¬ 
 ity values in that state. And because of the recognized ability 
 and fairness of the Commissioners, and because their findings 
 are semi-judicial in nature, they will necessarily be quoted, and 
 in a measure relied upon, the country over. 
 
 For these reasons and because their early decisions run 
 counter to the consensus of the opinions of practically all of 
 the higher courts in the land, we are justified in examining 
 them critically and in testing their soundness in every available 
 
 23 
 
manner, so that if the facts assumed by the Commisison and the 
 reasoning therefrom are faulty, it may be discovered. 
 
 The following quotation from the Antigo Water case, pp. 
 94 and 95, contains a substantial epitome of their argument 
 against the “Present Value” method of obtaining the invest¬ 
 ment: 
 
 “As already intimated, engineers and other ap¬ 
 praisers, in valuing public utilities, have gone beyond 
 mere costs in endeavoring to arrive at the value of the 
 business of a going concern, and have also taken the 
 earnings of such plants into consideration. They have 
 held, in substance, that such plants are worth more 
 with, than without an established business, and that the 
 difference in the value in the two cases is closely de¬ 
 pendent upon the cost of establishing the business, as 
 well as upon the earning power of the business so estab¬ 
 lished. In other words, they look upon both the cost 
 and the earnings of a business as proper elements of 
 consideration in determining its value. Many among 
 them, in their appraisals, appear to have attached great- • 
 er importance to the earnings of the business than to- 
 the cost. It is stated above that the net cost of build¬ 
 ing up the business would seem to be a legitimate item 
 for the capital account or of that value of a plant upon 
 which its rates are based. Whether this can also be 
 said of the earning value, appears to us extremely 
 doubtful. Earning values are usually determined by 
 capitalizing net earnings, or by comparisons, which 
 amount to about the same thing, and such values can 
 hardly be equitable for rate-making purposes. 
 
 “There are many reasons why the earning capacity 
 or earning value of the business cannot be a just basis 
 for rates. Other things being equal, the earnings of a 
 plant depend upon its rates. Under such conditions 
 raises in rates will increase the earnings. The earnings 
 at the time of the appraisal may also be derived from 
 rates that are unreasonably high.” 
 
 In this the Commission confuses methods, and arguments 
 sometimes used and advanced by individuals who may at times 
 be called upon to aid in the appraisement of public utilities, 
 with the settled consistent doctrine expounded by the clearest 
 thinkers that have occupied, or still occupy benches in the high¬ 
 est courts. 
 
 As far as appears no appraiser has ever held that the ele¬ 
 ment of going concern value is dependent upon the cost of 
 establishing the business, while at the same time contending 
 
 24 
 
that it is dependent upon the earning power of the business so 
 established. 
 
 But if such should be the case, it does not discredit the 
 soundness of the contrary view that cost is never as such, a 
 measure of value, and if cost and value correspond, it is more 
 of a coincident, or accident, than otherwise. 
 
 It is erroneous to assume, as the Commission does, with 
 reference to appraisements, made by engineers and others, that, 
 
 “Earning Values are usually determined by capital¬ 
 izing net earnings, or by comparisons, which amount to 
 about the same thing.” 
 
 If some appraisers inclined to the capitalizing of net earn¬ 
 ing before the Brewer decision in the Kansas City case, it was 
 to determine the whole value of the plant, and not merely the 
 element of going value. 
 
 This method, however, was removed from controversy by 
 Judge Brewer in holding it inadmissible. With just as such 
 emphasis, however, he held that, 
 
 “The original cost of the construction cannot con¬ 
 trol, for ‘original cost’ and ‘present value’ are not equiv¬ 
 alent terms. Nor would the mere cost of reproducing 
 the water works plant be a fair test, because that does 
 not take into account the value which flows from the 
 established connections between the pipes and the 
 buildings of the city.” 
 
 The principles established by Judge Brewer’s opinion as 
 sound in doctrine as well as in law, are that capitalizing net 
 earnings is inadmissible. 
 
 Original cost is eliminated, because “original cost and pres¬ 
 ent value are not equivalent terms.” 
 
 The mere cost of reproduction is not sufficient, “because 
 that does not take into account the value which flows from es¬ 
 tablished connections between the pipes and the buildings.” 
 
 Now, what is this value which flows from the established 
 connections? In what does it consist? Whence does it come? 
 Judge Brewer did not give it a name, nor did any one in Kan¬ 
 sas City case, though some of the attorneys contended that the 
 business, and the plant as a whole must be taken upon the basis 
 of a “going concern.” 
 
 Obviously it has to do with something that has economic 
 value, that is the object of human desire, that is sought after. 
 Something for which people will make sacrifice. No one will 
 do this for “Deficits and Losses.” One may incur “Deficits and 
 Losses” to attain the sought for object, but they are not the! 
 object. 
 
 25 
 
The object desired and sought in the case of public utilities 
 is beyond dispute, service. A service whose value is repre¬ 
 sented, and measured by certain portion of the probable future 
 earnings of the plant. 
 
 This certain portion of the probable future earnings is evi¬ 
 dently the thing which enhances plant value, and is the thing 
 to be determined. It has been christened “Going Concern 
 Value,” and for short, “Going Value.” What is the proper con¬ 
 ception of this value? Is it properly characterized by the Wis¬ 
 consin Commission, in the language of the Wisconsin Telephone 
 case? That, 
 
 “Every effort honestly put forth, every dollar prop¬ 
 erly expended, and every obligation legitimately in¬ 
 curred in the establishment of an efficient public utility 
 business, must be taken into consideration in the 
 making of rates. Collectively, these elements must be 
 characterized by the term ‘going value.’ ” 
 
 Surely this was not the conception of Judge Brewer, for 
 the uncompensated cost of building up the business of which 
 the commission speaks, the expenses and obligations, are but 
 “original costs,” which Judge Brewer held were not the equiva¬ 
 lent of present value. 
 
 What is it then but the earnings which the operating plant 
 can and will produce in the future, which could not be obtained 
 if such plant had had no existence? that is the difference in the 
 net earnings of the operating plant, and the possible net earn¬ 
 ings of a hypothetical plant if it were started today in the same 
 though a new and unoccupied field? 
 
 That the Wisconsin Commission are not fully satisfied with 
 their characterization of “going value” has been shown by the 
 fact that while in the three cases decided August 3, 1909, it is 
 conceived of as dependent upon the cost of building up the bus¬ 
 iness; that is, upon the deficits of operation; in the Appleton case 
 this was held not to be an inflexible criterion, because, according 
 to the commission, if the deficits are too large and continue over 
 too long a time, the “going value” becomes too great. 
 
 It is pertinent to inquire, how is one to know that it becomes 
 too great? What is the standard of magnitude? If the costs 
 and deficits have been necessary in the conduct of the business, 
 if they could not be avoided, and they are to be the measure of 
 value, why should they be excluded if the theory is sound? If 
 they are legitimately a part of the investment and were properly 
 incurred, their magnitude is of only secondary consequence. 
 
 The courts foresaw all of these difficulties and kept clear of 
 them by repudiating the theory that deficits or costs represent 
 value. 
 
 26 
 
To state the proposition that the greater the deficit the 
 greater the value; that is, the greater the loss, or the less busi¬ 
 ness the plant has the more it is worth, is to reduce the “original 
 cost and deficit” theory to a reductio ad absurdum. 
 
 The difficulties which the commission encountered, and 
 which some other minds encounter, is basing “going values” 
 upon revenue which may be too high, are only imaginary. The 
 discriminating appraiser can determine from the revenue, within 
 small limits, whether the rates are too high as a whole, to give a 
 proper basis for computing going value, and he can always cor¬ 
 rect the going value to conform to the proper revenue after it 
 has been determined. 
 
 LIMITATION OF THE INVESTMENT. 
 
 The principle that the investment sum must not exceed the 
 fair present value of the property is a fundamental deduction 
 from the foregoing discussion. Also that the value found must 
 primarily be fair to the municipality. By this it is meant that 
 under no condition is the municipality to be called upon to pay 
 more than the present value of a public utility as a going concern. 
 
 Hence the importance of finding this limit, and hence the 
 fallacy of the “original cost and deficit” theory of valuation. 
 
 Any method if consistently applied, that gives more than 
 the actual present value of the property, is liable to be unfair to 
 the municipality. And if, as in the Appleton case, the result must 
 be compared with the value ascertained in another way, tnen the 
 method fails as a complete instrument of valuation. 
 
 It is the insistency of the courts that appraisements shall 
 not exceed the present value, that protects the public interests, 
 and it is the requirement that the plant shall be valued as a 
 going concern that insures the owner in at least a part of the N 
 uncompensated service which has been rendered. 
 
 To speak of insuring the owner against uncompensated ser¬ 
 vice may appear in effect as appealing to the “original cost and 
 deficit” method. But this appearance vanishes when the com¬ 
 pensation is limited to the present value of the property. 
 
 That the owner should receive compensation for his out¬ 
 lays so long as it does not exceed this value, is manifestly just. 
 
 It is obvious also that to hold that the owner should be thus 
 compensated, within the limits of value, is very different from 
 holding or allowing, that the compensation shall exceed these 
 limits if the costs are in excess. 
 
 This distinction is fundamental. In one case the munici¬ 
 pality always gets value received, and the risks are carried by 
 the owner. In the other case, the municipality is made io 
 shoulder the risks of a business for which it is only remotely 
 responsible. 
 
 27 
 
These distinctions are in full harmony with the doctrine 
 laid down by Judge Savage in the Brunswick case in the para¬ 
 graph quoted above, page 23, which is in substance that present 
 value must govern, though original cost is legitimate evidence to 
 be considered as bearing upon value. 
 
 Some confusion in the methods of valuation, as with tlie 
 rights and responsibilities of public service corporations, aie 
 perhaps inevitable during the transition period from the old to 
 the new conception of a public utility. 
 
 No one can reasonably deny that if the public utility being 
 valued was brought into being as the joint product of public and 
 private agencies, and if during all of its past existence it has been 
 operated under strict governmental control, w T ith a scale of rates 
 which furnished proper remuneration to the operator, that the 
 actual original cost of the physical property, increased by the 
 outlay in creating the business, might reasonably be conside-ed 
 the fair investment sum sought. 
 
 But there are no such public utilities in existence today. 
 Those now being operated by semi-private and quasi-public 
 agencies, were created by such agencies under contract with the 
 municipalities which they serve. 
 
 By the theory of their creation the risks were assumed by the 
 owners. If they made money it was theirs, if they did not, they 
 would have to bear the loss. 
 
 The public could not be called upon to make them whole, 
 either directly or indirectly, except so far as the value of the 
 property will affect that result. To this value they are entitled 
 at least as far as is necessary, to proper remuneration. But they 
 have no right to compensation beyond that given by the value 
 of the property. 
 
 It should not be assumed that in all cases the value of the 
 property should be enhanced by the full amount represented by 
 the difference of the net earnings of the operating plant com¬ 
 pared with the hypothetical plant, that is, by the full amount of 
 the going value. 
 
 After the revenue of the operating plant has been devel¬ 
 oped substantially to the level of the city it serves, it may be 
 found that an enhancement of even less than one-half of the full 
 going value will give an investment adequate to afford proper 
 compensation to the company. In such event, the city becomes 
 a large beneficiary from the past operations of the plant. 
 
 It is thus seen that an equitable valuation of a public utility 
 involves a careful consideration of many variable elements. 
 
 It is little wonder then that the Wisconsin commission 
 should find that different cases present different aspects, and 
 
 28 
 
that conclusions that seem justified in one case, are not consist¬ 
 ent and just in another. 
 
 Difficulties will arise, whatever theory of valuation is adopt¬ 
 ed, but that theory which follows the true economic principles of 
 value will be found to be the simpler and freest from em¬ 
 barrassments. 
 
 So long as the appraiser keeps within the limits of actual 
 values he is not likely to go far astray. But if he attempts to 
 deal in “original costs and deficits,” except as a mere check, as 
 evidence to educate his judgment, nothing but confusion will 
 follow. 
 
 Herein lies the contrast of the two methods of valuation. 
 
 “Origial costs and deficits” consistently followed may lead 
 to great injustice, and without a resort to present value for com¬ 
 parison, the appraiser may often be unable to get his bearings. 
 
 But so long as logically determined present values are dealt 
 with no serious injustice can result. 
 
 Such being the case it is evident that the doctrine of valua¬ 
 tion laid down by the courts, is the only one which will safely 
 guard the rights and interests of the public, as well as of the 
 owners of the utility. 
 
 Being convinced of the correctness of this position, it has 
 been the endeavor in this case to find that sum for the invest¬ 
 ment, which being, by a wide margin, within present values, will 
 bring to the owners of the Peoria Water Works, substantial 
 compensation for the service they have rendered the city. 
 
 PEORIA WATER WORKS. 
 
 Historical, Descriptive, Financial. 
 
 In a sense, the water works built by the City of Peoria in 
 1868 and ’69, and operated until November 1, 1889, when they 
 were turned over to the Peoria Water Co., the assign of Moffett, 
 Hodgkins & Clarke, were the beginning of the present plant, and 
 for certain purposes the latter should be considered as the con¬ 
 tinuation of the former. 
 
 Appendix IV of the report of March 24th, contains a brief 
 historical statement of such salient facts as could be culled from 
 the city records in the offices of the City Clerk and City Comp¬ 
 troller. The minutes of the City Council, covering this period, 
 are available, but unfortunately, in only a limited number of in¬ 
 stances do they contain the detailed reports of the Water Works 
 Committee, or the Superintendent of Water Works, except by 
 inferences, and what is still more unfortunate, these original 
 reports are generally not on file. The data available is, hence, to 
 a certain extent, fragmentary. 
 
 29 
 
It has been possible, however, to arrive at a reasonably close 
 approximation of the cost of the water works, and of their oper¬ 
 ation, and the income from the various sources, of water fates, 
 bonds and taxes. 
 
 The following is a statement covering construction and 
 operation of the plant, from which it will be observed that the 
 cost of the distribution system is placed at $462,000, while in 
 Appendix IV of the March 24th report, it is given as $420,000, 
 the total plant cost being $662,000 instead of $620,000. This 
 variation is partly due to a revision of the figures, but mainly to 
 the discount on bonds and interest during the first construction 
 period being included. 
 
 The following is a summary of the approximate cost of 
 building and operating these works, covering twenty years, from 
 1869 to November 1, 1889, when the plant was acquired by the 
 Peoria Water Company. 
 
 Cost of construction includes interest during the period of 
 first construction, June 1868, to December 1869, and discount 
 on bonds: 
 
 Cost of pumping station, including real 
 estate, inlet from river, pumps, boil¬ 
 ers, etc.$200,000 
 
 Distribution system, including city wells... . 462,000 $ 662.000 
 
 Operating expenses .$436,000 
 
 Interest paid . 729,000 $1,165,000 
 
 Total outlay on account of works.$1,827,000 
 
 Receipts. 
 
 Water rents and taps.$505,000 
 
 Bonds. 500,000 
 
 Income, miscellaneous . 22,000 
 
 Income from taxes. 800,000 $1,827,000 
 
 The plant was sold for $450,000, and there was received for 
 water rents, $505,000, a total of $955,000, which taken from the 
 total outlay of $1,827,000, leaves $872,000 as the cost of furn¬ 
 ishing fire protection, or public service, for twenty years, which 
 is $43,500 per year. 
 
 The works started with 15.5 miles of street mains in 1869. 
 
 / 
 
 and ended, in 1889, with 45 miles, the yearly average being not 
 more than 33 miles. 
 
 On this basis, the cost of fire service per mile of pipe in use, 
 while the city operated the plant, was $1,320 per annum. 
 
 Prior to building the works the cost of the fire department 
 per year was $13,000. 
 
 30 
 
The first official act leading to the construction of the orig¬ 
 inal works was taken by the City Council, February 4, 1868, 
 when a committee was authorized to employ an engineer to 
 prepare plans for a system of water works. 
 
 This resulted in engaging Joseph A. Lock, formerly assistant 
 engineer of the Louisville Water Works, who made surveys and 
 plans for a reservoir system, estimated to cost $310,059. 
 
 The committee reported against the reservoir plan, and in¬ 
 stead recommended the Holly direct pressure system, equipped 
 with Holly eliptical rotary pumps, to have a capacity of 3,500,000 
 gallons in 24 hours. 
 
 The Holly system was then in an experimental stage, and 
 the Peoria plant must have been among the first of the kind built 
 
 May 25, 1868, the committee was authorized to contract 
 with the Holly Company for the pumping plant, and a few days 
 later to contract for pipe. 
 
 December 7, 1869, the Water Works Committee reported 
 that water was first supplied through the pipes on June 22, and 
 that the works were substantially completed December 1st, at 
 which time, 15^4 miles of pipe had been laid, and 110 fire 
 hydrants had been set. They had cost on a cash basis, $353,133. 
 
 The Holly machinery did not prove durable, and was very 
 extravagant in the use of coal. 
 
 About 1874 or ’75 one Dean, and one Cameron pump was 
 purchased, and in 1879 and 1880, two Worthington pumps were 
 installed, each rated at 2,500,000 gallons capacity in 24 hours. 
 
 The pumping plant and supply works were located at Grant 
 street and the Illinois river, the water being drawn from the 
 river. 
 
 The quality of the water was very bad, and seriously handi¬ 
 capped the plant in obtaining revenue. Though in four years 
 it had acquired a revenue of $22,615 per year, in 1889, sixteen 
 years later, the revenue was only about $33,000, an increase of 
 less than 50 per cent. 
 
 During this time the population of the city had grown from 
 about 25,000 to 41,000, and the pipe mileage was nearly doubled. 
 
 The service rendered by the plant not being satisfactory, in 
 1887, Mayor Kinsey urged that a reservoir system be built, and 
 in the following year he renewed the recommendation. 
 
 As a result of the then existing conditions, and the Mayor’s 
 recommendations, and because the city could not obtain the 
 money to reconstruct the plant with a suitable supply of potable 
 water, on May 4, 1889, the council passed the present water 
 works ordinance, granting Moffett, Hodgkins & Clarke a fran¬ 
 chise to rebuild, enlarge and extend the water works system, 
 and providing for the sale to them of the then existing works 
 for $450,000, the amount of the outstanding water works bonds. 
 
 31 
 
The franchise was granted for thirty years, with a provision 
 for a renewal for an equal term, if the plant shall not have been 
 purchased by the city, by the end of the first thirty years. 
 
 It was not to take effect until a water supply satisfactory to 
 the City Council had been discovered by Moffett, Hodgkins & 
 Clarke, and accepted by the City Council. 
 
 The ordinance of May 4th was amended July 23, 1889, and 
 on November 1st the old city works were turned over to the 
 Peoria Water Company, the assigns of Moffett, Hodgkins & 
 Clarke, which Company they had organized June 2, 1889; Mof¬ 
 fett, Hodgkins & Clarke taking a contract to carry out the terms 
 of the ordinance. 
 
 The property transferred consisted of the pumping works, 
 river inlet and lands belonging therewith, 45 miles of street 
 mains and hydrant connections, 4 inches and 16 inches in 
 diameter, 368 fire hydrants, and 2,084 service pipes, with such 
 appurtenances as usually accompany a water plant. 
 
 Of the 45 miles of pipes, about 31.2 miles remained in the 
 system, 9.3 miles were taken up and relaid, and 4.5 miles of the 
 small pipes were abandoned, disappeared in some manner, or 
 never existed. 
 
 The structural value of the old plant as a part of the 
 
 new, is estimated at ..'$225,000 
 
 The going value. 75,000 
 
 Total value of the property.$300,000 
 
 Leaving $150,000 as the cost of the franchise to Moffett, 
 Hodgkins & Clarke. 
 
 The works specified in the ordinance granted to Moffett, 
 Hodgkins & Clarke were to be a combined “direct pumping and 
 reservoir system/’ 
 
 There were to be three compound pumping engines, each 
 with a capacity of not less than 6,000,000 gallons in 24 hours. 
 
 The distribution system was to have 75 miles of street mains, 
 of which not more than 17 miles were to be 4 inches in diameter, 
 and not exceeding 23 miles, 6 inches in diameter. 
 
 A 30-inch main was to extend from the pumping works to 
 the court house square. It was built beyond the square, and 
 has a length of 16,180 feet. The 30-inch main connecting the 
 distribution system with the reservoir is 5,273 feet in length. 
 
 One thousand fire hydrants were to be set along the 75 miles 
 of street mains. 
 
 One earthen reservoir was built, having a capacity of 18,- 
 000,000 gallons, and two elevated steel water tanks, having a 
 capacity of 500,000 gallons each. The flow line of the reservoir 
 
 32 . 
 
and tanks was to be 220 feet above the corner stone of the court 
 house, or 320 feet above city datum. 
 
 Some years after the tanks were built one of them collapsed, 
 and the other one was subsequently dismantled. 
 
 The franchise ordinance provided that the grantees should 
 at their own expense investigate for a source of supply, and that 
 the water furnished should be clear and wholesome, of such 
 standard or purity as to secure the approval of the City Council, 
 and that before the then water works system should be con¬ 
 veyed to them, a sample of water and source of supply should be 
 accepted by the council. 
 
 The present pumping works are located on the Illinois river, 
 and near to the tracks of the Rock Island railroad, 6,400 feet 
 above the city limits, and 15,400 feet from the court house square. 
 
 The reservoir is located to the northwest of the pumping 
 station, and one mile distant therefrom, in a direct line. The 
 reservoir and pumping station both being outside the city. The 
 Village of Averyville lying between the pumping works and 
 the city, and is supplied with water by the Company. 
 
 The water supply system as actually built and in operation 
 today, consists of one main central open well, containing a steel 
 collecting tank on the inside, which is supported by pipe posts 
 sunk to the rock, with which the suction pipes leading to the 
 pumps connect. 
 
 In addition to this there are seven subsidiary wells, located 
 up and down the river for a distance of 4,580 feet. The extreme 
 southerly one being 1,250 feet from the central well, and the 
 extreme northerly one, 3,330 feet therefrom. One of these sub¬ 
 sidiary wells is just being completed, and as yet has furnished 
 no water. 
 
 The water is conveyed from the two southerly wells to the 
 central well through a wooden stave conduit, 20 inches in 
 diameter, and from the northerly gang of wells through a 24- 
 inch sewer pipe conduit laid to a grade. 
 
 In most of these wells, including the central well, vertical 
 centrifugal pumps, operated by Pelton water motors, are in¬ 
 stalled, the motors being operated by water supplied by the 
 main pumps. 
 
 Electric motors are being substituted for these hydraulic 
 motors, thus relieving the main city supply pumps of this work. 
 
 The water is contained in an underlying stratum of gravel 
 and sand that lies above bed rock. Above this stratum, that is 
 of varying thickness and consistency, is a bed of practically im¬ 
 pervious clay. 
 
 Inside of the wells there are perforated steel caissons in 
 which the centrifugal pumps are placed, the water being drawn 
 
 33 
 
through the perforated shells of the caissons, which act as 
 strainers in holding back the sand and gravel. 
 
 The extreme bottom of these caissons are generally sunk to 
 a level of from 6 to 10 feet below city datum. 
 
 The level of the extreme high water in the Illinois river at 
 the upper free bridge, near to the pumping station, is 46.15 feet 
 above city datum. As the walls of the wells are carried above 
 high water, the total depths of the wells vary from 53 to perhaps 
 57 feet. 
 
 Extreme low water in the river at the upper free bridge is 
 given as 22.55 feet above city datum. 
 
 With no draught on the wells, the level of the water in 
 them is approximately the same as the river level, but when 
 being pumped, the level drops below the river level, variable dis¬ 
 tances, depending upon the quantity of water being drawn, and 
 the amount of the underground water supply. 
 
 As none of the water appears to come from the river, the 
 available supply varies with the surface supply that reaches 
 the water bearing stratum. 
 
 With a minimum ground water supply, coincident with a 
 low river stage, the surface of the water in the well would reach 
 its lowest level. 
 
 In November, 1908, the low water stage of the river was 
 30.5 feet and the level of the water in the small wells sunk inside 
 of the central well was 8.5 feet, a difference of 22 feet. 
 
 On March 9 and 13, 1908, the river stage was 45.50 feet, near 
 to extreme high water, the well at same date was 41 feet. 
 
 August 9 and 11, 1909, with a pumping rate of 10,000.000 
 gallons per day, the river stage was 32.8 feet and the well 17 
 feet, a difference of 15.8 feet. 
 
 During June and July, 1910, the limit of the present supply 
 seemed to have been reached, and it is believed that the limit of 
 the developed water bearing field has also been reached, and that 
 it cannot be increased by expanding its boundaries. For this 
 reason a new field, about 2^4 miles above, on the river,, has 
 been investigated and the property acquired. 
 
 The Peoria Water Works Company, in its own name, and 
 in the name of the Richwoods Water Company, has acquired 
 about 205 acres of land, including the pump house and reservoir 
 tracts, and 76 individual lots, much of it lying to the north and 
 west of the pump house. It has also secured the right to control 
 the use of 88 acres more. 
 
 With the exception of the pump house and reservoir tracts, 
 and the strip of land stretching up and down the river, upon 
 which the wells have been developed, all of these lands, and 
 rights of control, have been acquired to protect the water supply 
 from possible contamination, real or hypothetical. 
 
 34 
 
Taking counsel of the experience with a water supply drawn 
 raw from the Illinois river, which received the drainage of num¬ 
 erous cities between Peoria and Chicago, and along the Kan¬ 
 kakee river, as also a large part of the sewage of Chicago, the 
 council inserted stringent provisions in the water works ordin¬ 
 ance to guard against contamination. 
 
 A part of Section 6 reads: 
 
 ‘'The City Council shall have the right to examine 
 from time to time the quality of the water supplied, and 
 the grantees agree to maintain and furnish during the 
 continuance of this franchise, water of as good or better 
 quality than that of the sample originally furnished and 
 accepted by the city, and said grantees agree to maintain 
 and keep said source of supply in the best possible state 
 of purity, and to take every possible precaution to pro¬ 
 tect the same from contamination or pollution from any 
 source whatever. In no case is the supply of water to be 
 taken from the Illinois river, nor from a location that 
 would be subject to drainage from any cemetery. Said 
 location of water supply shall be north or northeast 
 from the northern part of the city limits. 
 
 “It is expressly understood and agreed by and 
 between the parties hereto that in case said grantees 
 shall fail to comply with the provisions of this section 
 requiring said grantees to supply the inhabitants of the 
 City of Peoria with clear and wholesome water, said 
 grantees shall thereby forfeit to the City of Peoria the 
 sum of one hundred and twenty-five dollars ($125.00) 
 per day for each and every day they shall fail for any 
 reason to supply such clear and wholesome water as 
 aforesaid; provided, that the City Council of the City of 
 Peoria shall first cause to be given to said grantees 
 through any officer of said company, or agent in charge 
 of said company’s business in the City of Peoria, fif¬ 
 teen days’ notice that said water has been pronounced 
 impure and unwholesome and not up to the standard 
 prescribed by the said City Council. The said amount 
 to be recoverable of and from said company in an action 
 of debt by and in the name of the City of Peoria.” 
 
 On taking over the old city works, November 1, 1889, Mof¬ 
 fett, Hodgkins & Clarke proceeded to the rehabilitation of the 
 distribution system, and to the construction of the new parts of 
 the works hereinbefore described. Construction continued 
 through 1890 and 1891, and was so far advanced early in the 
 year 1892—probably about February—that water was supplied 
 
 35 
 
from the new central well by the new pumps. The other wells 
 not being included in the Moffett and Clarke contracts were not 
 installed by them. 
 
 On May 21, 1892, the Peoria Water Company notified the 
 city that they had completed all the extensions and enlargements 
 of the water works, and were ready for a test under the or¬ 
 dinance. 
 
 On June 3 and 4, 1892, Professor J. B. Johnson made a test 
 of the works for the city, and reported that all of the require¬ 
 ments of the ordinance relative to fire streams and water supply 
 had been fully complied with. And on July 25th the City Council 
 formally accepted them. 
 
 During the period from November 1, 1889, to the acceptance 
 of the works, July 25th, 1892, the old city works and the new 
 ones were operated in turn by Moffett, Hodgkins & Clarke. 
 
 After the latter date, and until the appointment of a receiver, 
 January 8, 1894, the plant was operated by the Peoria Water 
 Company. 
 
 The receiver continued in charge of the plant until January 
 14, 1898, when the property was sold to trustees for the bond¬ 
 holders under decree of foreclosure. 
 
 On July 20, 1898, the trustees conveyed the plant to the 
 Peoria Water Works Company, which has operated it since 
 that time. 
 
 During each of the periods of ownership and control, since 
 the works were accepted by the city July 25, 1902, more or less 
 construction work has been done, and lands purchased, much of 
 which stands in the name of the Richwoods Water Company. 
 
 The Richwoods Water Company was incorporated in 1898, 
 during the reorganization following the foreclosure sale, to take 
 over a part of the water supply works that had previously been 
 built, and to develop them to a greater extent subsequently; to 
 acquire lands needed for the extension and protection of the 
 water supply, and to take over all of the distribution system 
 lying outside of the then city limits, except the 30-inch mains 
 leading to the city and to the reservoir. 
 
 This Company also acquired the rights and franchises 
 granted by the Villages of North Peoria, South Peoria and 
 Averyville, and rights in the upland addition to the City of 
 Peoria. It also owns the franchise for the Village of Bartonville, 
 and the pipe system supplying that village and adjacent territory. 
 
 THE FINANCIAL SIDE OF THE TWO COMPANIES 
 that own the property constituting the Peoria Water Works, 
 has been approached with difficulty, and with more or less un¬ 
 certainty. But by culling from the original franchise ordinance 
 and the amendments thereto, from the petition for an injunction 
 in the case of the Peoria Water Works Company vs. the City of 
 
 36 
 
Peoria, filed in the Circuit Court of the United States, for the 
 Southern District of Illinois, on the 19th day of June, 1908; from 
 the City Council records, and from the inventories of the property 
 belonging to the two companies, and by inquiries made from time 
 to time of persons connected with the affairs of the Peoria Water 
 Company, material for a financial statement, which is believed to 
 be substantially correct, was obtained. 
 
 A statement of the revenue and operating expenses of the 
 plant, from November, 1889, to 1903, inclusive, was also furn¬ 
 ished. From 1904 to 1908 inclusive, we have the auditor’s figures- 
 
 The Peoria Water Company, incorporated June 2, 1889, with 
 a capital of $1,000,000, executed and delivered to the City cf 
 Peoria, October 25th, 1889, two non-negotiable bonds, in the 
 sum of $225,000 each, one maturing in 19 years and the other in 
 30 years. These bonds were secured by a first mortgage on the 
 property of the Company, and were given to secure the payment 
 by the Peoria Water Company of $450,000 of Peoria City bonds, 
 that had been issued on account of the old water works. 
 
 Upon their delivery, the City of Peoria deeded the original 
 water works to the Company. 
 
 The following is a list of said city bonds, with the annual 
 interest. See Sec. 2 of ordinance: 
 
 $ 33,000 of 6 per cent bonds, due August 1, 1889, interest. .$ 1,980 
 108,000 of 7 per cent bonds, due April 1, 1890, interest. . 7,560 
 
 12,000 of 7 per cent bonds, due August 1, 1890, interest.. 840 
 2,000 of 7 per cent bonds, due April 1, 1891, interest. . 140 
 
 $10,520 
 
 50,000 of 7 per cent bonds, due May 15, 1899, interest. .$ 3,500 
 50,000 of 5 per cent bonds, due May 15, 1901, interest. . 2,500 
 195,000 of 4 y 2 per cent bonds, due June 1, 1908, interest.. 8,775 
 
 $14,775 
 
 The Peoria Water Company executed an issue of $2,000,000, 
 6 per cent, 30 year bonds, bearing date November 1, 1889, pay¬ 
 able toffhe Atlantic Trust Company of New York, secured by a 
 trust deed to the said Trust Company as trustee. 
 
 In this connection it should be said that as long as these city 
 bonds were outstanding the interest on $295,000 of them, those 
 maturing in 1899 and later, was always paid by the city, and the 
 amount thereof deducted from the hydrant rental, thereby reduc¬ 
 ing the apparent net income of the works by that amount. 
 
 Moffett, Hodgkins & Clarke paid $155,000 of them soon 
 after the city works were taken over, with the interest thereon 
 to the time of redemption. 
 
 37 
 
This statement is verified by the statement of revenue and 
 operating expenses furnished. 
 
 Moffett, Hodgkins & Clarke were to receive from the Com¬ 
 pany in payment of the work done under their contract, $1,050,000 
 of the 6 per cent bonds of the Company, and $200,000 of the Com¬ 
 pany stock. 
 
 On the acceptance of the works, July 25, 1892, the Company 
 had parted with, or was under obligations to part with, a suf¬ 
 ficient amount of their bonds to pay the contract price of $1,050,- 
 000 in bonds, to reimburse Moffett, Hodgkins & Clarke for the 
 $155,000 city bonds, with interest, and to pay for certain extra 
 work done by Moffett, Hodgkins & Clarke. 
 
 As a result of the contract with the Peoria Water Company 
 Moffett, Hodgkins & Clarke, Incorporated, were thrown into the 
 hands of a receiver and their affairs liquidated. 
 
 The Peoria Water Company also was unable to carry the 
 load which had been assumed, and defaulted in the payment of 
 interest due May 1, 1893, or for that due earlier as well, or, at 
 any rate, the default was made, less than one year after the 
 acceptance of the works by the city. 
 
 Because of this default a receiver was applied for by the 
 Atlantic Trust Company, and Cornelius B. Gold was appointed 
 receiver by the Circuit Court of the United States, January 
 8, 1894. 
 
 The Trust Company set out in its bill of complaint that 
 there was then due the purchasers of the Company’s bonds, 
 $1,381,475. 
 
 That this sum properly represented the Company’s liabil¬ 
 ities, exclusive of $295,000 city bonds, then outstanding, is shown 
 by the following considerations and financial statement. 
 
 In addition to the liabilities incurred under the Moffett. 
 Hodgkins & Clarke contract, construction work had been done 
 by the Company, between July 25, 1892, and January, 1894, 
 estimated to cost $11,228. 
 
 Interest had been paid, or had accrued, on the $1,050,000 con¬ 
 tract bonds, from about July 1, 1890, to the time of the receiv¬ 
 ership. 
 
 Interest had also been paid, or had accrued, on the bonds 
 issued to take up $155,000 of city bonds, with interest, as well as 
 for the extra work done by Moffett, Hodgkins & Clarke. 
 
 As an offset to these liabilities $138,912 of net earnings had 
 been received, between November 1, 1889, and November 1, 1893. 
 
 Neither Moffett, Hodgkins & Clarke or the Peoria Water 
 Company were able to realize on their thirty year, 6 per cent 
 second mortgage bonds, more than 90 cents on the dollar, so that 
 in estimating the cost of work, or the cost of funding city bonds, 
 
 38 
 
or cash obligations of any kind, it must be done on a 90 per 
 cent basis. 
 
 The indebtedness of the Company, January, 1894, was made 
 up of the following items: 
 
 Moffett, Hodgkins & Clarke contract bonds.$1,050,000 
 
 Interest on same for 3 years and 6 months, 6 per cent. . 220,500 
 
 $155,000 city bonds funded on basis of 90 cents on the 
 
 dollar. 172,222 
 
 Interest on same for 4 years, 2 months, 6 per cent. 33,055 
 
 Construction, July 25, 1892, to January, 1894. 11,228 
 
 Extra work done by Moffett, Hodgkins & Clarke, ex¬ 
 pense of Company, etc., to balance. 33,382 
 
 Total outlay to January, 1894.$1,520,387 
 
 Less net revenue for 4 years. 138,912 
 
 Indebtedness, January, 1894, not including $295,000 
 city bonds.$1,381,475 
 
 It should not be assumed that this statement would be veri¬ 
 fied in detail by the entries on the Company’s books. 
 
 The items most liable to vary from the actual, are the con¬ 
 struction item of $11,228, the interest item of $220,500 on the 
 contract bonds, as there is nothing definite as to when the in¬ 
 terest should begin to run, and the $33,382 for extras, interest 
 and expenses, the amount of which was determined by the neces¬ 
 sity of a balance. It might very well be that the construction 
 item and the interest on the construction bonds are too low, and 
 this item too high. But that $1,381,475 may be accepted as the 
 proper indebtedness of the Company, January, 1894, exclusive of 
 $295,000 of city bonds, admits of no reasonable doubt. 
 
 This sum takes no cognizance of the losses of Moffett, 
 Hodgkins & Clarke, which are said to have been large. 
 
 The receiver operated the plant for the years 1894 to 1897, 
 inclusive, and January 14, 1898, the property was sold, under a 
 decree of foreclosure, to trustees for the bond holders, for $1,- 
 500,000, subject to outstanding city bonds to the amount of 
 $295,000. 
 
 The question arises, does $1,500,000 cover the outlay on the 
 total property up to the date of sale? Evidently not, as is ob¬ 
 vious from the following considerations: 
 
 As has been seen, it was impossible, during the early years, 
 for the Company to realize on their thirty year, second mortgage, 
 6 per cent bonds, more than 90 cents on the dollar, and much 
 less could the interest charges have been reduced during the 
 receivership. 
 
 39 
 
The net income for the four years of the receivership was 
 $199,960. 
 
 The total indebtedness of the Company, January, 1894, on a 
 cash basis, was, as has been seen, $1,381,475. 
 
 The estimated cost of the construction work done and prop¬ 
 erty purchased, from 1894 to 1897, inclusive, is $114,265. Hence 
 the following statement: 
 
 Indebtedness January, 1894, not including city bonds. .$1,381,475 
 Interest on $1,381,475 indebtedness for 4 years at 6 
 
 per cent. 381,554 
 
 Estimated cost of construction for 4 years. 114,265 
 
 $1,827,294 
 
 Less total net earnings for the four years after deduct¬ 
 ing from the revenue, the interest paid by city on 
 $295,000 city bonds. 199,960 
 
 Total outlay and obligations, exclusive of city 
 
 bonds, to January, 1898.$1,627,334 
 
 which is $127,334 in excess of the price for which the property 
 sold. 
 
 The question arises, how did the Company take care of this 
 surplus indebtedness? 
 
 The answer may be found in the Richwoods Water Com¬ 
 pany, which was organized simultaneously with the organization 
 of the Peoria Water Works Company. 
 
 The inventory of the property of the Richwoods Company 
 shows that it holds title to a large part of the property con¬ 
 structed and acquired during the receivership, which is included 
 in the $114,265 of construction outlays. 
 
 Evidently the $200,000 bonds of this Company were used to 
 take up this surplus, and to acquire other property. 
 
 The capital stock of the Peoria Water Works Company is 
 $100,000, and the bonds of the two companies aggregate $2,- 
 200,000. 
 
 With the organization of these companies there was a re¬ 
 adjustment of the bonded indebtedness of the defunct Peoria 
 Water Company. 
 
 The holders of the bonds then outstanding consented to a 
 scaling of their interest from 6 per cent to 4 per cent, the 2 per 
 cent difference being capitalized at 5 per cent and income cer¬ 
 tificates issued therefor. 
 
 These certificates were subsequently exchanged for 4 per 
 cent debenture bonds, at the rate of 50 cents on the dollar. The 
 debentures amounting, it is said, to $142,900. Interest was paid 
 
 40 
 
on these debentures for only a few years, and no dividends have 
 at any time been paid, it is said. 
 
 These bond transactions during the reorganization are not 
 fully verifiable in all of their details. Hence the amount of in¬ 
 terest paid on account of the $2,200,000 bonds of the two com¬ 
 panies, and the outstanding debenture bonds, since the receiver¬ 
 ship cannot be exactly determined. 
 
 The petition filed by the Company in the rate case, June, 
 1908, avers that the average annual interest paid during the then 
 last nine years was $86,798.39. 
 
 Subsequent to the organization of the Peoria Water Works 
 Company it paid the whole amount of the outstanding city bonds 
 as follows: 
 
 May 15, 1899 .$ 50,000 
 
 May 15, 1901 . 50,000 
 
 On or before February 1, 1905. 195,000 
 
 As before stated, until these bonds were taken up, the city 
 paid the interest, and charged the amount against hydrant rental, 
 but in order to meet them the Company had to dispose of some 
 of its own bonds, or of the bonds of the Richwoods Water Com¬ 
 pany, which could not be done on better terms than 90 cents on 
 the dollar, with an equivalent interest rate of not less than 6 
 per cent. 
 
 The transaction that resulted in scaling the interest to 4 per 
 cent, and capitalizing 2 per cent in the manner described above, 
 made no material difference in the Company’s liabilities, the prin¬ 
 cipal advantage being that it reduced the first lien indebtedness 
 so as to lessen the danger of another receivership. 
 
 Hence the better way to determine the approximate actual 
 cost of the property of the two companies, to the end of the year, 
 1908, is to compute the interest at 6 per cent for eleven years on 
 $1,627,334, the cost of the works January, 1898, exclusive of city 
 bonds, and to fund the principal of the city bonds at the date of 
 payment, on a 90 per cent basis, and add the interest at 6 per cent 
 from the date the bonds were paid, to December 31, 1908. 
 
 Also add the cost of construction during the eleven years, 
 with interest at 6 per cent, which, as estimated, amounts in all to 
 $320,709, and reduce the sum thus found by the net earnings for 
 the same period. 
 
 The following is a statement of the cost of all the property of 
 the two companies to December 31, 1908, computed on the speci¬ 
 fied basis: 
 
 41 
 
Cost of plant, exclusive of city bonds, January, 1898. . .$1,627,334 
 
 Simple interest at 6 per cent for eleven years. 1,073,(HO 
 
 $50,000 city bonds paid May 15, 1899, funded at 90 
 
 per cent . 55,555 
 
 Interest on same, 6 per cent for 9.5 years. 31,666 
 
 $50,000 city bonds, paid May 15, 1901, funded at 90 
 
 per cent . 55,555 
 
 Interest on same, 6 per cent for 7.5 years. 25,000 
 
 $195,000 city bonds paid February 1, 1905, funded at 
 
 90 per cent. 216,666 
 
 Interest on same, 6 per cent for 3 years and 11 months. 50,920 
 
 Construction, 1898 to 1903 . 183,057 
 
 Interest on same, 6 per cent for 8 years.. 87,857 
 
 Construction, 1904 to 1908. 137,652 
 
 Interest on same, 6 per cent for 2 years. 16,518 
 
 Total.$3,560,820 
 
 Less net income for 11 years after paying in¬ 
 terest on $295,000 city bonds up to the 
 time of their redemption,as shown above. 
 
 Net income 1898 to 1903 inclusive.$524,175 
 
 Net income 1904 to 1908 inclusive. 701,843 1,226,018 
 
 Total net outlay, or cost of property, December 
 
 31, 1908, not including depreciation.$2,334,802 
 
 The foregoing statement gives no consideration to depreci¬ 
 ation, which should be provided for from the earnings, and which, 
 if applied, would reduce the net earnings by the amount of the 
 depreciation, and hence increase the cost of the plant by the same 
 amount. 
 
 In the valuation of March 24th the total depreciation was 
 found to be $191,445. This added to the above footing gives $2,- 
 526,247. 
 
 The construction items, aggregating $434,974, entering into 
 this sum, are liable to a variation from the actual, because the 
 prices used in the estimates may have been different from those 
 actually paid. 
 
 On the other hand, there have been carried net, and not fund¬ 
 ed at 90 per cent, which is the equivalent of a 10 per cent discount. 
 
 By taking off $76,247, full allowance will be made for the cost 
 of the two water tanks with interest, which are not now a part 
 of the plant, and the total cost will stand $2,450,000. 
 
 This may properly be considered a conservative determina¬ 
 tion of the investment by the “original cost and deficit” method. 
 This sum is not the result of compounding deficits, and does not 
 exceed what it would have been if determined on a 7 per cent 
 
 42 
 
simple interest basis, without a bond discount. And 7 per cent is 
 believed to be only a fair rate of return on capital used in the 
 operation of public utilities, under such conditions. See pp. 43 
 to 47 of this report. 
 
 On March 24, when the valuation of $2,150,000 was reported, 
 many of these facts were not at hand, and none had been an¬ 
 alyzed. No attempt having been made to compare results by the 
 two methods of obtaining the investment. 
 
 The outcome of this comparison properly suggests the de¬ 
 sirability of a fuller consideration of the method used in finding 
 the investment of $2,150,000. 
 
 THE INVESTMENT FOR THE PEORIA WATER WORKS 
 
 In the general discussion of methods of valuation, found 
 on pages 10 to 29 of this report, the first method considered, 
 viz: the finding of the plant value as a going concern, and as 
 of the time of valuation, on the hypothesis of reproduction, 
 was held to be the proper one. 
 
 In this valuation the plant value was enhanced, in two 
 items, $316,020 in all, because of its acquired business, that is, 
 for the going value element. 
 
 The manner of estimating this element was not gone into, 
 nor did the report contain anything indicating its actual total 
 amount as determined, although it had been approximately es¬ 
 timated as amounting to more than twice the sum given. 
 
 For the purpose of this report, a more extended and care¬ 
 ful estimate has been made, and the total amount found to be 
 $856,096, based on an investment of $1,950,000, the reproduc¬ 
 tion cost of the property, as given in the report of March 24. 
 
 But with an investment sum of $2,150,000 for the present 
 plant, its going value would be reduced by $200,000, the differ¬ 
 ence between $1,950,000 and $2,150,000, making it $665,096. 
 
 On this basis there is left $665,096 less $316,020, equal to 
 $349,076, of the going value element, which is unused, that is, 
 it remains to the credit of the plant, which if taken over at the 
 price of $2,150,000, would have $349,076 of surplus value. 
 
 The details of the computation of this going value is given 
 in a table, which is accompanied by a diagram containing the 
 revenue and population curves, upon which the computation is 
 based. They are both filed Appendix III. 
 
 RETURNS. 
 
 The investment, or that sum which should be credited to 
 a public utility, having been determined, the question arises as 
 to what per cent should be allowed for returns on the invest- 
 
 43 
 
ment, that is, for interest and profits, after operating expense, 
 maintenance, taxes, the depreciation and renewals, have been 
 provided for. 
 
 In seeking an answer to this question, we properly turn 
 to court decisions, and the decisions of officials clothed with 
 semi-judicial functions. 
 
 In Wilcox, et al., representing the Public Service Com¬ 
 mission of New York, vs. Consolidated Gas Co., 212 'U. S., the 
 Supreme Court of the United States says: 
 
 “There is no rule as to any particular rate which 
 any corporation subject to legislative control in the 
 matter, has a right to obtain without legislative inter¬ 
 ference. It depends upon circumstances and locality. 
 
 In this particular case, with reference to risk attend¬ 
 ing the business, and the locality where it is carried 
 on, the complainant is entitled to a return if it is pos¬ 
 sible, of six per cent upon the fair value of its property 
 actually used in its business of supplying gas.” 
 
 “The less the risk, the less the right to any un¬ 
 usual returns upon the investment.” 
 
 The Court points out that in the valuation of the plant' the 
 lower court had allowed $12,000,000 for franchise value, which 
 was reduced to $7,781,000 by the Supreme Court, being the 
 amount which had been added to the capitalization of the plants 
 at the time of consolidation. Also that the seven constituent 
 companies down to the time of consolidation in 1884 had been 
 free from legislative regulation of rates. They had been pros¬ 
 perous and divided very large earnings in dividends. Several 
 of the companies had averaged from their creation over 16 per 
 cent dividends. Six of them in 1884 upon a capital which had 
 been increased by earnings, paid 18 per cent dividends, and 
 upon the money in it would have been 25 per cent. 
 
 As to the question of risk in that case the Court holds that 
 it was reduced to a minimum, having a monopoly of the gas 
 business in the largest city in America. 
 
 The Urbana Ohio Water Works furnishes another case 
 where the rate of return was adjudicated. 
 
 In an opinion filed November 8, 1909, in the U. S. Circuit 
 Court for the Southern District of Ohio, deciding two cases in 
 equity, viz: No. 5773, C. H. Venner Co. vs. The Urbana Water 
 Works, and No. 5805, Robert W. Kirby, Receiver, vs. The City 
 of Urbana, Judge Thompson allowed on the value of the plant, 
 in addition to operating expenses and taxes, one per cent for 
 depreciation, one and eleven one-hundredths per cent for ad¬ 
 ministration, and six per cent for interest, or interest and re¬ 
 turns. This is in addition to operating expenses and taxes, 
 
 44 
 
there was a total allowance of 8.11 per cent. The value of the 
 property which was being operated without a franchise was in 
 the judgment of the Court, $180,000, of which $25,000 was an 
 allowance for going value. 
 
 In considering the question of returns, under the heads of 
 “Interest and Profits,” page 129, Antigo Water Case, the Rail¬ 
 road Commission of Wisconsin say: 
 
 “A mere physical plant, no matter how perfect or 
 how well it is adapted to the purpose for which it is 
 intended, amounts to but little unless it has or can ob¬ 
 tain a paying business. Without business it is a dead 
 mass intsead of a living concern earning profits. To 
 have profits it must have business, or customers who 
 avail themselves of the services it renders at rates that 
 yield an adequate income.’' 
 
 After discussing the question of interest on the invest 
 ment, and pointing out that with public utilities generally it 
 may legitimately vary over a range of 4 to 7 per cent according 
 to the circumstances of the case, the Commissioners add: 
 
 “In addition to the operating expenses, including 
 depreciation and the amount actually paid as interest 
 on the investment, there must also be some allowance 
 for those who carry on the business and who assume 
 all the risks and responsibilities connected therewith. 
 
 This allowance is usually called profit and represents 
 compensation for the work of managing the business, 
 for the risks involved, and for certain other efforts.” 
 
 Speaking of the Antigo Water Works plant specifically the 
 conclusion is: 
 
 “But while the plant under investigation has to 
 pay rather high rates of interest, its financial condition 
 seems to us fairly sound, and there is every reason to 
 believe that it will greatly improve in the near future. 
 
 Its earnings are on a comparatively sound basis and its 
 securities would seem to be fairly well protected. It 
 appears to us, that for interest and profits, when taken 
 together, a surplus of about 7 per cent on the value of 
 the plant and its business as here given, is probably 
 sufficient to secure both the capital and the business 
 capacity required, and this amount we therefore, at 
 this time, regard as a reasonable return for these fac¬ 
 tors in this particular case.” 
 
 In the case of “State Journal Printing Co., et al., vs. Madi¬ 
 son Gas and Electric Co.,” decided March 8, 1910, the Railroad 
 
 45 
 
I 
 
 Commission concludes, after an extended discussion of the sub¬ 
 ject of returns, page 647: 
 
 “In view of the facts that have thus been repre¬ 
 sented in relation to this subject, it may be said that 
 the witnesses for the respondent placed that part of 
 the return on the investment which might properly 
 be termed profits at rather high figures; and that un¬ 
 der the circumstances in this case it is not unreason¬ 
 able to limit the profits to from \y 2 to 2 per cent on a 
 fair valuation of the electric plant. Such rates, in 
 addition to an allowance of 6 per cent on each case for 
 interest, would seem to be fair to the present owners, 
 as well as sufficient to secure both the business capacity 
 and capital that are required in this particular case. 
 
 It would not be unreasonable to limit the returns for 
 both interest and profit to not less than 7y 2 to 8 per 
 cent on a fair valuation of the gas plant, and to not less 
 than 8 per cent on a fair valuation of the electric 
 plant.” 
 
 In view of the foregoing decisions, and in consideration, of 
 the circumstances and conditions under which the Peoria 
 Water Works Company operates, and has operated its prop¬ 
 erty, for twenty years, there would seem to be no warrant for 
 concluding that less than 7 per cent on the fair investment 
 value of the Company’s property would be admissible to cover 
 the allowance for returns, under interest and profits. 
 
 In considering the weight that should be attached to the 
 decisions of courts touching specific rates of return, it must be 
 considered that the questions which they are called upon to 
 answer are quite different from those presented to an adminis¬ 
 trative body such as the Wisconsin Commission, or to a legis¬ 
 lative body, as a City Council, engaged in making a schedule 
 of rates. 
 
 The courts are not properly rate makers; their function 
 in rate cases is generally to decide the constitutional question 
 as to whether a specific rate fixed by some proper agency, is 
 or is not, confiscatory. The view which a judge takes under 
 such circumstances is dependent to a large extent, upon the 
 doctrines which he holds relative to the freedom which courts 
 should exercise in interfering with legislative acts. 
 
 If he is a close constructionist he will be likely to let a 
 much lower rate pass without interference than otherwise. 
 
 And the fact that he may refuse to interfere in a particular 
 case is no indication that he sustains the rate as being fair, or 
 even as being proper from the standpoint of the official or legis¬ 
 lator charged with initiating it. Such a judge is likely to hold 
 
 46 
 
that the burden of fairness must be borne by the legislator or 
 official, and that he, the judge, should only decide the question 
 whether the property is being destroyed. 
 
 Hence, if one is seeking precedents as to the proper rate 
 of return, the highest, and the ones which should be given the 
 greatest weight, are those originating with a body such as the 
 Wisconsin Commission, who are not only specifically charged 
 by the legislature to perform such functions, but who are also 
 charged with the investigation of all public utilities of the state, 
 and who reach their decisions after a full hearing of the facts 
 involved in particular cases, and class of cases. 
 
 The conditions are reversed when it comes to questions of 
 principles which should control in finding the value of the 
 property. It is pre-eminently the function of the courts to say 
 whether the present value of the property should be found, or 
 whether it should be the original cost. 
 
 Also as to whether if costs are considered, it should be 
 only as evidence, bearing on present values, or as constituting 
 the values themselves. 
 
 In some cases, as in the Urbana Water Works case, above 
 referred to, the court is called upon to stand in the position of 
 the maker of rates. Here the plant was in the hands of a re¬ 
 ceiver of the court finding the rate of return, and the fairness 
 of the rate was in question rather than the constitutional one 
 of confiscation. 
 
 NEEDED IMPROVEMENTS. 
 
 Our attention has been called by the Mayor to the fact 
 that as the Water Works plant is now built and operated, the 
 city is dependent on but one main pipe for a continuity of 
 supply. 
 
 It is true that the reservoir when well filled, holds in re¬ 
 serve a sufficient quantity to bridge over two or three days. 
 But water from the reservoir must reach the city through 
 the same pipe that conducts the direct supply from the pumps. 
 A break occurring anywhere in the 30-inch main feeder over a 
 distance of 9,600 feet, would shut off the water supply com¬ 
 pletely. 
 
 We are informed that the Board of Underwriters objects 
 seriously to this condition of affairs. 
 
 Without doubt their objections are well founded; there 
 should be another main that will give two distinct feeder lines 
 from the pumping station to the most remote parts of the dis¬ 
 tribution system. 
 
 It is apparent that if possible the new main should follow 
 an entirely new route that will command the high territory of 
 the city, now insufficiently supplied, while at the same time 
 
 47 
 
feeding the down town territory, and aiding in the equalization 
 of pressures in all parts of the city. 
 
 The present distribution system labors under the disad¬ 
 vantage, as relates to the property above the bluffs, that the 
 main feeder follows low lying streets running parallel with, and 
 rather near to the river, and must distribute the water from 
 the lower levels to the higher, over a considerable distance. 
 
 The new main should be located so that it will reverse the 
 process as much as possible. It should skirt the northern and 
 western city limits, following those streets which are unpaved 
 and without pipes where possible, and it should feed the 16-inch 
 main, that now supplies the'bluff levels, at two points. 
 
 A personal examination was made of the territory that such 
 a main would be likely to traverse, from some point below the 
 reservoir to the southwesterly city limits. 
 
 By the information thus obtained, and with the aid of a large 
 scale distribution map, a route has been approximately located, 
 and is shown on a small map filed herewith and marked Appen¬ 
 dix IV. 
 
 Starting with the pumping works, another 30-inch main, is 
 proposed, following parallel with the old one and connecting 
 with the 30-inch branch to the reservoir at Galena road and 
 Harvard avenue. 
 
 The reservoir pipe is thence followed to some point below 
 the reservoir, say Browm avenue, from which a new 30-inch 
 main leads westerly and southwesterly, striking Prospect avenue 
 at its intersection with Hill avenue. 
 
 Thence it follows Prospect avenue and McClure avenue to 
 Peoria avenue. 
 
 At this point, a 20-inch branch main leads south on Peoria 
 avenue, to Illinois avenue, where it connects with the present 16- 
 inch feeder main. 
 
 At McClure and Peoria avenues, the main is reduced to 24- 
 inch, and continues west on McClure avenue, following Eliza¬ 
 beth street, Nebraska avenue and Bourland avenue to Main 
 street, where it again connects with the present 16-inch feeder 
 main. 
 
 Here it reduces to 20 inches diameter and leads west on 
 Main street, following Institute place, Bradley avenue, Western 
 avenue, Millman and Bush streets, to Lincoln avenue. Thence 
 reduced to 16 inches in diameter, it follows Berrian, Antoinette 
 and Griswold streets to a connection with the Adams street 
 main. 
 
 While not absolutely necessary, it will be very desirable 
 to cross connect the present 16-inch bluff feeder with the Jeffer¬ 
 son street main along Fayette and Hamilton streets, as shown 
 on the map, Appendix IV. 
 
 48 
 
THIS SECOND FEEDER MAIN as described is made up 
 of the following lengths and sizes: 
 
 12,600 feet of 30-inch 
 
 15,000 feet of 24-inch 
 
 13,550 feet of 20-inch 
 7,600 feet of 16-inch 
 
 48,750 feet total, or 9^4 miles. 
 
 The estimated cost is $220,000. 
 
 Class A pipe above the bluff. 
 
 Class B pipe below the bluff. 
 
 ANOTHER NEEDED IMPROVEMENT is the extension 
 of subsidiary water mains generally into built up territory, 
 where there is property to protect and buildings to be supplied. 
 
 While no survey has been made to determine in detail the 
 amount of pipe needed to render the distribution system fully 
 adequate for fire protection and private service, it is believed 
 from the examination made, and the lengths of mains found 
 requisite in cities of a similar class, that 20 miles, in addition to 
 the feeder main, will not more than fill the reasonable require¬ 
 ments 
 
 The cost of .such mains, approximately, will be $6,500 per 
 mile, including hyrants and valves, or $130,000 in all. 
 
 In this connection it should be remembered that up to July, 
 1910, the total mileage was only 102.6, and that with the pro¬ 
 posed new feeder mains, and 20 miles of subsidiary mains, there 
 will be but 132 miles in all. Also, that for eighteen years, since 
 1892, only 27 miles have been laid, and the distribution system 
 has consequently fallen much behind the needs of the city. 
 
 AN ADDITIONAL PUMPING UNIT of 12,000,000 gal¬ 
 lons capacity should be provided. 
 
 The cost of such a unit will depend largely on the character 
 of the service which it will be expected to render. If it is to be 
 merely an emergency pump, it will cost very much less than if 
 it is to take the burden of the work. 
 
 On the supposition that the present pumps are to be used 
 for emergencies, a new 12,000,000 unit set and housed will be 
 likely to cost not less than $40,000, and it may cost more, de¬ 
 pending upon the type of machine adopted. 
 
 IF THE POLICY OF METERING ALL HOUSE SER¬ 
 VICES is adopted, as is proposed in this report, under the head 
 of ‘‘Water Consumption and Meters,” there will be not less than 
 12,000 meters to install within three years, and not less than 
 2.000 new service pipes to lay. 
 
 49 
 
The meters should not be estimated at less than $12.50 
 apiece in place, which will make the total cost for meters, 
 $150,000. The service pipes will be likely to cost $15.00 a piece, 
 or $30,000 in all. 
 
 A SUMMARY OF THESE NEEDED IMPROVE¬ 
 MENTS is as follows: 
 
 9.25 miles of main trunk feeders.$220,000 
 
 20 miles of subsidiary mains. 130,000 
 
 One 12,000 gallon pump. 40,000 
 
 12,000 meters set. 150,000 
 
 2,000 service pipes. 30,000 
 
 Total .$570,000 
 
 While this estimate can only be considered approximate, it 
 may be assumed to substantially represent the improvements 
 that ought to be made to the Peoria water plant by the end of 
 the year 1913. 
 
 THE NECESSARY REVENUE TO CARRY THIS AD¬ 
 DITIONAL INVESTMENT must come from the following 
 sources: 
 
 1. Increase in hydrant rentals because of the increased 
 mileage of water mains. 
 
 2. New consumers on the lines of the new mains. 
 
 3. An increased number of consumers on the lines of the 
 present street mains, due to the natural growth of the city, and 
 to the gradual connecting of houses not now using water. 
 
 4. The abolishment of the free list of water takers, and the 
 turning of what is now a continual loss, into an equally con¬ 
 tinuous revenue. 
 
 5. As new meters are set, and houses now having meters 
 are put on a new scale of rates, the latter should be so fixed that 
 the meter service will carry itself. That is, one element of the 
 meter rate should be made to cover the extra expense of opera¬ 
 tion incurred by their introduction, as well as the interest and 
 renewals on the meters. 
 
 This will reduce the investment for which general provi¬ 
 sion must be made, to $420,000. 
 
 IT IS CONFIDENTLY BELIEVED THAT THE AG¬ 
 GREGATE ADDITIONAL REVENUE derived from the 
 sources named, will be fully adequate to carry this extra invest¬ 
 ment. 
 
 But even if some other provision, as an increase in the pub¬ 
 lic service revenues should have to be made, the matter is of 
 such importance as to fully warrant an extra exertion. 
 
 50 ' 
 
The reduction, or keeping down of insurance rates, would 
 seem to justify, if necessary, a rate, higher than the ordinance 
 for hydrant rentals on new extensions. 
 
 THERE ARE IMPORTANT OFFSETS TO THIS IN¬ 
 CREASED INVESTMENT, which should not be lost sight of. 
 If meters are adopted for general and compulsory application, 
 as is recommended under the heading “Water Consumption and 
 Meters,” probably the expenditure of at least $100,000, immedi¬ 
 ately necessary for an additional water supply if meters are not 
 installed, will be postponed for fifteen to twenty years. 
 
 Also, even if a new feeder main is not put in, all or nearly 
 all of the additional 29 miles must be provided in some fashion, 
 in the very near future. If this is done without an adequate 
 feeder system, such as the one proposed, at least 28 miles of 
 subsidiary mains would be necessary, and they would of neces¬ 
 sity average of larger size than the 20 miles of subsidiary mains 
 proposed in connection with the new feeders system. Hence 
 the saving would not be very great, while the loss which the 
 city would sustain by an inefficient and unsafe system would be 
 enormous. 
 
 NEW PUMPS WILL BE MUCH MORE IMPERATIVE 
 if the system is not metered than if it is, and to place the pumps 
 on the same scale of capacity and safety under each alternative, 
 they will have to be at least 25 per cent greater in size if meters 
 are not used than if they are. The non-use of meters will for 
 this reason tax the boiler capacity to a much greater extent 
 than their use. 
 
 CONSIDERING THIS QUESTION AS A WHOLE, 
 AND AT LARGE, it is not at all likely that the adoption of 
 universal metering, and carrying out the plan for an additional 
 and independent main, will increase the burden of the invest¬ 
 ment that would otherwise have to be borne, more than a trifle. 
 
 If meters are not introduced and the large main not 
 laid, the following approximate expenses would stare the com¬ 
 pany in the face at any rate: 
 
 28 miles of mains at $7,500.$210,000 
 
 New water supply. 100,000 
 
 15,000,000 gallons pumps. 50,000 
 
 2,000 services . 30,000 
 
 Total .$390,000 
 
 If they are introduced and the meters are made to carry 
 themselves, the increase investment to be provided 
 for would be.. 420,000 
 
 Difference of investment for which revenue must be 
 
 provided .$ 30,000 
 
 51 
 
When a city, and the water plant that serves it, has reached 
 the scale of development that Peoria has, there is nothing to be 
 gained in makeshifts, or in drifting with no definite goal in view. 
 
 THERE IS AN IMPORTANT AND FUNDAMENTAL 
 PRINCIPLE that water works managers lose sight of in their 
 desire to postpone what they may consider a dead, or partially 
 dead investment in the extension of water mains into new terri¬ 
 tory, which is, that if a territory has been built up without water 
 mains, the householder invariably provides cisterns, or wells 
 with pumps, to enable him to live. If after this has been done, 
 a water main is laid in front of his house, he may or may not 
 connect therewith. Or if he does connect, years may pass be¬ 
 fore he does so. 
 
 If, on the other hand, the main had been there when the 
 house was built, and the water furnished was potable and filled 
 his needs, ninety-nine chances out of one hundred, he would 
 have provided no wells and cisterns, but would have become a 
 customer at first. 
 
 This principle is verified by the company’s bill asking for 
 an injunction in the rate case, where complaint is made of the 
 slowness with which householders become customers, and that 
 when they do, many of them want to use the water works as 
 a makeshift, only paying for enough water to fill their cisterns 
 from time to time. Had the water mains been accessible from 
 the first, the cisterns might never have existed. 
 
 WATER CONSUMPTION AND METERS. 
 
 The Peoria Water Co. took over the city plant October 31, 
 1889, and operated it until the early part of 1892, after which 
 the supply came entirely from the new works. 
 
 These were officially tested June 3 and 4, 1892, and accepted 
 July 25 following. 
 
 During 28 months, October 31, 1889, to February 21, 1892, 
 while the old works were in operation, the average daily supply 
 as shown by the pumping records, was 3,330,000 gallons. 
 
 For the year June 30, 1892, to June 30, 1893, the first year 
 of operating the new works, the average daily supply was 
 2,628,000 gallons, which for a population of 46,000 gives a con¬ 
 sumption of 57 gallons per capita per day. 
 
 For the year June 30, 1909, to June 30, 1910, the last year 
 of operation, the average daily consumption was 7,435,000 gal¬ 
 lons. With a population of 73,000 as representing Peoria and 
 the adjacent villages, supplied by the Peoria Water Works Com¬ 
 pany, the consumption was 102 gallons per capita per day. 
 
 This increase of water used per capita from 57 gallons, to 
 102 gallons daily in eighteen years, is not indicative of increased 
 
 52 
 
waste, or even of increased consumption, rated on the actual 
 users of water. 
 
 The daily average consumption for each service pipe in the 
 system, January 1, 1893, was 804 gallons, and for January 1, 
 1910, it was 718 gallons, which tends to show that relatively to 
 the number of actual users of water, a reduction is taking place 
 in consumption. 
 
 Appendix V. is a diagram giving a graphic representation 
 of water consumed, service pipes, and miles of street mains, with 
 reference to population. It shows that though after July 1, 
 1892, the pipe mileage has not kept pace with population, the 
 number of services have grown from 70 per one thousand of 
 population, to 142. The same law appears from an inspection 
 of Appendix II. 
 
 It is then a demonstrated fact, that notwithstanding the 
 average daily supply of water has increased in seventeen years 
 from 2,628,000 gallons to 7,435,000, and the daily per capita con¬ 
 sumption from 57 to 102 gallons, there has been no actual in¬ 
 creased wastage relatively, or increase in the use of water per 
 actual consumer. 
 
 This does not signify, however, that there is not a large 
 unnecessary wastage and use, which may be greatly reduced by 
 the general use of meters. 
 
 The consumption at the present time is about as follows, 
 
 as shown by the latest records: 
 
 Gallons. 
 
 Daily average for the year ending June 30, 1910. 7.435,000 
 
 Daily average for month of maximum consumption 
 
 (June, 1910) . 9,046,000 
 
 Maximum consumption for single day (June 30, 1910). 10,688,000 
 The maximum consumption for a single day to August 
 
 12, 1910, was for July 9.12,458,000 
 
 THE EFFECT OF A GENERAL METERING of all 
 water services cannot, of course, be foretold exactly, but that 
 it would profoundly affect the consumption and waste of water 
 cannot be doubted. 
 
 Meters have been introduced extensively in many cities of 
 comparatively large size, and the results have been beneficial 
 to such a degree, that the advisability of their use in the most 
 of water works plants is no longer seriously questioned. 
 
 It is not to be inferred, however, that the advantage derived 
 from their use is equal in all plants, and that there are not cases 
 where the time has not arrived for their general introduction. 
 There are, however, no cities where they should not be used 
 for certain classes of service. 
 
 In this connection it should be observed that there are other 
 causes operating in many cities to keep down the water con- 
 
 53 
 
sumption, the results of Avhich are often erroneously attrib¬ 
 uted to meters. The very low consumption in many European 
 cities and in some American cities is sometimes largely due to 
 a great number of consumers being supplied through a single 
 service pipe, and without discrimination in drawing inferences 
 from water works data, meters may be given the credit for ajow 
 rate of consumption for which they are only partially the cause. 
 
 Though meters have come into general use in water works 
 of a certain class, they are not supplied universally in the largest 
 cities, such as New York, Chicago, Philadelphia, St. Louis and 
 Boston. 
 
 In some intermediate sized cities, such as Cleveland and 
 Milwaukee, they have been generally installed. 
 
 The best evidence of their effect in these and other smaller 
 cities, is a comparison of water consumption before and after 
 they have been generally installed. 
 
 Years 
 
 MILWAUKEE. 1892. 1909. 
 
 Population.167,700 365,000 
 
 Total number of service pipes. 12,212 61,589 
 
 Total number of meters. 871 51,120 
 
 Per cent of services metered. 7.1 83.0 
 
 Number of service pipes per 1,000 of popula¬ 
 tion . 73 169 
 
 Daily average consumption of water, thou¬ 
 sands of gallons. 17,900 36,100 
 
 Daily average consumption of water per capita 
 
 gallons . 106 99 
 
 Daily average measured through meters per 
 
 capita gallons. 59 
 
 Daily average consumption of water per ser¬ 
 vice gallons. 1,464 586 
 
 In seeking for the effect of meters in Milwaukee, it will be 
 observed that though only 7.1 per cent of the services were 
 metered in 1892 as against 83 per cent in 1909, there has been 
 but a small decrease in the water consumed per capita, while 
 under nominal conditions with meters there should have been 
 a reduction of nearly one-half. 
 
 This is accounted for by the fact that in 1892 there were' 
 only 73 services for 1,000 of population, and a consumption of 
 464 gallons of water per service, while in 1909 there were 169 
 services per 1,000 of population, and a consumption of only 586 
 gallons of water per service. This indicates that if there had 
 been as many services for 1,000 of population in 1892 as in 1909, 
 the amount of water per capita in 1892 would have been at least 
 twice what it was, or to express it in another way, if meters had 
 
 54 
 
not been introduced, it is probable that the consumption of 
 water in 1909, instead of being but 99 per capita, would have 
 been in the neighborhood of 200 gallons per capita. 
 
 ears 
 
 CLEVELAND. 1901. 1908. 
 
 Population .411,200 519,000 
 
 Total number of service pipes. 55,130 74,490 
 
 Total number of meters. 3,540 69,733 
 
 Per cent of services metered. 6.4 93.6 
 
 Number of services per 1,000 of population. .. 134 143 
 
 Daily average consumption of water, thou¬ 
 sands of gallons. 69,600 52,000 
 
 Daily average consumption of water per capita 
 
 gallons . 169 100 
 
 Daily average measured by meters, per capita 
 
 gallons . 77 
 
 Daily average consumption of water per ser¬ 
 vice gallons. 1,263 698 
 
 As will be observed in the case of Cleveland, the effect of 
 meters is clearly marked. A reduction in consumption of 69 
 gallons per capita or nearly 41 per cent having occurred in seven 
 years, notwithstanding the fact that the number of services per 
 1,000 of population has increased but slightly. 
 
 The apparent difference between Cleveland and Milwaukee 
 in this regard is obviously due to the fact that the Cleveland 1 
 plant was 48 years old in 1901, and hence had developed its busi¬ 
 ness nearly in proportion to the size of the city at that time, 
 while the Milwaukee plant was but 18 years old in 1892 and had 
 not developed its business in such proportion. 
 
 In the latter case the development of business in proportion 
 to population was in progress while meters were being intro¬ 
 duced, while in the former this was true in only a minor degree. 
 
 Y ears 
 
 COLUMBUS, OHIO. 1900. 1907. 
 
 Population .125,560 164,700 
 
 Total number of service pipes. 14,556 24,975 
 
 Total number of meters. 4,656 19,016 
 
 Per cent of services metered. 10.2 76.5 
 
 Number of services per 1,000 population. 116 134 
 
 Daily average consumption of water, thou¬ 
 sands of gallons . 24,400 16,300 
 
 Daily average consumption of water per capita 
 
 gallons . 194 99 
 
 Daily average measured by meters per capita 
 
 gallons . 
 
 Daily average consumption of water per ser¬ 
 vice gallons. 1,676 652 
 
 55 
 
Columbus shows a reduction in seven years in the per capita 
 consumption of 95 gallons, or over 49.0 per cent, notwithstand¬ 
 ing the fact that there was considerable development of busi¬ 
 ness relative to population occurring while meters were being- 
 
 introduced. 
 
 y £3,rs 
 
 MINNEAPOLIS. 1904. 1908. 
 
 Population .250,120 297,400 
 
 Total number of service pipes. 26,444 33,500 
 
 Total number of meters. 11,044 25,493 
 
 Per cent of services metered. 41.7 76.1 
 
 Number of services per 1,000 of population.. 106 113 
 
 Daily average consumption of water, thou¬ 
 sands of gallons . 19,400 17,800 
 
 Daily average consumption of water per capita 
 
 gallons . 73 60 
 
 Daily average measured by meters per capita 
 
 gallons . 21 32 
 
 Daily average consumption of water per ser¬ 
 vice gallons. 694 521 
 
 For an American city, Minneapolis has a small number of 
 service pipes per 1,000 of population in both years compared, 
 which partly accounts for the comparatively low water consump¬ 
 
 tion per capita. Meters must be given credit for a considerable 
 part of it, however. 
 
 Y g^rs 
 
 ST. PAUL. 1896. 1909. 
 
 Population .151,100 209,560 
 
 Total number of service pipes . 14,792 28,062 
 
 Total number of meters. 1,546 13,628 
 
 Per cent of services metered. 10.5 48.06 
 
 Number of services per 1,000 of population. . 97 134 
 
 Daily average consumption of water, thou¬ 
 sands of gallons. 8,600 11,700 
 
 Daily average consumption of water per capita 
 
 gallons . 57 56 
 
 Daily average measured by meters per capita 
 
 gallons . 10 19 
 
 Daily average consumption of water per ser¬ 
 vice gallons. 583 417 
 
 The effect of meters in keeping down water consumption 
 in St. Paul is shown by the fact that the water used per capita 
 remained practically stationary for three years, during which 
 time the number of services per 1,000 of population was in¬ 
 creased more than one-third, the metered service in 1909 being 
 less than 50 per cent. 
 
 56 
 
Y Gcirs 
 
 LOWELL, MASS. 1898. 1909. 
 
 Population . 91,500 95,100 
 
 Total number of service pipes. 10,396 12,307 
 
 Total number of meters. 4,865 9,465 
 
 Per cent of services metered. 46.9 76.9 
 
 Number of services per 1,000 of population... 113 129 
 
 Daily average consumption of water, thou¬ 
 sands of gallons. 6,700 5,200 
 
 Daily average consumption of water per capita 
 
 gallons . 73 55 
 
 Daily average measured by meters per capita 
 
 gallons . 20 28 
 
 Daily average consumption of water per ser¬ 
 vice gallons. 644 426 
 
 The effect of meters is very marked in Lowell, as a material 
 reduction in the water consumed per capita has taken place, 
 while a material increase of services per 1,000 of population was 
 
 occurring. 
 
 Y ears 
 
 FALL RIVER, MASS. 1880. 1909. 
 
 Population . 48,900 106,400 
 
 Total number of service pipes. 2,685 8,216 
 
 Total number of meters. 1,583 8,197 
 
 Per cent of services metered. 59 98.5 
 
 Number of services per 1,000 of population.. 55 78 
 
 Daily average consumption of water, thou¬ 
 sands of gallons. 1,400 5,300 
 
 Daily average consumption of water per capita 
 
 gallons . 28 50 
 
 Daily average measured by meters per capita 
 
 gallons . 24.5 
 
 Daily average consumption of water per ser¬ 
 vice gallons. 508 642 
 
 Fall River is an example of a city that used meters in con¬ 
 siderable numbers from the beginning. In 1874, the first year 
 of operation, there were 7.5 per cent of the services metered, 
 and in 1876, the third year of operation, there were 35 per cent 
 of the services metered. 
 
 In 1880 the business of the plant was in an undeveloped 
 state, and there were very few services to each 1,000 population, 
 hence the low consumption per capita. 
 
 By 1909 the number of services per 1,000 of population had 
 increased 42 per cent, but still remains at the extremely low 
 number of 78, which represents about 12.9 of population to the 
 service. 
 
 57 
 
The low consumption per capita which has always obtained 
 in Fall River, considering that it is a large manufacturing city, 
 is not altogether due to meters. A considerable part of it must 
 be ascribed to the large number of consumers for each service 
 
 pipe. 
 
 Years 
 
 MADISON, WIS. 1890. 1908. 
 
 Population . 13,246 27,610 
 
 Total number of service pipes. 1,355 4,601 
 
 Total number of meters. 441 4,538 
 
 Per cent of services metered. 32.5 98.6 
 
 Number of services per 1,000 of population. . . 102 166 
 
 Daily average consumption of water, thou¬ 
 sands of gallons. 520 1,700 
 
 Daily average consumption of water per capita 
 
 gallons . 38 61 
 
 Daily average measured by meters per capita 
 
 gallons . 26 
 
 Daily average consumption of water per ser¬ 
 vice gallons. 384 368 
 
 Madison shows a low consumption of water per capita, par¬ 
 ticularly in 1890, considering there were 102 service pipes per 
 1,000 of population. 
 
 And considering the character of the city, with thousands of 
 inhabitants attending the university that do not appear in the 
 census returns, the consumption per capita in 1908 shows the 
 effect of meters in keeping it down. 
 
 This case furnishes a marked example of the effect of an 
 increase of services per 1,000 of population to carry with it in¬ 
 creased rate of consumption per capita. 
 
 Here the services per 1,000 of population grew in eighteen 
 years nearly 63 per cent, in spite of which and in spite of a large 
 percentage increase of meters relative to service pipes, the water 
 consumption per capita was 60 per cent greater in 1908 than in 
 1890. 
 
 The foregoing eight cities comprise all at present available 
 that permit of a comparison of the progressive effect of meters 
 on the consumption of water. Other data, however, confirms 
 and reinforces the results shown. 
 
 A comparison of Cleveland and Milwaukee with other lake 
 cities, as to the water used per capita, and the per cent of meters 
 in use, is very significant. 
 
 58 
 
Per Cent Daily Av, 
 of Services Gallons 
 
 City. 
 
 Year. 
 
 Population. 
 
 Metered. Per 
 
 Cap 
 
 Cleveland . 
 
 .1908 
 
 519,000 
 
 93.6 
 
 100 
 
 Milwaukee .... 
 
 .1909 
 
 365,000 
 
 83.0 
 
 99 
 
 Chicago . 
 
 .1908 
 
 2,050,000 
 
 3.9 
 
 228 
 
 Detroit . 
 
 .1908 
 
 430,000 
 
 9.0 
 
 180 
 
 Buffalo . 
 
 .1909 
 
 467,000 
 
 4.0 
 
 323 
 
 Erie . 
 
 .1908 
 
 63,600 
 
 2.3 
 
 200 
 
 Saginaw . 
 
 .1908 
 
 50,000 
 
 4.5 
 
 177 
 
 When it is considered that Cleveland and Milwaukee are 
 large manufacturing cities, certainly as much so in proportion to 
 population as Detroit and Buffalo, it is fair to conclude that their 
 consumption of water would have been twice what it is, if meters 
 had only been used for say, 4 per cent of the services. 
 
 APPLICATION OF METERS TO PEORIA WATER 
 
 WORKS. 
 
 As has been seen, the average daily consumption of water 
 at Peoria was 7,435,000 gallons per day for the year ending June 
 30, 1910, or 102 gallons per capita per day, allowing 73,000 as 
 the population of the city and adjacent villages supplied with 
 water. 
 
 The services January 1, 1910, were.10,239 
 
 Meters in use. 371 
 
 Per cent of services metered. 3.6 
 
 Number of services per 1,000 of population. 142 
 
 Experience shows that cities of the class of Peoria, if sup¬ 
 plied with a full quota of water mains, with its business well de¬ 
 veloped, would have on an average probably 170 or more services 
 per 1,000 population, and with the present relative amount of 
 meters the consumption would have been greater than 102 gal¬ 
 lons per capita. 
 
 The question is, what consumption per capita would Peoria 
 have had if it had been generally metered? And what is it 
 likely to have in the future if meters should be installed? 
 
 The Des Moines, Iowa, water plant, owned by a public ser¬ 
 vice company, has 139 miles of street mains, and on January 1, 
 1910, had 13,906 service pipes and 13,008 meters, giving 93.5 per 
 cent of metered services. The consumption of water was 52 gal¬ 
 lons per capita for the year 1909, with an estimated population 
 of 86,415. On a corrected estimate based on the 1910 census, it 
 was 54 gallons per capita. 
 
 59 
 
The water is furnished to the city with about the same 
 pressure as at Peoria. 
 
 In the report on the New York supply made to Bird S. Coler, 
 Comptroller, by John R. Freeman, in March, 1900, such data 
 with relation to the effe'ct of the use of meters on the consump¬ 
 tion of water as was then available, was collected and analyzed. 
 From this data a curve was constructed which was intended to 
 represent the mean consumption of water per capita wdth vary¬ 
 ing ratios existing between the number of meters installed and 
 the number of service pipes. The second column in the follow¬ 
 ing table represents the gallons per capita per day taken from 
 Freeman’s curve, while the third is intended to be applicable to 
 Peoria, after mains have been extended: 
 
 jnt of Metered 
 
 Gallons per 
 
 Estimated Gallons 
 per Capita per 
 
 Services. 
 
 Capita Daily. 
 
 Day, Peoria. 
 
 0 
 
 250 
 
 155 
 
 2.5 
 
 180 
 
 135 
 
 5.0 
 
 150 
 
 120 
 
 7.5 
 
 130 
 
 112 
 
 10.0 
 
 115 
 
 105 
 
 15.0 
 
 100 
 
 98 
 
 20.0 
 
 90 
 
 94 
 
 25.0 
 
 82 
 
 90 
 
 30.0 
 
 78 
 
 86 
 
 40.0 
 
 70 
 
 81 
 
 50.0 
 
 65 
 
 78 
 
 60.0 
 
 62 
 
 74 
 
 75.0 
 
 58 
 
 70 
 
 90.0 
 
 56 
 
 67 
 
 100.0 
 
 55 
 
 65 
 
 The Freeman curve can only be expected to represent the 
 law of variation in a general w r ay, and is very little aid in de¬ 
 termining the water consumption in any particular case. 
 
 As has been seen, the meters in use in Peoria are 3.6 per 
 cent of the total number of services. This would represent a 
 consumption of about 160 gallons per capita by the Freeman 
 curve, but, as a matter of fact, the consumption is only 102 gal¬ 
 lons per capita. 
 
 If the water service w^as developed to the amount of 170 
 services or more to 1,000 of population, the present consumption, 
 instead of being 102 gallons, might have been at least 125 gal¬ 
 lons per capita. 
 
 Making all the comparisons possible with the foregoing data, 
 and particularly comparing with Des Moines, where the con¬ 
 sumption was 54 gallons per capita in 1909, on a population cor- 
 
 60 
 
rected for the 1910 census, it is believed that if the Peoria works 
 were now metered to the extent of 95 per cent of the services that 
 the consumption would not have exceeded 60 gallons per capita 
 per day, and that after the mileage of street mains is brought 
 up to 132 and the business well developed, that the consump¬ 
 tion is not likely to exceed 65 gallons per capita per day under a 
 condition of 100 per cent of services metered. 
 
 In the third column of the foregoing table, giving the rela¬ 
 tion between the per cent of services metered and the consump¬ 
 tion of water per capita per day, is an estimate of this relation 
 for the Peoria Water Works based upon the meter data col¬ 
 lected, which is intended to apply to Peoria after its business 
 shall have been developed commensurately with a distribution 
 system of not less that 132 miles of street mains, and with ap¬ 
 proximately 170 services per 1,000 of population. 
 
 On the basis of the relation shown, the following table gives 
 the population it is possible to serve, and the year when an aver¬ 
 age available supply of 6,500,000 gallons of water per day will 
 be exhausted: 
 
 Per cent of Services 
 Metered. 
 
 25 
 
 50 
 
 75 
 
 100 
 
 Year When 
 
 Population Which 
 
 Present Supply 
 
 Can be Served. 
 
 Will be Exhausted 
 
 72,200 
 
 1911 
 
 83,300 
 
 1917 
 
 93,000 
 
 1924 
 
 100,000 
 
 1930 
 
 The limit of the present daily supply is fixed at 6,500,000 
 gallons per day to guard against a year of excessive drought. 
 
 The actual average daily consumption for the year ending 
 June 30, 1910, was 7,435,000 gallons, and for the year ending 
 December 31, 1910, it is likely to be over 7,500,000 gallons. The 
 maximum daily consumption for the year being probably that 
 of July 9, when it reached 12,458,000 gallons. 
 
 A new well will be put into operation soon, which is likely 
 to increase the supply for such a year as the present one, in ex¬ 
 cess of 500,000 gallons, bringing the total daily average supply 
 to more than 8,000,000 gallons. 
 
 In using 6,500,000 average daily supply for a year of drought 
 a 20 per cent reduction is made over such a year as the present 
 one. 
 
 For these reasons and because the water consumption is in¬ 
 creasing rapidly at present, being 20 per cent greater per capita 
 for the year ending June 30, 1910, than it was one and one-half 
 years earlier, there seems to be no question that meters should 
 be applied promptly and universally in Peoria. 
 
 The special conditions affecting the water supply seem to 
 render this policy imperative. 
 
 61 
 
COST OF INSTALLING AND MAINTAINING METERS. 
 
 In 1904 Edward W. Bemis, Superintendent of the Cleveland 
 Water Works, in a paper before the American Water Works 
 Association, gave the experience in Cleveland in setting and 
 maintaining meters as follows : 
 
 Total number ^-inch meters set to date, 13,407. 
 
 Average cost of meters and connections.$ 6.50 
 
 Average cost of setting, including vaults and basins. 6.87 
 
 Total in place.$13.37 
 
 Average cost of maintenance: 
 
 Reading and clerical work.$ 1.10 
 
 Repairs .10 
 
 Interest and depreciation, 8 per cent on $13.37. 1.07 
 
 Total maintenance ...$ 2.27 
 
 Data contained in the report of the Cleveland Water De¬ 
 partment for 1908, shows that the average cost of setting 64,148 
 ^-inch meters to that date, and the cost of maintaining them for 
 
 the year 1908 was as follows: 
 
 Average cost of meters and connections.. . .$ 6.49 
 
 Average cost of setting, including vaults and basins. 8 75 
 
 Total in place .$15.24 
 
 Average cost of maintenance, 1908: 
 
 Reading .$ .57 
 
 Repairs .11 
 
 Interest and depreciation, 8 per cent on $15.24. 1.22 
 
 Total maintenance .$ 1.90 
 
 No clerical work other than the mere reading of the meters 
 is included in the maintenance account for 1908. 
 
 Considering this data as a whole, it is fair to take the cost 
 of maintaining ^-inch meters in Cleveland at $2.00 per meter per 
 annum. 
 
 In the report on the New York water supply hereinbefore 
 referred to, John R. Freeman estimates the cost of furnishing 
 and setting meters for that city, with a force of men working 
 
 systematically, for domestic sizes ^ and ^-inch, at.$12.50 
 
 Average cost all sizes.15.00 
 
 Cost of maintenance all sizes, including interest, $2.50 per 
 meter per annum. 
 
 62 
 
This estimate is not very different from the Cleveland ex¬ 
 perience. 
 
 In Cleveland they use many large brick basins outside of the 
 houses, which makes the cost of setting much higher than it; 
 would otherwise be. 
 
 Peoria would doubtless get along with less expensive 
 housing for the meters, so that the cost of installation would 
 probably be less than in Cleveland. On the other hand, the 
 reading and clerical work, and the repairs, are likely to be some¬ 
 what higher in Peoria than for Cleveland. 
 
 A safe price for Peoria is believed to be $12.50 for setting 
 all sized, and $2.00 per annum to cover all expense of reading, 
 repairs, renewals and interest. 
 
 REASONABLE RATES. 
 
 Under the head of returns, the conclusion was reached that 
 7 per cent per annum on the proper investment value of the plant 
 would be a minimum to allow for interest and profits, or more 
 properly, interest and compensation for use of capital and ser¬ 
 vices in caring for the capital, and the risks incurred in the 
 conduct of the business. 
 
 It has also been determined that the fair value of the prop¬ 
 erty of the Peoria Water Works Company as of January 1, 1909, 
 was $2,150,000. 
 
 This brings us to the concrete problem of reasonable rates, 
 as specifically applied to the Peoria Water Works. There are 
 four phases to this question; 
 
 1. As to whether the earnings of the Company as a whole 
 yield an excessive profit, considered with reference to the invest¬ 
 ment and the operating charges, and as compared with the cost 
 incurred my municipalities which furnish their own supply. 
 
 2. As to matters of fair rate adjustment between private 
 consumers, and the proper proportion of the whole revenue 
 which should be derived from private sources, compared with 
 that paid by the municipality for public service. 
 
 3. As to questions of reasonableness to the consumer, 
 viewed abstractly, and as compared with the cost of individual 
 service in other cities, but without regard to the amount of the 
 investment and cost of operation. 
 
 4. As to reasonableness of the Peoria rate ordinance, as 
 affecting the income of the Company if applied literally. 
 
 The first phase of the question is best covered by a com¬ 
 parison between the revenue of the Company and the operating 
 expenses plus the proper return, as follows: 
 
 63 
 
Revenue for Year Ending December 31, 1908. 
 
 Revenue from city .$ 47,470 
 
 Revenue from private sources. 177,538 $225,008 
 
 Expenses and Fixed Charges. 
 
 Operating expenses, 1908, exclusive of taxes 
 and depreciation, and reduced $8,016 be¬ 
 cause of unusual contingent expenses.$ 75,600 
 
 Depreciation being that annual sum which 
 placed at compound interest at 4 per cent 
 
 equals $1,950,000 in 46 years . 15,000 
 
 Taxes . 15,000 
 
 Returns, being 7 per cent for interest, ad- 
 
 Defieiency .$ 31,092 
 
 This showing is on the plant as it existed on Janu¬ 
 ary 1, 1909. Since that time considerable money has been ex¬ 
 pended in extensions of water mains and improvements at the 
 pumping station. Just how much is not known. 
 
 As appears under the head of “needed improvements,” there 
 should be expended $570,000, more or less, upon the water plant, 
 within the next three years. 
 
 There are other tests that can be profitably applied to de¬ 
 termine whether the earnings of the company as a whole a r e 
 excessive, and as to whether the city is being better or worse 
 served with a public service corporation than other cities who 
 operate their own plants. 
 
 Appendix I is a tabulation of the operating and investment 
 data of thirty-nine water works plants owned and operated by 
 municipalities that are supplied by pumps, in cities that range 
 from approximately 25,000 population to 240,000 population. 
 The average population being 85,000 per city, as compared with 
 73,000 population served by the Peoria water works. 
 
 The following table contains the consolidated mean operat¬ 
 ing data of these thirty-nine water works plants compared with 
 the Peoria water works plant. 
 
 64 
 
Means and Means and 
 Averages Averages 
 of the Peo. of 39 Mun- 
 Water Wks icipal 
 Plant Dec. Water Wks 
 31, 1908 Plants 
 
 Age of plant in years . 17 33 
 
 Population . 70,120 84,995 
 
 Water pumped, millions of gallons per annum 2,171 2,924 
 
 Gallons, per capita, per day. 84 94 
 
 Head on pumps in feet. 315 212 
 
 Miles of street mains. 99.3 133 6 
 
 Number of services .. 9,040 12,760 
 
 Number of meters . 288 6,832 
 
 Total investment.2,150,000 2,435,582 
 
 Investment per mile of mains. 21,651 18,226 
 
 Investment per capita . 31 28 
 
 Private revenue, annual. 177,538 205,073 
 
 Private revenue per service. 20 16 
 
 Private revenue per capita. 2.53 2.41 
 
 Operating expenses, without taxes. 75,600 79,172 
 
 Operating expenses, per cent of revenue. 42 38 
 
 Cost to city of public service, $47,500 hydrant 
 
 rental less $15,570 taxes, equal. 31,930 
 
 Cost to cities of public service, 6 per cent on 
 $2,435,582 is $146,135, plus $79,172 operat¬ 
 ing expenses, less private income $205,073, 
 
 equal . 20,234 
 
 Cost to city for public and private service. . . 209,468 225,207 
 
 Cost to city for public and private service 
 per capita . 2.99 2.65 
 
 In stating the cost of public service to the city of Peoria 
 the taxes paid by the Water Company are deducted from 
 hydrant rental, on the theory that this is necessary to compare 
 with municipal plants, upon which no taxes are paid. 
 
 To obtain the cost of public service rendered by the munic¬ 
 ipal plants, 6 per cent has been allowed on the investment, to 
 cover interest, depreciation and renewals, as also any expenses 
 which are incurred by the cities in connection with the water 
 works, that does not appear in the operating expenses. 
 
 When it is considered that the Peoria water plant has lagged 
 behind in the amount of pipe mileage, that it pumps the water 
 twice, and to a total height averaging 50 per cent greater than 
 the plants with which it is compared, and that in comparing the 
 cost of the service for the thirty-nine plants only 6 per cent, in¬ 
 cluding depreciation, interest and contingencies have been 
 charged, the comparison is favorable to the Peoria plant. With 
 municipal plants the consumer almost invariably pays for ser¬ 
 vices, and generally meters. If these outlays in construction 
 
 65 
 
were added it would bring the investment for the municipal 
 plants to over $32 per capita. 
 
 Such detail comparisons of individual plants operating- 
 under varying conditions of water supply, prices of fuel and 
 material, and having different rate schedules, may be often mis¬ 
 leading and seldom conclusive. But they are always interesting 
 and instructive, and if the investigation has been given sufficient 
 scope and covers a sufficiently wide field, conclusions of great 
 value can be drawn. 
 
 They are desirable as tending to discover some standard by 
 which the fairness of the income of a plant can be approximately 
 determined in advance, and serve as a steadying and standardiz¬ 
 ing element in matters of this kind. 
 
 THE SECOND PHASE OF THE QUESTION of fair rates 
 is important only as it may affect some new schedule which it 
 may be proposed to adopt, and in aiding in the proper adjustment 
 of revenue from private sources, and from the city. Speaking 
 generally, it is believed that the proportion paid by the city at 
 the present time is as nearly equitable as any that can be desig¬ 
 nated. 
 
 As between private consumers there are two cases of dis¬ 
 crimination which appear plainly on the face of the analysis 
 made by the Pratt Company. 
 
 One is the free list. 
 
 It appears that in accordance with the provisions of the 
 franchise, free water is furnished to a large number of public and 
 private institutions. In a new schedule of rates this free list 
 should be abolished, and the service put on a reasonably paying 
 basis. 
 
 Appendix VI is a list of institutions, public and private, that 
 pay no revenue. The Company’s estimate of the amount and 
 value of the water consumed per annum, at present meter rates, 
 is given as $14,000 a year. 
 
 On a properly adjusted scale of rates, there is little doubt 
 but what this free supply would amount to considerably more 
 than that sum. While such a free list prevails, the lowest rates 
 cannot be looked for by private consumers. 
 
 If one set of consumers get their water free, another set 
 must eventually bear the expense, or it must be done by the city 
 in its official capacity. 
 
 Another apparent discrimination is in the case of 198 resi¬ 
 dences furnished through meters. By the showing of the auditor 
 the income from these residences that are metered, if put on the 
 flat fixture rate basis, would be $6,360, while as a matter of fact, 
 they are only paying about $2,970, the differences being the 
 measure of the advantage which these few resident owners de¬ 
 rive which is not participated in by the householders generally. 
 
 66 
 
The data is not at hand to show whether other cases of un¬ 
 fairness between private owners exist or not. 
 
 The income of $33,642 derived from 173 metered business 
 establishments was not analyzed by the auditor, so that ques¬ 
 tions of discrimination in this list cannot be raised, if they exist. 
 
 During the year 1908 the water sold through meters in the 
 business establishments then having meters was 425,101,845 gal¬ 
 lons, or an average of 1,164,000 gallons per day. The total met¬ 
 ered water for that year, including 191 residences, was 439,- 
 678,000 gallons, an average of 1,204,600 gallons per day. 
 
 It is not important that questions of unjust and unequal 
 rates should be extensively gone into, if the purpose of this in¬ 
 vestigation bears fruit in a new schedule and new regulations. 
 
 THE THIRD PHASE OF THE QUESTION of reasonable 
 rates involves an inquiry into the rates and amounts paid by in¬ 
 dividual consumers. 
 
 The audit of the rating cards made by Edward A. Pratt & 
 Co., show that the Company’s domestic service consists of sup¬ 
 plying water to 8,394 residences, which are classified as follows: 
 
 748 residences paying an average of $4.00 per annum. 
 
 715 residences paying an average of $5.00 per annum. 
 
 544 residences paying an average of $6.00 per annum. 
 
 1,110 residences paying from $6.01 to $10.00 per annum. 
 
 1,947 residences paying from $10.01 to $15.00 per annum. 
 
 1,219 residences paying from $15.01 to $20.00 per annum. 
 
 1,913 residences paying over $20.00 per annum. 
 
 198 residences with meters paying an average of $15.00 
 per annum. 
 
 Same 198 residences at fixture rates would pay an 
 
 average of $32.00 per annum. 
 
 8,394 residences all at flat fixture rates would pay an aver¬ 
 age of $14.69, or a total of $123,307. 
 
 The average number of rooms charged for in the 8,394 resi¬ 
 dences is 6.42. 
 
 In a paper presented to the American Water Works Associa¬ 
 tion, 1908 meeting, on water rates charges in 375 cities, D. R. 
 Gwinn gives the leading detail domestic fixture rates for 162 
 privately owned water works plants, and 213 publicly owner 
 water works plants. 
 
 The rates given cover baths, water closets, wash basins, 
 sprinklers, and the basic charge for a 6-room house, 5 persons, 
 or first faucet. Also the maximum and minimum meter rates. 
 
 Accompanying these tables is a summary of the averages for 
 each group. These averages omitting meter rates are given in the 
 following table with the corresponding Peoria rates. 
 
 67 
 
Summary of Average Fixture Water Rates for 375 City Plants, 
 
 Compared With Peoria Rates. 
 
 
 
 162 
 
 213 
 
 
 
 Privately 
 
 Publiclv 
 
 ✓ 
 
 
 Peoria 
 
 Owned 
 
 Owned 
 
 
 Plant. 
 
 Plants. 
 
 Plants. 
 
 Domestic use in 6-room house, or 5 
 
 
 
 
 persons, or first faucet. 
 
 $ 6.00 
 
 $ 6.83 
 
 $ 6.04 
 
 Bath additional. 
 
 3.00 
 
 3.88 
 
 2.99 
 
 Water closet additional. 
 
 3.00 
 
 3.69 
 
 3.12 
 
 Wash basin additional. 
 
 1.50 
 
 1.94 
 
 1.55 
 
 Sprinkler for lot 50x140 feet, not in- 
 
 
 
 
 eluding street and sidewalk 
 front . 
 
 in 
 
 6.17 
 
 4.37 
 
 Sprinkler for lot 50-140 feet, includ- 
 
 • 
 
 
 
 ing street and sidewalk in front. . 
 
 6.00 
 
 
 
 
 $19.50 
 
 $22.51 
 
 $18.07 
 
 Average population (1900) . 
 
 56,100 
 
 25,437 
 
 85,382 
 
 When it is considered that the larger 
 
 the city, 
 
 everything 
 
 else being equal, the less the rate should be, and the 
 
 less it gen- 
 
 erally is, the rates for the 162 privately owned plants do not? 
 average out of proportion to the 213 publicly owned plants. The 
 average population of the latter group being more than three 
 times the population of the first group. 
 
 Giving consideration to the same factors, the Peoria rates 
 are seen to be about the same as for the municipal plants and 
 less than for the private plants. 
 
 The group of cities having municipal plants given in the 
 . paper referred to, contains nearly all the cities found in Ap¬ 
 pendix 1. And since these cities have been used for a compar¬ 
 ison in a broader way, it is instructive to compare them with 
 Peoria inv the matter of rates in the same manner as the fore¬ 
 going 375 cities. The fixture rates for only 31 of the 39 cities 
 referred to are available, so the following table contains details 
 and averages of this number only. 
 
 A summary of averages is given at the foot of the table and 
 compared with Peoria on the basis of populations corresponding 
 to the dates in Appendix I, for the 31 cities, and with 1910 for 
 Peoria. 
 
 68 
 
Table of Fixture Rates of Thirty-One Municipal Water Works 
 
 Plants compared with Peoria. 
 
 CITIES 
 
 Domestic use 
 
 6 rooms or 
 
 5 persons or 
 
 1 faucet 
 
 Bath 
 hot and 
 cold • 
 
 Water 
 
 Closet 
 
 Basin 
 
 Sprinkling 
 
 50ft.xl50ft. lot 
 
 and street 
 
 Total 
 
 
 Louisville, Ky. 
 
 $4.80 
 
 $4.00 
 
 $2.40 
 
 $ .80 
 
 $6.00 
 
 $18.00 
 
 
 Kansas City, Mo.. . . 
 
 5.05 
 
 3.90 
 
 3.70 
 
 
 7.50 
 
 20.15 
 
 
 Providence, R. I. 
 
 6.00 
 
 5.00 
 
 5.00 
 
 2.00 
 
 5.00 
 
 23.00 
 
 • 
 
 St Paul, Minn. 
 
 4.00 
 
 2.00 
 
 3.00 
 
 
 3.00 
 
 12.00 
 
 
 Columbus. Ohio. 
 
 5.00 
 
 5.00 
 
 4.00 
 
 
 5.00 
 
 19.00 
 
 
 Memohis. Tenn. 
 
 6.00 
 
 5.00 
 
 5.00 
 
 
 10.00 
 
 26.00 
 
 
 Richmond, Va. 
 
 5.00 
 
 3.50 
 
 3.00 
 
 1.50 
 
 9.60 
 
 22.60 
 
 
 Dayton, Ohio. 
 
 4.00 
 
 2.00 
 
 2.50 
 
 2.00 
 
 5.00 
 
 15.50 
 
 
 Nashville, Tenn. 
 
 9.00 
 
 4.00 
 
 5.00 
 
 
 2.31 
 
 20.31 
 
 
 Fall River, Mass.. . . 
 
 5.00 
 
 5.00 
 
 5.00 
 
 2.50 
 
 6.00 
 
 23.50 
 
 
 Grand Rapids, Mich. 
 
 5.00 
 
 2.00 
 
 4.00 
 
 
 5.00 
 
 16.00 
 
 
 Lowell, Mass. 
 
 6.00 
 
 3.00 
 
 4.00 
 
 1.00 
 
 3.00 
 
 17.00 
 
 
 Wilmington, Del. 
 
 5.00 
 
 3.00 
 
 2.00 
 
 1.00 
 
 5.00 
 
 16.00 
 
 
 Lynn, Mass. 
 
 5.00 
 
 3.00 
 
 3.00 
 
 1.00 
 
 4.00 
 
 16.00 
 
 
 New Bedford, Mass.. 
 
 2.50 
 
 2.50 
 
 2.50 
 
 1.25 
 
 2.50 
 
 11.25 
 
 
 Lawrance, Mass. 
 
 5.00 
 
 3.00 
 
 4.00 
 
 
 3.75 
 
 15.75 
 
 
 Houston. Tex. 
 
 12.00 
 
 3.00 
 
 6.00 
 
 3.00 
 
 
 24.00 
 
 
 Manchester, N. H.. . 
 
 4.50 
 
 2.00 
 
 2.50 
 
 .75 
 
 5.00 
 
 14.75 
 
 
 Erie, Pa. 
 
 4.00 
 
 3.00 
 
 3.00 
 
 1.00 
 
 3.45 
 
 14.45 
 
 S Mostly 
 
 Brockton, Mass. 
 
 5.00 
 
 4.00 
 
 4.00 
 
 1.50 
 
 
 
 Harrisburg, Pa. 
 
 8.00 
 
 4.00 
 
 4.00 
 
 2.50 
 
 4.00 
 
 22.50 
 
 ( metered 
 
 Ft. Wayne, Ind. 
 
 4.40 
 
 3.20 
 
 2.40 
 
 
 2.40 
 
 12.40 
 
 
 Allentown, Pa. 
 
 3.75 
 
 1.25 
 
 2.00 
 
 
 2.00 
 
 9.00 
 
 
 Saginaw, Mich. 
 
 7.00 
 
 2.00 
 
 3.00 
 
 
 3.00 
 
 15.00 
 
 
 McKeesport, Pa. 
 
 8.00 
 
 7.50 
 
 7.50 
 
 
 8.00 
 
 31.00 
 
 
 Binghampton, N._ Y. 
 
 3.00 
 
 3.00 
 
 3.00 
 
 1.00 
 
 3.00 
 
 13.00 
 
 
 Topeka, Kan. 
 
 6.00 
 
 5.00 
 
 3.00 
 
 
 7.50 
 
 21.50 
 
 
 Rockford, Ill. 
 
 5.00 
 
 2.00 
 
 2.50 
 
 
 5.00 
 
 14.50 
 
 
 Taunton, Mass. 
 
 5.00 
 
 3.00 
 
 5.00 
 
 2.00 
 
 5.00 
 
 20.00 
 
 
 Waltham, Mass. 
 
 5.00 
 
 2.00 
 
 3.00 
 
 1.00 
 
 6.00 
 
 17.00 
 
 
 Poughkeepsie, N. Y.. 
 
 3.50 
 
 1.50 
 
 2.00 
 
 .75 
 
 5.00 
 
 12.75 
 
 
 Mean of 31 cities.. .. 
 
 $5.37 
 
 $3.30 
 
 $3.58 
 
 $1.48 
 
 $4.90 
 
 $18.63 
 
 93,484 Pop. 
 
 Peoria rates. 
 
 $6.00 
 
 $3.00 
 
 $3.00 
 
 $1.50 
 
 $6.00 
 
 $19.50 
 
 73,000 Pop. 
 
 It will be observed that considering differences of popula¬ 
 tion the rates at Peoria are as low as for the 31 cities contained 
 in the table. 
 
 The Peoria rate ordinance provides that the minimum fix¬ 
 ture rate for dwellings shall be $4.00. This should be con¬ 
 sidered in connection with the foregoing comparisons with 
 
 69 
 
other cities, which are on the basis of a six room house, which 
 is the minimum probably in the majority of cases. 
 
 The foregoing comparisons show that as relates to flat or 
 fixture rates, the private consumer has nothing to complain of, 
 and that these rates are reasonable viewed from any standpoint 
 personal to the consumer. 
 
 THE FOURTH PHASE OF THE SUBJECT relates to 
 the reasonableness of the water works ordinance as affecting the 
 income of the Company. 
 
 The Peoria ordinance provides, concerning meter rates, as 
 follows: 
 
 “When the daily consumption is 1,000 gallons or 
 less, the charge to be at the rate of 20 cents per 1,000 
 gallons.” 
 
 “When the daily consumption is more than 1,000 
 gallons, on the excess over 1,000 the charge to be at the 
 rate of 6 cents per thousand.” 
 
 The minimum meter rate for a single premises is $3.00. 
 
 As stated above, the 198 residences under meter, which are 
 among the largest in the city, are getting their water service 
 for about $2,970, which at the flat or fixture rate, would cost 
 $6,360, and it is pretty well settled that the fixture rate is none 
 too high. 
 
 If meters were generally applied under the present ordin¬ 
 ance the revenue from residences would be enormously reduced. 
 
 With a minimum rate of $3.00 many of the houses now pay¬ 
 ing from $4.00 up to probably $15.00, would be reduced to the 
 minimum revenue of $3.00 per annum, and the Company would 
 have the meters to maintain besides. 
 
 Many other houses would also sustain a large reduction, no 
 one can tell how much or how many, except as indicated by the 
 rates for the 198 houses now having meters. 
 
 If the Peoria plant had been completely on a meter basis in 
 1908, it is estimated that the average consumption would have 
 been 4,500,000 gallons per day approximately, or say 1,642,- 
 500,000 gallons per year. 
 
 The question is, what proportion of this water consumption 
 
 would have been measured, and sold, if the plant had been 
 metered 98 to 100 per cent? That is, stating it in reverse order, 
 what would have been the combined waste and unmeasured con¬ 
 sumption, compared with that measured? 
 
 There are many ways for water to disappear, or to ap¬ 
 parently disappear. 
 
 For the most part, the amount of water alleged to have 
 been consumed in water plants is ascertained by pump meas- 
 
 70 
 
urement. The amount reported may be based on pump dis¬ 
 placement, or on pump displacement less some assumed per¬ 
 centage allow for slip. 
 
 Either method introduces an unverified factor at the be¬ 
 ginning. 
 
 There may be, and generally is, a material quantity that 
 passes through the meters that is not recorded. Sometimes this 
 becomes a large item, amounting to several per cent. 
 
 Leaky street mains, and service pipes, particularly the latter, 
 are a fruitful cause of wastage. 
 
 In all cities a considerable quantity of- water is used in 
 flushing sewers, for watering troughs, sprinkling streets, flushing 
 hydrants, and mains, and other purposes, particularly in the 
 building trades, and for extinguishing fires. 
 
 Considering how variable these factors must necessarily be 
 in different cities, it is no wonder that there is a widely varying 
 ratio between the water metered and unmetered. 
 
 The following statement furnishes some information rela- 
 
 tive to the ratio 
 
 between the 
 
 total water 
 
 consumed 
 
 and that 
 
 which is recorded by meter for 
 
 a number of cities: 
 
 
 
 
 Daily con- 
 
 Per cent 
 
 Per cent 
 
 
 
 sumption of Services 
 
 of Water 
 
 
 Year. 
 
 Per Capita. 
 
 Metered. 
 
 Metered. 
 
 Yonkers, N. Y.... 
 
 .1908 
 
 101 
 
 100.0 
 
 51.2 
 
 Brockton, Mass. ., 
 
 .1909 
 
 36 
 
 99.2 
 
 72.2 
 
 Madison, Wis. 
 
 .1909 
 
 61 
 
 98.6 
 
 42.6 
 
 Fall River, Mass.. 
 
 .1909 
 
 50 
 
 98.5 
 
 49.0 
 
 Cleveland, Ohio. .. 
 
 .1908 
 
 100 
 
 93.6 
 
 77.0 
 
 Milwaukee, Wis... 
 
 .1909 
 
 99 
 
 83.0 
 
 60.0 
 
 Lowell, Mass. 
 
 .1909 
 
 55 
 
 76.9 
 
 50.9 
 
 Lowell, Mass. 
 
 .1898 
 
 73 
 
 46.9 
 
 27.4 
 
 Minneapolis, Minn 
 
 .1908 
 
 60 
 
 76.1 
 
 53.5 
 
 St. Paul, Minn. . . . 
 
 .1909 
 
 56 
 
 48.6 
 
 34.0 
 
 St. Paul, Minn. . . . 
 
 .1896 
 
 57 
 
 10.5 
 
 17.7 
 
 Detroit, Mich. 
 
 .1908 
 
 178 
 
 9.0 
 
 30.0 
 
 Buffalo, N. Y. 
 
 .1909 
 
 323 
 
 4.0 
 
 20.3 
 
 Peoria, Ill. 
 
 .1908 
 
 84 
 
 3.6 
 
 20.2 
 
 The great lack of uniformity of ratios for different cities 
 shows disturbing elements that make it practically impossible 
 to deduce any law which can be said to express the relation be¬ 
 tween the water measured by meters, and the total water con¬ 
 sumed, as compared with the number of services having meters 
 and the total number in use. Taking the five cities having over 
 90 per cent of the services metered, and obtaining a mean of 
 the ratios in each of the two columns of ratios, and it appears 
 
 71 
 
 \ 
 
that for a mean of 98 per cent of services metered, there is corres¬ 
 ponding mean of 54.4 per cent of water measured through meters 
 
 Yonkers, N. Y.; Fall River, Mass., and Madison, Wis., are 
 three cities with a high ratio of services metered, but with a low 
 ratio of water metered. 
 
 It is fair to assume that the amount of water supplied is in 
 error in these cases. 
 
 The record of water consumed in Peoria is believed to be 
 more carefully determined than is usual. Also the consumption 
 per capita is small for a city with so few meters. It is noticeable 
 that there is over 20 per cent of the water metered, while only 
 3.6 per cent of the services have meters. All these facts indicate 
 no unusual waste for an unmetered plant. 
 
 It is believed that it is safe to assume that if the plant was 
 metered, two thirds of the consumption would be measured 
 through the meters. 
 
 That is, for every two gallons measured and sold, three gal¬ 
 lons would have to be pumped, and that of the foregoing 1,642,- 
 500,000 gallons per year, only 1,095,000,000 gallons would have 
 been revenue producing. 
 
 The operating expenses for 1908, not including fixed charges, 
 but including taxes and depreciation, would be, allowing 9,000 
 meters at $2.00 per annum, about $123,000 per annum.' To pay 
 this will take approximately 12 cents per 1,000 gallons. 
 
 Less than one-half of these operating expenses would be 
 influenced by the amount of water pumped, so that it is safe to 
 say that if no additional investment should be needed, 5 cents 
 per 1,000 gallons would prevent an actual loss. But even 10 cents 
 per 1,000 gallons would contribute nothing to fixed charge, and 
 would not carry its full proportion of operating expenses. 
 
 An 8-cent minimum rate could only be defended in case 
 there was a large business which could be had for this rate, which 
 would be lost otherwise, and the Company had more water than 
 could be used by other consumers. 
 
 The 6-cent rate of the ordinance is entirely too low under 
 any condition. 
 
 Speaking generally, no water plant similar to the Peoria one 
 can operate on the meter rates as they stand in the ordinance, 
 hence they may be said to be not only unfair, but impossible. 
 
 72 
 
s 
 
 PROPOSED CHANGE OF WATER RATES. 
 
 In the foregoing discussion of reasonable rates, it has be¬ 
 come apparent that the fixture rates, or the so-called flat rates, of 
 the Peoria Water Works Ordinance, are not too high, and cannot 
 be considered unreasonable from any point of view. The con¬ 
 clusions with regard to the effect of meters on the consumption 
 of water, in view of the necessity that the Company faces, of 
 either curtailing the waste of water, or of increasing the supply, 
 has lead to the farther conclusion that the policy of putting all 
 the Company’s business on a meter basis should be adopted, and 
 the shift from flat or fixture rates, to meter rates, made as rapidly 
 as possible. 
 
 The final adoption of this policy, with the prompt application 
 of meters at a rate to put the whole city on the new basis by the 
 end of 1913, will do away for an indefinite period with the neces¬ 
 sity of an increase in the water supply, or of the pumping capac¬ 
 ity, except as relates to a duplicate equipment. 
 
 Such a program also renders a revision of the fixture rates 
 in the ordinance unnecessary, except as may relate to certain 
 deficiencies or omissions which experience has shown to exist. 
 Nor will a general reassessment, or relisting of the consumers be 
 necessary, except as it accompanies the proposed change to a 
 meter basis. 
 
 Notwithstanding the material and permanent advantages 
 which will undoubtedly be derived from the general adoption of 
 meters, the change cannot be made without danger to the revenue 
 of the Company, if the rates are based wholly upon the quantity 
 of water measured through the meters themselves. 
 
 Nor can any scale of meter rates based wholly on quantity 
 give justice between different classes of consumers, or even be¬ 
 tween individual consumers of the same class. Indeed, it must 
 be confessed that no schedule of rates that can be devised, will in 
 all cases bring exact justice. The best that can be done will be 
 but an approximation. The approximation may, however, be 
 closer, if certain principles are followed than if they are ignored. 
 
 SOME CONTROLLING PRINCIPLES IN RATE MAKING. 
 
 Many of the early and present advocates of the use of meters, 
 urged as one reason for their adoption that it would enable water 
 to be sold at a uniform price to all consumers, thus preventing, 
 as was alleged, any discrimination. The argument being, that to' 
 
 73 
 
have different rates for different quantities used, was in effect to 
 discriminate between individuals and classes of consumers. 
 
 Water, it was contended, is a commodity, and one consumer 
 should not be charged more for a like quantity than another. 
 This reasoning lead to the adoption of what may be termed “Flat 
 Meter Rates,” as in the cities of Cleveland and Milwaukee, where 
 there is only one price per unit, for whatever purpose water is 
 used, or in whatever quantity served. 
 
 Notwithstanding such fallacies have controlled in the shap¬ 
 ing of rates in some cases, the analogy instituted between the 
 product dealt out by a public utility, and ordinary commodities 
 sold in the open market, does not hold on critical examination. 
 
 The product of a public utility does not consist of a dis¬ 
 engaged thing, or commodity. It is not gas, or water delivered 
 in a bushel measure that is sold, but gas or water delivered, con¬ 
 tinuously or intermittently, at the will of the user, at a particular 
 spot, under pressure. When no draught is being made it is at 
 hand ready to be drawn on the instant. This “being always at 
 han$,” and “ready for use,” is the larger part of the service, 
 rendered by a public utility. In other words, paradoxical as it 
 sounds, the principal service of a public utility is being ready 
 to serve. 
 
 When a city contracts with a public service corporation for 
 fire protection, it is not for a given amount of water delivered 
 on order, as so much coal, but it is for a given amount to be 
 delivered under pressure on momentary demand, without notice. 
 This can only be done by an expensive plant conducting the 
 water to all parts of the city, and always kept under pressure. 
 Though it were not called into use for weeks at a time, the fixed 
 charges and expenses would remain practically the same. 
 
 So completely does the “service of being ready to serve” 
 overshadow the direct product furnished for extinguishing fires, 
 that if the water actually used was paid for by the gallon at 
 what it costs, the price would be astounding. 
 
 As a matter of fact, when conditions are analyzed, the most 
 valuable of service is rendered for long periods without the use of 
 a drop of water. 
 
 Automatic sprinkling systems installed where there are valu¬ 
 able goods and other property to protect, may run, and do run for 
 years without any water escaping therefrom. But they are ren¬ 
 dering service just the same, by furnishing protection, and by the 
 reduction of insurance rates. Many business establishments put 
 in expensive systems of their own, and maintain pumping plants 
 at continuous expense, for no other purpose than to secure a re¬ 
 duction in fire insurance rates. 
 
 Then who shall say that the “Readiness to Serve” may not, 
 in many instances, be the most valuable service rendered? 
 
 74 
 
The same reasoning applies in a considerable degree to all 
 kinds of service rendered by a public utility. There is scarcely 
 an exception. 
 
 If all water works plants had been built solely for fire pro¬ 
 tection, as have a number of special systems of late years, water 
 would not have been sold by quantity. The service would have 
 been gauged in some other manner. 
 
 Water works however, were and are usually built to meet a 
 great variety of needs, with some of which the quantity is a large 
 if not a controlling element. But even with these at first, con¬ 
 sideration of quantity did not wholly control, for the fixture rate, 
 made without regard to quantity, is more of a readiness to serve 
 charge than otherwise. 
 
 It was only with the development of a successful meter that 
 the element of a quantity charge was emphasized. 
 
 The first tendency of meter advocates was to get as far away 
 as possible from the original practice. Hence the flat meter rate 
 based upon enthusiasm rather than any well considered plan. 
 
 Such rates have not secured general favor, being obviously 
 unsuited to the most of water works plants. Only in large cities, 
 where the cost of supplying water is relatively small, or where 
 the plant has mostly been paid for by taxation or past earnings, 
 so that rates can be fixed as low, or lower than the usual mini¬ 
 mum scale, are flat meter rates possible. 
 
 And even then they are only possible by making one class 
 of consumers pay for service rendered to another class, or by the 
 municipality as a whole meeting the inequality. 
 
 This statement is well illustrated by the experience in Cleve¬ 
 land, which is the most conspicuous example of the application 
 of flat meter rates on a large scale. 
 
 After the process of setting meters had been in progress 
 from two to three years, and 25,000 meters were in use, in 1904, 
 Edward W. Bemis, Superintendent, presented a paper to the 
 American Water Works Association, containing an analysis of 
 the results they obtained as relates to the use of metered water. 
 He found after taking out 3,000 business meters and those that 
 had not been in use more than a year, that there were left 16,820 
 house meters. Of these, 5,770, or about one-third, were using 
 water at the average of 56 gallons per day, and 5,550, also about 
 one-third, were using water at the average rate of 155 gallons 
 per day, and 5,550 were using water at the average rate of about 
 660 gallons per day. 
 
 Another analysis made the following year and contained in 
 the New England Water Works Association for 1905, of 26,000 
 meters, not including business meters, showed a consumption 
 per meter as follows: 
 
 75 
 
y\ of the total number, or 6,500 residences, 
 
 averaged. 62 gallons per day 
 
 ]/ 2 of the total number, or 13,000 residences, 
 
 averaged. 83 gallons per day 
 
 And 34 of the total number, or 6,500 resi, 
 
 dences, averaged.104 gallons per day 
 
 With the Cleveland minimum readiness to serve rate of $2.50 
 per annum, and a meter rate of 5 1-3 cents per 1,000 gallons, the 
 following would be the yearly charges for houses using varying 
 quantities of water: 
 
 50 gallons per day.$ 3.47 per annum 
 
 100 gallons per day. 4.45 per annum 
 
 150 gallons per day. 5.42 per annum 
 
 200 gallons per day. 6.39 per annum 
 
 300 gallons per day. 8.34 per annum 
 
 400 gallons per day. . 10.27 per annum 
 
 500 gallons per day. 12.22 per annum 
 
 In the same paper Mr. Bemis gave the cost of setting and 
 maintaining 16,800 £4-inch meters in use at that time, the details 
 _ of which will be found on page 62 of this report. 
 
 From the 1908 report of the Cleveland Water Department, 
 the cost of setting and maintaining 64,149 ^4-inch meters has 
 been obtained, which will also be found on page 62. 
 
 These data show that $2.00 per annum covers all meter costs 
 in Cleveland, including interest. 
 
 Two dollars taken off of the revenue for each metered house 
 leaves the contribution of that house toward the operating, de¬ 
 preciation and interest fund, on all of the plant except meters. 
 
 The minimum rate of $2.50 applies to all houses using 5/^- 
 inch meters, whose annual assessment rate is under $9,00, but 
 just what numbers would be included in this rate, out of 64,149 
 houses, is not known, though it must amount to many thousands. 
 
 If the water used in such houses remains the same as in 
 1905, then there would be many thousands of houses that would 
 contribute less than $2.00 a year apiece to this fund. 
 
 The works had cost to the end of 1908, $11,876,195, the bond¬ 
 ed debt was $5,091,000, at 4 per cent interest, and the operating 
 expenses, interest and sinking fund amounted to $588,327 per 
 annum, to which, if 1 per cent depreciation is added, gives a total 
 annual charge of $677,089. Total income from water rents, 
 $953,055. 
 
 It is evident that the occupants of these thousands of houses 
 were not paying for their water service by a wide margin, and 
 that some other group of consumers, or other agency, was. 
 
 76 
 
Instead of a uniform meter rate great varieties of schedules 
 have been devised and put into operation, so that it is scarcely an 
 exaggeration to say that no two plants in the country have the 
 same scale, or use the same basis for a scale. Meter rates, im¬ 
 possible as it may seem, being much more variable, and less har¬ 
 monious than schedules of fixture rates. 
 
 As it would take much time with no corresponding benefit, 
 to go into the details of meter rate schedules now in use, it will 
 be sufficient to say that maximum rates vary from 4 to 60 cents 
 per 1,000 gallons, and minimum rates from 2 to 30 cents, with all 
 conceivable intermediate combinations of rates, and unthinkable 
 annual minima. 
 
 This babel of rates, and the lack of any consistent guiding 
 principle in their making, has been recognized for years by water 
 works managers, and efforts have been made to develop some 
 plan that makes an approach to uniformity, and that can be made 
 generally applicable. 
 
 Probably the most intelligent effort in that direction was 
 made by the New England Water Works Association, which re¬ 
 sulted in a report of a committee of which Freeman C. Coffin was 
 chairman, made in 1905, and published in the proceedings of the 
 Association for that year. 
 
 The report as finally submitted takes the form mainly of 
 certain suggestions to be observed in fixing meter rates. The 
 committee concluded that it was undesirable to attempt to fix a 
 scale of rates because it would be impracticable to devise a scale 
 that would meet with general adoption or adaptability. It was 
 thought possible, however, to arrive at some basis for a scale that 
 would be applicable to any particular plant, due consideration 
 being given to the special conditions prevailing with the plant. 
 
 The more important requirements of a method for arranging 
 meter rates the committee held were: 
 
 That it should insure a sufficient revenue to meet the oper¬ 
 ative and financial demands of the plants. 
 
 That it should be flexible so that the rates may be easily 
 changed in case of a deficiency or surplus of income. 
 
 That the method should allow of the use of meters upon 
 services with a single faucet without increase over the faucet 
 rate, except for actual use or waste of water. 
 
 That it should secure from large houses with a full line of 
 fixtures, a sufficient amount to meet the proportional fixed 
 charges of the plant even if little water is used. 
 
 The committee suggested two methods that it was thought 
 would measurably meet these requirements. 
 
 One of the methods proposed, called the “Frontage Assess¬ 
 ment” method, is based upon the frontage of the lot or premises 
 occupied by the buildings being served. 
 
 77 
 
The other, called the “Multiple Minimum Rate” method, is 
 founded on rates giving the right to the installation of the vari¬ 
 ous kinds of fixtures or apparatus to be used on the premises. 
 
 Each method is expected to provide a revenue, not affected 
 by the amount of water used, and which will cover a material 
 part of the necessary annual outlays, and is really in effect the 
 establishing of a “Readiness to Serve” charge accompanied by 
 a quantity meter rate. 
 
 Something akin to the “Frontage Assessment” plan was 
 adopted by Chicago when the water works were put into oper¬ 
 ation. It combined frontage assessment with fixture rates, as 
 well as with meter rates. 
 
 The fixing of a minimum rate based upon some feature of 
 the plant or premises served, has been, and is used extensively 
 in various plants, particularly for the purpose of bridging over 
 the hazardous period of change from a fixture to a meter rate 
 basis. 
 
 When Cleveland began in 1901, the radical policy of uni¬ 
 versal metering, at the most rapid rate ever known, minima, or 
 readiness to serve rates, were adopted to lessen tne risk involves. 
 
 For all premises supplied by meters larger than ^-inch a 
 minimum cnarge at the rate of $10.00 per annum was made. 
 
 For premises having ^-inch meters, there were four mini¬ 
 mum charges. 
 
 When the annual charge under the old fixture rate assess¬ 
 ments was $4.00 and under, the minimum was $2.50 per annum; 
 when it was $4.00 to $6.00, the minimum was $4.00 per annum; 
 when it was $6.00 to $10.00 it was $6.00 per annum, and when 
 it was over $10.00 the minimum was $8.00 per annum. 
 
 The flat meter rate additional to these minima was 40 cents 
 per thousand cubic feet, or 5 1-3 cents per thousand gallons to 
 all classes and kinds of customers. Since that time, these mini¬ 
 ma for ^g-inch meters have been abolished, and others substi¬ 
 tuted, except the lowest one of $2.50 per annum, which has been 
 made to apply to all cases where the annual assessment rate 
 does not exceed $9.00. 
 
 Some water works managers advocate, and some have 
 adopted a varying scale of minima, based on the size of meter. 
 
 It is very common for water companies to make an annual 
 charge for installing and maintaining meters, based often on the 
 size of the meter. Some municipalities do the same, as for in¬ 
 stance, Milwaukee charges one dollar a year. 
 
 This charging for meters can serve no mwoose that cannot 
 be served by establishing minimum rates that will include the 
 meter expense, unless, indeed, it disguises the charge so that the 
 consumer does not realize that it is a part of the water rates. 
 
 78 
 
But whatever basis is adopted, or reason given for minimui.i 
 rates where water is furnished by the quantity, they are in the 
 last analysis, merely a “readiness to serve” charge, and the 
 almost universality of their use, in one form or another, amounts 
 to a unanimous recognition of the necessity of some factor in 
 meter rate schedules that does not vary with the quantity of 
 water. 
 
 METER RATE SCHEDULE FOR PEORIA. 
 
 The concrete problem at Peoria is to devise a plan which 
 will minimize the risk of the revenue attending a radical change 
 from fixture rates to meter rates, and that will the most equitably 
 and automatically apportion this revenue among the consumers, 
 and be as simple as possible in its application and operation. 
 
 No plan that has been proposed or suggested, commends 
 itself as being entirely adapted to the conditions. 
 
 Out of a total of 9,454 residences, and small business houses, 
 only 198, all residences, have meters, 9,256 of them being on room 
 and fixture rates, which are probably as fairly scaled as is prac¬ 
 ticable. We have a detailed analysis of the fixtures and rooms 
 for which charges are made in each of these 9,454 houses, with a 
 classified summary of the same. 
 
 In view of the information contained in the foregoing dis¬ 
 cussion, and much that it was not practicable to introduce, there 
 seems no fairer way than to use “rooms and fixtures” as a basis 
 for a scale of “readiness to serve” minima. 
 
 In effect this would take into account that element which 
 the Committee of the New England Water Works Association 
 sought to introduce by the “Frontage Assessment” method. The 
 rooms of any house being the substantial equivalent of the lot 
 frontage, and the kinds of fixtures used, measurably representing 
 the character of the improvement. 
 
 The effect of using rooms and fixtures as a basis, is some- 
 , what analogous to combining the “Frontage Assessment” 
 method and the “Multiple Fixture” method. In fact, it is be¬ 
 lieved that the number of rooms is a better factor than the front¬ 
 age of the lot occupied by the house. 
 
 Another consideration that commends this proposed basis 
 for the minima, is the fact that before meters were invented, 
 practice had recognized fixtures as the universal factor for which 
 charges should be made, so that they may be said to be funda¬ 
 mental in rate making. 
 
 As has been heretofore noted, when meters came to demand 
 consideration, they directed the attention of water users, and 
 water purveyors to the commodity idea, and temporarily at least 
 
 79 
 
the fixture, and the idea for which it stood in water rate sched¬ 
 ules was obscured. 
 
 The report of the Committee of the New England Water 
 Works Association is evidence that it is demanding considera¬ 
 tion even in meter rate schedules. 
 
 It is not thought advisable that minimum charges should 
 be varied with the number of fixtures of a given kind, installed 
 in any house, nor that an attempt should be made to fix a minima 
 for every kind of fixture or apparatus which may be used. It 
 will be simpler and ought to bring just as good results, to include 
 in the minimum rate schedule, in addition to the number of 
 rooms, only the most important fixtures, or apparatus used in 
 buildings, whether residences or business houses. 
 
 That is, there would be only one minimum rate for baths, 
 whatever the number used, the quantity meter rate being ex¬ 
 pected to cover the multiplication of them. 
 
 The minimum rates would be confined to the following 
 items: 
 
 Number of rooms, baths, water closets, wash basins, laundry 
 sinks or tubs, and yard or street sprinklers. 
 
 The following proposed rates are based upon 100 cubic feet 
 of water instead of 1,000 gallons, 100 cubic feet being the equiva¬ 
 lent of 750 gallons. 
 
 THE PROPOSED NEW METER RATE ORDINANCE 
 should embody the following provisions relative to the installa¬ 
 tion and use of meters by the Peoria Water Works Company. 
 
 On and after the passage of such ordinance the Company is 
 to begin the systematic and compulsory installation of meters 
 for all service pipes which have not already been metered, 
 through which a permanent and constant supply of water is fur¬ 
 nished. 
 
 Meters to be applied first to manufacturing establishments 
 and business houses of all kinds, including stores, saloons, res¬ 
 taurants, office buildings, hotels and boarding houses. To stables 
 and watering troughs that are kept running. To schools, 
 churches, hospitals and public buildings, of all kinds, where the 
 greatest saving of water can be effected. 
 
 This work to be followed, and accompanied by the applica¬ 
 tion of meters to private dwellings, in any systematic manner 
 most conducive to economical working and reduction in water 
 consumption. 
 
 The operation of installing meters to be carried forward, 
 without unnecessary interruption, at a rate sufficiently rapid to 
 accomplish the complete metering of the city by December 31, 
 1913. 
 
 80 
 
METER RATES TO BE PAID QUARTERLY. 
 
 Water measured through meters shall be charged for as 
 follows: 
 
 For the first 400 cubic feet of water used through a single 
 meter per day, at the rate of 15 cents per 100 cubic feet. 
 
 For all water used through a single meter, in excess of 400 
 cubic feet per day, at the rate of 7.5 cents per 100 cubic feet. 
 
 READINESS TO SERVE RATES shall be paid quarterly 
 in addition to the foregoing meter rates, for all dwellings, board¬ 
 ing and lodging houses, hotels, club houses, hospitals, office 
 buildings, restaurants, stores, saloons, work shops, stables, and 
 manufactories, and other establishments, whose annual charge, 
 on the flat or fixture rate basis would not exceed $200.00 per an¬ 
 num, as follows: 
 
 A basic room rate of 20 cents per room per quarter, shall 
 be paid, for all rooms in any building, served by a single meter, 
 but not including closets and halls; and provided that stores, 
 saloons, shops, and other buildings that consist of large rooms, 
 shall be rated as having one room to each 300 square feet of floor 
 space; and provided, that the quarterly room rate charge shall 
 never be less than 80 cents for any building supplied through a 
 single meter: Provided, further, that the foregoing room rate 
 charge shall cover the use of a single faucet and sink, but no' 
 other fixtures. 
 
 All such buildings supplied through a single meter, shall pay 
 in addition to the meter and room rate, a quarterly readiness to 
 serve rate for the use of fixtures of each of the following kind, 
 provided such fixtures are used: 
 
 For one or more baths.50 cents 
 
 water closets.50 cents 
 
 wash basins.25 cents 
 
 laundry sinks or tubs.25 cents 
 
 lawn or street sprinklers.75 cents 
 
 Provided that no readiness to serve charge shall be made for 
 any other kind of fixtures or apparatus, or for keeping animals 
 on the premises. 
 
 And provided further that the amount of water at meter 
 rates, charged to a single metered premises, shall not be less than 
 600 cubic feet per quarter. 
 
 All other buildings, establishments, or premises, to which 
 meters are applicable, and which are not properly classifiable 
 under the foregoing “Readiness to Serve” schedule, are to pay 
 meter rates only. 
 
 81 
 
PROPOSED FLAT OR FIXTURE RATE PROVISIONS. 
 
 In all cases where water is used that is not measured through 
 a meter, the fixture rate shall be applied. 
 
 It is proposed that the schedule of rates found in the original 
 ordinance be re-enacted, with the following additions thereto: 
 
 Wash basins.$1.50 per annum 
 
 Each additional. 1.00 “ 
 
 Laundry sinks or tubs.1.50 “ 
 
 Each additional. 1.00 “ 
 
 Washing machines. 4.00 “ 
 
 Each additional. 2.00 “ 
 
 Motor pump. 5.00 “ 
 
 Heater, steam or hot water, in dwellings. 3.00 “ 
 
 A rate should also be fixed for automatic sprinkling systems, 
 and fire hydrants furnished on private premises, but before any 
 attempt is made to do so, an analysis of the present charges foir 
 such service as is now being rendered is required, and the basis 
 upon which they are made should be fully understood. 
 
 This is a problem that has been considered and frequently 
 discussed by water works managers, but about which consider¬ 
 able difference of opinion exists. All sides of the question 
 should be canvassed before any final decision is reached, as there 
 seems to be no unity of principles or practice in fixing such rates. 
 
 The free water provisions of the original ordinance should 
 be repealed. 
 
 The foregoing scale of rates are put forward with the belief 
 that they substantially cover the ground, and would meet the 
 requirements at Peoria, but there are doubtless many ways in 
 which they can be improved. 
 
 Notwithstanding the invaluable work of the Auditor in fur¬ 
 nishing a basis upon which to build, there are a number of things 
 that should be more fully considered with the suggestions of the 
 officers of the Water Works Company. 
 
 It is believed that the plan and rates proposed, possess the 
 merit of being easily and equitably raised or lowered by a change 
 in the meter rate. 
 
 82 
 

 Appendix I. 
 
 Statistics of Thirty-nine Municipal Water Works Plants 
 Supplied by Pumps in Various Cities Having 
 Populations of 25,000 to 240,000, 
 
 / 
 
 83 
 
Populations of 25,000 to 240,000. 
 
 
 Private 
 
 Revenue 
 
 Reported 
 
 Operating 
 
 “3 
 
 NAME OF C 
 
 Total 
 
 Per 
 
 Tap 
 
 Per 
 
 Capita 
 
 Value of 
 Public 
 Service 
 
 and 
 
 Maintenance 
 
 Expense 
 
 M w O 
 
 c « > 
 
 4)0 4) 
 
 9* *-iP4 
 
 X <0. 
 
 weu's 
 
 *Kansas City, IV 
 
 $839,182 
 
 $22 
 
 $3.49 
 
 $211,900 
 
 $331,075 
 
 39 
 
 Louisville, Ky. 
 
 708,725 
 
 21 
 
 2.99 
 
 100,920 
 
 217,612 
 
 37 
 
 *Providence, R. 
 
 717,752 
 
 27 
 
 3.34 
 
 197,969 
 
 28 
 
 *St. Paul, Minn 
 
 368,990 
 
 13 
 
 1.76 
 
 142,835 
 
 83,210 
 
 22 
 
 *Columbus, Ohic 
 
 265,148 
 
 11 
 
 1.61 
 
 
 150,545 
 
 57 
 
 *Atlanta, Ga.. . 
 
 292,715 
 
 17' 
 
 2.06 
 
 202,141 
 
 140,565 
 
 48 
 
 Memphis, Tenri 
 
 373,787 
 
 21 
 
 2.74 
 
 25,000 
 
 192,467 
 
 52 
 
 Richmond, Va. 
 
 210,411 
 
 12 
 
 1.92 
 
 30,808 
 
 62,468 
 
 30 
 
 Fall River, Mas 
 
 210,975 
 
 25 
 
 1.98 
 
 44,740 
 
 60,605 
 
 29 
 
 Dayton, Ohio. 
 
 140,449 
 
 6 
 
 1.32 
 
 72,969 
 
 52 
 
 Grand Rapids, 
 
 175,290 
 
 10 
 
 1.65 
 
 12,275 
 
 58,908 
 
 33 
 
 Nashville, Tenr 
 
 241,151 
 
 19 
 
 2.32 
 
 51,725 
 
 104,538 
 
 43 
 
 Lowell, Mass.. 
 
 187,018 
 
 15 
 
 1.96 
 
 5,534 
 
 118,334 
 
 63 
 
 Wilmington, D 
 
 213,964 
 
 12 
 
 2.40 
 
 39,243 
 
 73,194 
 
 34 
 
 Lynn, Mass. . . 
 
 267,344 
 
 18 
 
 3.18 
 
 
 147,177 
 
 55 
 
 New Bedford, ' 
 
 218,803 
 
 19 
 
 2.67 
 
 
 56,806 
 
 26 
 
 Lawrence, Mas 
 
 122,835 
 
 18 
 
 1,67 
 
 
 72,591 
 
 59 
 
 *Houston, Texas 
 
 211,841 
 
 31 
 
 2.89 
 
 
 70,392 
 
 33 
 
 Yonkers, N. Y. 
 
 204,649 
 
 27 
 
 2.93 
 
 35,850 
 
 99,863 
 
 49 
 
 Manchester, N 
 
 131,023 
 
 19 
 
 1.91 
 
 21,275 
 
 34,561 
 
 26 
 
 Erie, Pa. 
 
 154,548 
 
 109,933 
 
 10 
 
 2.43 
 
 
 73,141 
 
 42,511 
 
 47 
 
 Brockton, Mas 
 
 14 
 
 1.76 
 
 32,000 
 
 39 
 
 Harrisburg, Pa 
 
 189,183 
 
 12 
 
 3.23 
 
 39,166 
 
 65,545 
 
 34 
 
 Ft. Wayne, Inc 
 
 91,300 
 
 8 
 
 1.72 
 
 
 35,966 
 
 39 
 
 Saginaw, Mich 
 
 83,754 
 
 11 
 
 1.61 
 
 24,476 
 
 39,540 
 
 47 
 
 * Allentown, Pa. 
 
 109,120 
 
 9 
 
 2.16 
 
 57,445 
 
 44,864 
 
 41 
 
 Pawtucket, R. 
 
 242,539 
 
 23 
 
 5.19 
 
 71,800 
 
 56,974 
 
 23 
 
 McKeesport, P 
 
 63,877 
 
 10 
 
 1.38 
 
 20,836 
 
 47,272 
 
 74 
 
 Binghamton, b 
 
 123,293 
 
 13 
 
 2.68 
 
 
 45,193 
 
 37 
 
 Topeka, Kan.. 
 
 80,911 
 
 15 
 
 1.85 
 
 
 30,360 
 
 37 
 
 Newton, Mass, 
 
 132,619 
 
 17 
 
 3.42 
 
 5,698 
 
 28,642 
 
 22 
 
 Rockford, Ill.. 
 
 68,450 
 
 9 
 
 1.80 
 
 
 29,286 
 
 43 
 
 Woonsocket, P 
 
 85,717 
 
 26 
 
 2.42 
 
 25,352 
 
 18,597 
 
 22 
 
 Taunton, Mass 
 
 78,555 
 
 15 
 
 2.54 
 
 
 33,575 
 
 42 
 
 Hamilton, Ohi 
 
 45,147 
 
 9 
 
 1.56 
 
 27,000 
 
 32,791 
 
 73 
 
 Waltham, Mas 
 
 86,614 
 
 23 
 
 3.04 
 
 
 39,088 
 
 45 
 
 Aurora, Ill.... 
 
 49,795 
 
 9 
 
 1.79 
 
 
 18,444 
 
 37 
 
 Madison, Wis. 
 
 41,122 
 
 9 
 
 1.49 
 
 
 26,177 
 
 64 
 
 Poughkeepsie, 
 
 59,359 
 
 14 
 
 2.28 
 
 
 33,891 
 
 57 
 
 Totals and m 
 Averages.... 
 
 $7,997,848 
 
 205,073 
 
 $ 16 
 
 $2.41 
 
 
 $3,087,706 
 
 79,172 
 
 38 
 
 * Cities repo: 
 
APPENDIX I. 
 
 Statistic of Thirty-Nine Municipal Water Works Plants, Supplied by Pumps in Various Cities, having Populations of 25,000 to 240,000. 
 
 NAME OF CITY 
 
 Date 
 
 of 
 
 Report 
 
 +-> 
 
 a 
 
 r < 
 
 <D 
 
 bO 
 
 < 
 
 Population 
 
 Water Consumption 
 
 Millions of 
 Gallons 
 Per Year 
 
 Gallons 
 
 per 
 
 Capita 
 
 daily 
 
 Head 
 on Pumps 
 in Feet 
 
 Number 
 of Miles of 
 Mains 
 
 Number of 
 Services 
 
 Number of 
 Meters 
 
 Investment 
 
 Total 
 
 Per Mile 
 of Main 
 
 Per 
 
 Capita 
 
 Private Revenue 
 
 Total 
 
 Per 
 
 Tap 
 
 Per 
 
 Capita 
 
 Reported 
 Value of 
 Public 
 Service 
 
 Operating 
 
 and 
 
 Maintenance 
 
 Expense 
 
 *Kansas City, Mo. 
 
 Louisville, Ky. 
 
 *Providence, R. I. 
 
 *St. Paul, Minn. 
 
 *Columbus, Ohio. 
 
 * Atlanta, Ga. 
 
 Memphis, Tenn. 
 
 Richmond, Va. 
 
 Fall River, Mass. 
 
 Dayton, Ohio. 
 
 Grand Rapids, Mich.. . 
 
 Nashville, Tenn. 
 
 Lowell, Mass. 
 
 Wilmington, Del. 
 
 Lynn, Mass. 
 
 New Bedford, Mass... . 
 
 Lawrence, Mass. 
 
 *Houston, Texas. 
 
 Yonkers, N. Y. 
 
 Manchester, N. H. 
 
 Erie, Pa. 
 
 Brockton, Mass.. 
 
 Harrisburg, Pa. 
 
 Ft. Wayne, Ind. 
 
 Saginaw, Mich. 
 
 *Allentown, Pa. 
 
 Pawtucket, R. I. 
 
 McKeesport, Pa. 
 
 Binghamton, N. Y. 
 
 Topeka, Kan. 
 
 Newton, Mass. 
 
 Rockford, Ill.. ..'.. 
 
 Woonsocket, R. I. 
 
 Taunton, Mass. 
 
 Hamilton, Ohio. 
 
 Waltham, Mass. 
 
 Aurora, Ill. 
 
 Madison, Wis. 
 
 Poughkeepsie, N. Y.. . 
 
 Totals and means. . . . 
 Averages. 
 
 1908 
 
 34 
 
 239,900 
 
 8,814 
 
 100 
 
 405 
 
 393.0 
 
 39,389 
 
 15,948 
 
 $7,083,807 
 
 $18,025 
 
 $ 29 
 
 $839,182 
 
 $22 
 
 1909 
 
 49 
 
 236,700 
 
 7,761 
 
 90 
 
 310 
 
 373.5 
 
 33,731 
 
 2,642 
 
 8,891,015 
 
 26,344 
 
 38 
 
 708,725 
 
 21 
 
 1908 
 
 32 
 
 214,600 
 
 5,692 
 
 72 
 
 311 
 
 372.0 
 
 26,321 
 
 23,180 
 
 7,586,941 
 
 20,395 
 
 35 
 
 717,752 
 
 27 
 
 1909 
 
 39 
 
 209,600 
 
 4,287 
 
 56 
 
 
 327.9 
 
 28,063 
 
 13,628 
 
 5,160,781 
 
 15,738 
 
 25 
 
 368,990 
 
 13 
 
 1907 
 
 37 
 
 164,700 
 
 5,942 
 
 99 
 
 
 210 
 
 195 
 
 224.9 
 
 24,987 
 
 19,016 
 
 3,294,926 
 
 14,650 
 
 20 
 
 265,148 
 
 11 
 
 1908 
 
 32 
 
 141,800 
 
 4,787 
 
 92 
 
 
 230 
 
 197.0 
 
 17,517 
 
 16,436 
 
 3,065,012 
 
 15,558 
 
 22 
 
 292,715 
 
 17 
 
 1909 
 
 39 
 
 136,400 
 
 5,117 
 
 103 
 
 
 202.5 
 
 18,103 
 
 7,183 
 
 3 077 925 
 
 15,199 
 
 23 
 
 373,787 
 
 21 
 
 1909 
 
 79 
 
 109,500 
 
 4,553 
 
 114 
 
 122 
 
 133.4 
 
 18,000 
 
 12,146 
 
 2,667,400 
 
 19,996 
 
 24 
 
 210,411 
 
 12 
 
 1909 
 
 35 
 
 106,500 
 
 1,949 
 
 50 
 
 186 
 
 109.6 
 
 8,316 
 
 8,197 
 
 2,216,155 
 
 20,220 
 
 21 
 
 210,975 
 
 25 
 
 1908 
 
 38 
 
 106,300 
 
 3,024 
 
 78 
 
 150 
 
 167.8 
 
 21,220 
 
 16,217 
 
 3,577,743 
 
 21,321 
 
 33 
 
 140,449 
 
 6 
 
 1909 
 
 37 
 
 105,900 
 
 5,569 
 
 144 
 
 
 146 
 
 205 
 
 175.0 
 
 17,125 
 
 6,328 
 
 1,936,770 
 
 11,067 
 
 18 
 
 175,290 
 
 10 
 
 1908 
 
 78 
 
 103,900 
 
 5,333 
 
 141 
 
 308 
 
 114.6 
 
 12,585 
 
 7,440 
 
 2,850,000 
 
 24,870 
 
 27 
 
 241,151 
 
 19 
 
 1909 
 
 39 
 
 95,100 
 
 1,913 
 
 55 
 
 164 
 
 143.4 
 
 12,307 
 
 9,465 
 
 3,151,864 
 
 21,980 
 
 33 
 
 187,018 
 
 15 
 
 1909 
 
 37 
 
 89,000 
 
 3,514 
 
 108 
 
 I 
 
 112 
 
 285 
 
 127.2 
 
 17,920 
 
 5,685 
 
 2,637,172 
 
 20,654 
 
 30 
 
 213,964 
 
 12 
 
 1909 
 
 38 
 
 83,900 
 
 2,334 
 
 76 
 
 
 148 
 
 141.0 
 
 14,876 
 
 5,827 
 
 2,966,946 
 
 21,042 
 
 35 
 
 267,344 
 
 18 
 
 1908 
 
 42 
 
 81,700 
 
 2,740 
 
 92 
 
 167 
 
 114.0 
 
 11,516 
 
 3,628 
 
 3,453,034 
 
 30,290 
 
 42 
 
 218,803 
 
 19 
 
 1907 
 
 32 
 
 73,300 
 
 1,282 
 
 48 
 
 f 324 
 \ 186 
 
 90.8 
 
 6,970 
 
 6,220 
 
 2,269,698 
 
 24,996 
 
 31 
 
 122,835 
 
 18 
 
 1909 
 
 31 
 
 73,300 
 
 3,197 
 
 120 
 
 " 138 
 
 94.6 
 
 6,726 
 
 1,641 
 
 1,211,404 
 
 12,805 
 
 16 
 
 211,841 
 
 31 
 
 1908 
 
 34 
 
 69,800 
 
 2,572 
 
 101 
 
 185 
 
 122.0 
 
 7,492 
 
 7,492 
 
 2,636,818 
 
 21,613 
 
 38 
 
 204,649 
 
 27 
 
 1909 
 
 35 
 
 68,600 
 
 1,265 
 
 50 
 
 1 
 
 116 
 
 l 275 
 
 117.4 
 
 6,737 
 
 4,945 
 
 1,962,198 
 
 16,714 
 
 28 
 
 131,023 
 
 19 
 
 1909 
 
 42 
 
 63,600 
 
 4,655 
 
 200 
 
 \ 
 
 f 299 
 
 I 237 
 
 130.6 
 
 15,763 
 
 438 
 
 2,615,506 
 
 20,027 
 
 41 
 
 154,548 
 
 10 
 
 1909 
 
 29 
 
 62,300 
 
 831 
 
 36 
 
 302 
 
 110.0 
 
 7,879 
 
 7,817 
 
 1,874,851 
 
 17,044 
 
 31 
 
 109,933 
 
 14 
 
 1909 
 
 76 
 
 58,500 
 
 3,658 
 
 171 
 
 235 
 
 67.2 
 
 15,528 
 
 12,240 
 
 1,275,000 
 
 18,973 
 
 22 
 
 189,183 
 
 12 
 
 1908 
 
 28 
 
 53,100 
 
 1,438 
 
 74 
 
 142 
 
 102.0 
 
 11,834 
 
 4,078 
 
 1,288,247 
 
 26,300 
 
 24 
 
 91,300 
 
 8 
 
 1909 
 
 37 
 
 51,900 
 
 3,332 
 
 176 
 
 
 uu 
 
 t 132 
 
 104.8 
 
 7,412 
 
 334 
 
 987,929 
 
 9,427 
 
 18 
 
 83,754 
 
 11 
 
 1909 
 
 40 
 
 50,300 
 
 2,541 
 
 138 
 
 
 f 157 
 
 1 255 
 
 67.0 
 
 11,884 
 
 159 
 
 1,004,613 
 
 15,000 
 
 20 
 
 109,120 
 
 9 
 
 1909 
 
 32 
 
 46,700 
 
 3,311 
 
 194 
 
 
 \ 
 
 264 
 
 171.1 
 
 10,309 
 
 8,679 
 
 2,442,015 
 
 14,272 
 
 52 
 
 242,539 
 
 23 
 
 1908 
 
 26 
 
 46,300 
 
 1,979 
 
 117 
 
 
 60.1 
 
 6,090 
 
 1,628 
 
 604,880 
 
 10,064 
 
 13 
 
 63,877 
 
 10 
 
 1909 
 
 42 
 
 45,900 
 
 2,375 
 
 142 
 
 168 
 
 86.7 
 
 9.537 
 
 2,472 
 
 1,083,112 
 
 12,493 
 
 23 
 
 123,293 
 
 13 
 
 1908 
 
 26 
 
 43,800 
 
 880 
 
 55 
 
 
 58.6 
 
 5,229 
 
 3,560 
 
 756,505 
 
 12,910 
 
 17 
 
 80,911 
 
 15 
 
 1908 
 
 38 
 
 38,800 
 
 894 
 
 63 
 
 245 
 
 143.5 
 
 7,900 
 
 6,908 
 
 2,314,691 
 
 16,130 
 
 60 
 
 132,619 
 
 17 
 
 1909 
 
 34 
 
 38,000 
 
 1,318 
 
 95 
 
 
 90.5 
 
 7,215 
 
 3,109 
 
 849,926 
 
 9,391 
 
 22 
 
 68,450 
 
 9 
 
 1909 
 
 25 
 
 35,400 
 
 538 
 
 42 
 
 246 
 
 55.8 
 
 3,326 
 
 2,878 
 
 1,024,283 
 
 18,000 
 
 27 
 
 85,717 
 
 26 
 
 1909 
 
 33 
 
 30,900 
 
 793 
 
 70 
 
 161 
 
 86.0 
 
 5,237 
 
 2,630 
 
 1,391,656 
 
 16,182 
 
 45 
 
 78,555 
 
 15 
 
 1909 
 
 25 
 
 28,900 
 
 883 
 
 83 
 
 248 
 
 66.3 
 
 5,068 
 
 3,053 
 
 1,193,731 
 
 18,005 
 
 41 
 
 45,147 
 
 9 
 
 1909 
 
 36 
 
 28,500 
 
 869 
 
 83 
 
 215 
 
 54.0 
 
 3,800 
 
 320 
 
 787,040 
 
 14,575 
 
 28 
 
 86,614 
 
 23 
 
 1908 
 
 23 
 
 27,800 
 
 578 
 
 57 
 
 175 
 
 59.3 
 
 5,212 
 
 4,521 
 
 494,767 
 
 8,343 
 
 18 
 
 49,795 
 
 9 
 
 1909 
 
 27 
 
 27,600 
 
 617 
 
 61 
 
 231 
 
 58.6 
 
 4,601 
 
 4,538 
 
 575,756 
 
 9,825 
 
 21 
 
 41,122 
 
 9 
 
 1909 
 
 36 
 
 26,000 
 
 890 
 
 94 
 
 . 
 
 33.0 
 
 4,108 
 
 3,840 
 
 825,597 
 
 25,018 
 
 31 
 
 59,359 
 
 14 
 
 
 
 3,314,800 
 
 114,025 
 
 94 
 
 
 5,211.7 
 
 497,833 
 
 266,466 
 
 •$94,987,714 
 
 SIS,226 
 
 $ 28 
 
 $7,997,848 
 
 $ 16 
 
 
 33 
 
 84,995 
 
 2,924 
 
 
 212 
 
 133.6 
 
 12,760 
 
 6,832 
 
 2,435,582 
 
 
 
 205,073 
 
 
 $3.49 
 
 $211,900 
 
 $331,075 
 
 2.99 
 
 100,920 
 
 217,612 
 
 3.34 
 
 197,969 
 
 1.76 
 
 142,835 
 
 83,210 
 
 1.61 
 
 
 150,545 
 
 2.06 
 
 202,141 
 
 140,565 
 
 2.74 
 
 25,000 
 
 192,467 
 
 1.92 
 
 30,808 
 
 62,468 
 
 1.98 
 
 44,740 
 
 60,605 
 
 1.32 
 
 72,969 
 
 1.65 
 
 12,275 
 
 58,908 
 
 2.32 
 
 51,725 
 
 104,538 
 
 1.96 
 
 5,534 
 
 118,334 
 
 2.40 
 
 39,243 
 
 73,194 
 
 3.18 
 
 
 147,177 
 
 2.67 
 
 
 56,806 
 
 1,67 
 
 
 72,591 
 
 2.89 
 
 
 70,392 
 
 2.93 
 
 35,850 
 
 99,863 
 
 1.91 
 
 21,275 
 
 34,561 
 
 2.43 
 
 
 73,141 
 
 1.76 
 
 32,000 
 
 42,511 
 
 3.23 
 
 39,166 
 
 65,545 
 
 1.72 
 
 
 35,966 
 
 1.61 
 
 24,476 
 
 39,540 
 
 2.16 
 
 57,445 
 
 44,864 
 
 5.19 
 
 71,800 
 
 56,974 
 
 1.38 
 
 20,836 
 
 47,272 
 
 2.68 
 
 
 45,193 
 
 1.85 
 
 
 30,360 
 
 3.42 
 
 5,698 
 
 28,642 
 
 1.80 
 
 
 29,286 
 
 2.42 
 
 25,352 
 
 18,597 
 
 2.54 
 
 
 33,575 
 
 1.56 
 
 27,000 
 
 32,791 
 
 3.04 
 
 
 39,088 
 
 1.79 
 
 
 18,444 
 
 1.49 
 
 
 26,177 
 
 2.28 
 
 
 33,891 
 
 $2.41 
 
 
 $3,087,706 
 
 79,172 
 
 * Cities reported as to population on basis of 1910 census. 
 
Appendix II. 
 
 Showing Relation Between Population, Water Pumped, 
 Miles of Mains, Revenue, and Num¬ 
 ber of Services. 
 

 Sho-V 
 
 Number of Services. 
 
 
 Year 
 
 Ending 
 
 Population 
 
 Total 
 
 Private 
 Revenue 
 Per Million 
 of Gallons 
 
 Total 
 Revenue 
 Per Million 
 of Gallons 
 
 Private 
 
 Revenue 
 
 Per 
 
 Service 
 
 Oct. 31 
 
 
 
 
 
 
 1889 
 
 40,660 
 
 B 80,173 
 56,166 
 
 
 
 
 1890 
 
 41,920 
 
 $40 
 
 $55 
 
 $20 
 
 1891 
 
 43,340 
 
 68,212 
 
 35 
 
 54 
 
 17 
 
 1892 
 
 44,760 
 
 82,185 
 
 45 
 
 72 
 
 18 
 
 1893 
 
 46,180 
 
 95,379 
 
 54 
 
 96 
 
 16 
 
 1894 
 
 47,590 
 
 111,249 
 
 65 
 
 104 
 
 18 
 
 1895 
 
 49,010 
 
 115,731 
 
 66 
 
 103 
 
 17 
 
 1896 
 
 50,430 
 
 115,010 
 
 62 
 
 98' 
 
 15 
 
 1897 
 
 51,850 
 
 121,038 
 
 61 
 
 94 
 
 16 
 
 1898 
 
 54,090 
 
 124,757 
 
 67 
 
 102 
 
 16 
 
 1899 
 
 56,350 
 
 131,532 
 
 70 
 
 103 
 
 17 
 
 1900 
 
 58,600 
 
 134,533 
 
 71 
 
 104 
 
 16 
 
 1901 
 
 60,040 
 
 148,118 
 
 71 
 
 99 
 
 17 
 
 1902 
 
 61,480 
 
 164,996 
 
 84 
 
 113 
 
 19 
 
 Dec. 31 
 
 
 1903 
 
 62,920 
 
 201,768 
 
 83 
 
 110 
 
 19 
 
 1904 
 
 64,360 
 
 179,198 
 
 83 
 
 110 
 
 19 
 
 1905 
 
 65,800 
 
 188,092 
 
 84 
 
 111 
 
 19 
 
 1906 
 
 67,240 
 
 202,982 
 
 82 
 
 106 . 
 
 20 
 
 1907 
 
 68,680 
 
 1 217,753 
 
 81 
 
 104 
 
 20 
 
 1908 
 
 1909 
 
 70,120 
 
 71,560 
 
 ! 225,007 
 
 81 
 
 104 
 
 20 
 
 June 30 
 
 
 
 
 
 
 1910 
 
 73,000 
 
 s230,671 
 
 67 
 
 85 
 
 18 
 
 s Private revenue < na d e f or water furnished to business 
 establishments throw severa i thousands of dollars less than 
 the actual. Figures 
 
APPENDIX II. 
 
 Showing relation between Population, Water Pumped, Miles of Mains, Revenue and Number of Services. 
 
 Year 
 
 Ending 
 
 Population 
 
 Total 
 
 Y early 
 Pumpage 
 m Millions 
 of Gallons 
 
 Average 
 Daily 
 Pumpage 
 in Millions 
 of Gallons 
 
 Gallons 
 Per Capita 
 Per Day 
 
 Number 
 of Miles of 
 Mains 
 
 Population 
 Per Mile 
 of 
 
 Main 
 
 Number 
 
 of 
 
 Services 
 
 Services 
 Per 1000 
 of 
 
 Population 
 
 Gallons 
 Per Service 
 Per Day 
 
 REVENUE 
 
 Public 
 
 Private 
 
 
 Oct. 31 
 
 
 
 
 
 
 
 
 
 
 
 
 
 1889 
 
 40,660 
 
 
 
 
 45 0 
 
 900 . 
 
 
 
 
 $ 47,060 
 
 8 33,113 
 
 8 
 
 1890 
 
 41,920 
 
 1,023 
 
 2.8 
 
 67 
 
 
 
 2,084 
 
 49 
 
 1,340 
 
 15,350 
 
 40,816 
 
 
 1891 
 
 43,340 
 
 1,260 
 
 3 5 
 
 80 
 
 
 
 2,563 
 
 59 
 
 1,350 
 
 23,712 
 
 44,500 
 
 
 1892 
 
 44,760 
 
 1,141 
 
 3.1 
 
 70 
 
 76.8 
 
 580 
 
 2,881 
 
 64 
 
 1,080 
 
 31,016 
 
 51,169 
 
 
 1893 
 
 46,180 
 
 994 
 
 2.7 
 
 59 
 
 78.4 
 
 590 
 
 3,268 
 
 78 
 
 830 
 
 41,781 
 
 53,578 
 
 
 1894 
 
 47,590 
 
 1,065 
 
 2.9 
 
 61 
 
 78.6 
 
 600 
 
 3,862 
 
 81 
 
 750 
 
 41,900 
 
 69,349 
 
 
 1895 
 
 49,010 
 
 1,119 
 
 3.0 
 
 63 
 
 78.8 
 
 620 
 
 4,245 
 
 86 
 
 720 
 
 41,920 
 
 74,011 
 
 
 1896 
 
 50,430 
 
 1,171 
 
 3.2 
 
 63 
 
 79.1 
 
 640 
 
 4,797 
 
 95 
 
 670 
 
 41,950 
 
 73,060 
 
 
 1897 
 
 51,850 
 
 1,286 
 
 3.5 
 
 68 
 
 79.4 
 
 650 
 
 5,074 
 
 98 
 
 690 
 
 41,950 
 
 79,088 
 
 
 1898 
 
 54,090 
 
 1,229 
 
 3.4 
 
 64 
 
 79.7 
 
 680 
 
 5,278 
 
 97 
 
 630 
 
 41,950 
 
 82,807 
 
 
 1899 
 
 56,350 
 
 1,277 
 
 3.5 
 
 62 
 
 82.1 
 
 690 
 
 5,436 
 
 97 
 
 640 
 
 41,953 
 
 89,579 
 
 
 1900 
 
 58,600 
 
 1,292 
 
 3.5 
 
 60 
 
 83.0 
 
 710 
 
 5,702 
 
 98 
 
 620 
 
 42,171 
 
 92,362 
 
 
 1901 
 
 60,040 
 
 1,497 
 
 4.1 
 
 68 
 
 83.2 
 
 720 
 
 6,048 
 
 101 
 
 680 
 
 42,319 
 
 105,799 
 
 
 1902 
 
 61,480 
 
 1,461 
 
 4.0 
 
 65 
 
 87.7 
 
 700 
 
 6,365 
 
 103 
 
 630 
 
 42,371 
 
 122,625 
 
 
 Dec. 31 
 1903 
 
 62,920 
 
 1,834 
 
 4.3 
 
 68 
 
 88.8 
 
 710 
 
 6,768 
 
 107 
 
 640 
 
 49,979 
 
 151,789 
 
 
 1904 
 
 64,360 
 
 1,635 
 
 4.5 
 
 69 
 
 89.2 
 
 720 
 
 7,100 
 
 110 
 
 630 
 
 44,275 
 
 134,923 
 
 
 1905 
 
 65,800 
 
 1,709 
 
 4.7 
 
 71 
 
 91.6 
 
 720 
 
 7,492 
 
 114 
 
 620 
 
 45,265 
 
 142,827 
 
 
 1906 
 
 67,240 
 
 1,919 
 
 5.3 
 
 78 
 
 93.4 
 
 720 
 
 7,956 
 
 118 
 
 660 
 
 46,212 
 
 156,770 
 
 
 1907 
 
 68,680 
 
 2,093 
 
 5.7 
 
 83 
 
 96.7 
 
 710 
 
 8,571 
 
 125 
 
 670 
 
 46,876 
 
 170,877 
 
 
 1908 
 
 70,120 
 
 2,171 
 
 5.9 
 
 84 
 
 99.3 
 
 710 
 
 9,040 
 
 329 
 
 660 
 
 47,470 
 
 177,538 
 
 
 1909 
 
 71,560 
 
 2,578 
 
 7.1 
 
 98 
 
 101.2 
 
 710 
 
 9,679 
 
 135 
 
 730 
 
 
 
 
 j une ou 
 1910 
 
 73,000 
 
 2,714 
 
 7.4 
 
 102 
 
 102.6 
 
 710 
 
 10,239 
 
 140 
 
 710 
 
 47,500 
 
 sl83,171 
 
 
 
 Private 
 Revenue 
 Per Million 
 of Gallons 
 
 Total 
 Revenue 
 Per Million 
 of Gallons 
 
 r 
 
 Private 
 
 Revenue 
 
 Per 
 
 Total 
 
 Service 
 
 80,173 
 
 56,166 
 
 
 
 
 $40 
 
 $55 
 
 $20 
 
 68,212 
 
 35 
 
 54 
 
 17 
 
 82,185 
 
 45 
 
 72 
 
 18 
 
 95,379 
 
 54 
 
 96 
 
 16 
 
 111,249 
 
 65 
 
 104 
 
 18 
 
 115,731 
 
 66 
 
 103 
 
 17 
 
 115,010 
 
 62 
 
 98’ 
 
 15 
 
 121,038 
 
 61 
 
 94 
 
 16 
 
 124,757 
 
 67 
 
 102 
 
 16 
 
 131,532 
 
 70 
 
 103 
 
 17 
 
 134,533 
 
 71 
 
 104 
 
 16 
 
 148,118 
 
 71 
 
 99 
 
 17 
 
 164,996 
 
 84 
 
 113 
 
 19 
 
 201,768 
 
 83 
 
 110 
 
 19 
 
 179,198 
 
 83 
 
 110 
 
 19 
 
 188,092 
 
 84 
 
 111 
 
 19 
 
 202,982 
 
 82 
 
 106 
 
 20 
 
 217,753 
 
 81 
 
 104 
 
 20 
 
 225,007 
 
 81 
 
 104 
 
 20 
 
 s230,671 
 
 67 
 
 85 
 
 18 
 
 s Private revenue obtained by auditor from rating cards for the year ending June 30th, 1910. As no analysis was made for water furnished to business 
 establishments through meters, and there has been no increase in hydrant rental, the total revenue given is probably several thousands of dollars less than 
 the actual. Figures given for population include territory served outside the city. 
 
Appendix III. 
 
 Computation of Going Value of the Peoria Water Works 
 Plant. Cost of Reproducing Physical Plant 
 January 1, 1909, $1,950,000. 
 
 Diagram for Computing Going Value on file in 
 City Clerk’s Office. 
 
 91 
 
Cc>ant, January 1, 1909, $1,950,000 
 
 
 
 
 \T 
 
 
 Going Value of Operating Plant 
 
 
 Pi 
 
 
 
 
 
 Annual 
 Going Value 
 Difference 
 
 Present 
 Worth of 
 $1.00 with 
 
 Present 
 Worth of 
 Annual 
 
 
 < 
 
 W 
 
 >* 
 
 RE 
 
 'harges 
 
 Net Earnings 
 
 
 
 Privat< 
 
 n 
 
 Interest 
 
 of Net 
 Earnings 
 
 interest 
 at 6% 
 
 Going 
 
 Value 
 
 Con- 
 
 struc’n 
 
 Period 
 
 1909 
 
 1910 
 
 $181,5(1 
 
 185,1* 
 
 
 
 .$ 5,000 
 10,000 
 
 $ 46,500 
 53,680 
 
 $.943 
 
 .890 
 
 $ 43,851 
 47,775 
 
 <u 
 
 1911 
 
 188,8] 
 
 
 
 *$ 11,000 
 
 $136,870 
 
 $.840 
 
 $114,970 
 
 d 
 
 1912 
 
 192,5^ 
 
 
 ° g 
 
 4,350 
 
 132,400 
 
 .792 
 
 104,861 
 
 <d 
 
 1913 
 
 196,2-; 
 
 
 ‘u o3 
 
 3,290 
 
 126,950 
 
 * .747 
 
 94,831 
 
 > 
 
 O) 
 
 1914 
 
 199,9^ 
 
 
 a a) "d 
 
 11,440 
 
 120,980 
 
 .705 
 
 85,291 
 
 
 1915 
 
 203,6( 
 
 
 -a % 
 
 rj 4-> jj 
 
 21,090 
 
 113,510 
 
 .665 
 
 75,484 
 
 
 1916 
 
 207,2^ 
 
 
 o 00-s 
 
 32,740 
 
 104,050 
 
 .627 
 
 65,239 
 
 p 
 
 cr 
 
 1917 
 
 210,9'; 
 
 
 ■Jj C 
 
 0^0 
 
 43,580 
 
 95,390 
 
 .592 
 
 56,470 
 
 <u 
 
 1918 
 
 214,66 
 
 
 p 0) CO 
 
 56,030 
 
 85,130 
 
 .558 
 
 47,502 
 
 a 
 
 1919 
 
 218,3^ 
 
 
 
 71,180 
 
 72,160 
 
 .527 
 
 38,028 
 
 "a 
 
 1920 
 
 222,OS 
 
 
 g a ci 
 
 90,680 
 
 54,840 
 
 .497 
 
 27,255 
 
 • H 
 
 1921 
 
 225,71 
 
 
 a c. 
 
 S -p 
 
 108,970 
 
 38,740 
 
 .469 
 
 18,169 
 
 XJ 
 
 1922 
 
 229,3< 
 
 
 O fH 
 <D p 2 
 
 4-> n. 
 
 110,120 
 
 39,770 
 
 .442 
 
 17,578 
 
 o 
 
 1923 
 
 233,0* 
 
 
 128,261 
 
 23,820 
 
 .417 
 
 9,933 
 
 o 
 
 1924 
 
 236,7( 
 
 
 s ^ 
 
 r *-( r! 
 
 136,410 
 
 17,850 
 
 .393 
 
 7,015 
 
 
 1925 
 
 240,4^ 
 
 
 <0 >-h o 
 
 143,060 
 
 13,380 
 
 .371 
 
 4,964 
 
 • rH 
 
 u 
 
 1926 
 
 244,1* 
 
 
 
 149,210 
 
 9,420 
 
 .350 
 
 3,297 
 
 <D 
 
 1927 
 
 247,81 
 
 
 o 
 
 155,250 
 
 5,560 
 
 .330 
 
 1,834 
 
 1928 
 
 251,5( 
 
 
 M-t 
 
 160,600 
 
 2,400 
 
 .312 
 
 749 
 
 *The column f< 
 period, contains me 
 revenue column, he 
 be had by filling oui 
 column headed “Ar 
 have been changed. 
 
 Total Going Value $865,096 
 
 
• P '"d 
 
 a o o 
 OS'S 
 ojsS 
 
 co Fh 
 
 <1) 
 
 a 
 
 CD 
 
 > 
 
 <D 
 
 U 
 
 r—H 
 
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 3 
 
 CT 
 
 CD 
 
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 -4-> 
 
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 Ph 
 
 APPENDIX III. 
 
 Computation of Going Value of The Peoria Water Works Plant. Cost of Reproducing Physical Plant, January 1, 1909, $1,950,000. 
 
 P4 
 
 w 
 
 OPERATING PLANT 
 
 REVENUE 
 
 Private 
 
 Public 
 
 Operating and Investment Charges 
 
 Expenses 
 
 Taxes 
 
 Depreciation 
 
 Interest 
 
 1909 
 
 1910 
 
 1911 
 
 1912 
 
 1913 
 
 1914 
 
 1915 
 
 1916 
 
 1917 
 
 1918 
 
 1919 
 
 1920 
 
 1921 
 
 1922 
 
 1923 
 
 1924 
 
 1925 
 
 1926 
 
 1927 
 
 1928 
 
 $181,500 
 
 185,180 
 
 188,870 
 
 192,550 
 
 196,240 
 
 199,920 
 
 203,600 
 
 207,290 
 
 210,971 
 
 214,660 
 
 218,340 
 
 222,020 
 
 225,710 
 
 229,390 
 
 233,080 
 
 236,760 
 
 240,440 
 
 244,130 
 
 247,810 
 
 251,500 
 
 $47,500 
 
 47,500 
 
 a 
 
 o 
 
 Tl W W 
 o ,rH 
 
 a5 
 
 CL 3 *3 
 
 <3 03 
 
 > 4 * 
 
 £ S 
 
 •rt cd 
 
 & 
 
 S3 
 
 4-3 tf 
 
 m p o 
 a a cd 
 ° u v 
 
 ° o . 
 
 f t 1 
 
 <D O 
 
 in 22 S 
 
 <D O cd <D 
 p o W p 
 
 C u <o-g 
 
 4-5 4-3 O 
 
 $60,000 
 
 61,500 
 
 63,000 
 
 64.500 
 
 66,000 
 
 67.500 
 69,000 
 
 70.500 
 72,000 
 
 73.500 
 75,000 
 
 76.500 
 78,000 
 
 79.500 
 81,000 
 
 82.500 
 84,000 
 
 85.500 
 87,000 
 
 88.500 
 
 $15,000 
 
 15,000 
 
 nO <D 
 
 ° S 
 
 • t-H 
 
 *-i cd 
 
 CD c/1 
 
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 0 CD 
 
 rH ^ ^ 
 
 Ch 4-5 4-5 
 
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 • r-t in h 
 
 4-5 • t- 4 tS 
 
 0 O 
 
 rj M 
 
 P CD ^ 
 in cd r d 
 
 a ^ b 
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 o b 
 
 £ £22 
 ^ g CL 
 
 0 o ^ 
 
 ^ ° 0 
 
 ^ g J-, 
 43 o 
 
 $15,000 
 
 15,000 
 
 a 
 
 o 
 
 in 
 
 • t-H ? O 
 
 .-4 4-5 0 
 
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 0 C/l 4-5 
 
 a*^ 
 a 
 
 a 0 
 
 O 4-5 
 
 g‘o a 
 
 g 2 § 
 
 45 £L 4-5 
 
 S 0 53 
 
 § 'O jb 
 0 ^Tl 
 
 0 ^ 43 
 0 o 
 
 31 a S 
 
 ** a 
 
 1-4 
 
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 33 0 0 
 ^06 
 
 43 cd 
 4-5 in 
 
 $97,500 
 
 97,500 
 
 0 
 
 4-1 
 
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 Td d> 
 
 .2 S 
 
 1-4 cd 
 
 0 m . 
 CL ^ 
 
 H 
 
 b ^ S 
 
 O in 
 
 * 43 *^ S 
 
 2^o 
 
 2 2 w 
 
 45 
 
 W 4-5 dD 
 
 2 a a 
 8'g 03 
 
 ° b 
 
 0 ^ a 
 43 bi5 
 
 ^ g a 
 
 Net Earnings 
 
 $ 41,500 
 43,680 
 
 *125,870 
 
 128,050 
 
 130,240 
 
 132,420 
 
 134,600 
 
 136,790 
 
 138,970 
 
 141,160 
 
 143,340 
 
 145,520 
 
 147,710 
 
 149,890 
 
 152,080 
 
 154,260 
 
 156,440 
 
 158,630 
 
 160,810 
 
 163,000 
 
 HYPOTHETICAL PLANT 
 
 REVENUE 
 
 Private 
 
 Public 
 
 Operating and Investment Charges 
 
 Expenses 
 
 Taxes 
 
 29,000 
 
 38.500 
 49,000 
 60,000 
 
 72.500 
 87,000 
 
 100,700 
 
 116,000 
 
 134,000 
 
 156.500 
 
 177.500 
 
 181.500 
 
 202.500 
 
 213.500 
 223,000 
 232,000 
 240,900 
 249,100 
 
 rtf in m 
 
 O’" 1 ,TH 
 
 - g-a 
 
 O.G S 
 
 CD ^ 
 
 P 4-5 
 
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 .2 * 0 . 
 
 u 
 
 0 
 
 a 
 
 o 
 
 0 
 
 243 ^ 
 
 2 ^ 
 
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 b^ 
 
 in 
 
 53 
 
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 0 
 
 0 
 
 43 
 
 4-5 
 
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 4-3 
 
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 cd 0 
 
 o w 45 
 4-5 
 
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 43 43 « 
 
 4-> 4-i O 
 
 $40,000 
 
 42,850 
 
 45,710 
 
 48,560 
 
 51,410 
 
 54,260 
 
 57,120 
 
 59,970 
 
 62,820 
 
 65,680 
 
 68,530 
 
 71,380 
 
 74,240 
 
 77,090 
 
 79,940 
 
 82,790 
 
 85,650 
 
 88,500 
 
 $ 5,000 
 
 10,000 
 
 73 0 
 o g 
 'u cd . 
 
 0 m rtf 
 
 CL , 0 
 0 
 
 43 
 
 3 45” ' 
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 m m 
 
 O * rHI 
 
 T3 
 
 53 
 cd 
 u 
 
 2 a 
 
 a a 
 
 3543 
 0 
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 < 0 ^ 
 T^ O 
 
 45 <4_t 
 
 53 
 
 O 
 
 0 
 
 0 
 
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 4-> 
 
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 0 'o 
 ±3 0 
 
 Depreciation 
 
 Interest 
 
 O 
 
 m 
 
 2nd 
 
 O 43 -s 
 
 - d ^ 
 
 CD c/3 4-5 
 
 wL-^‘g 
 
 a 0 
 
 0*4^... 
 
 • .—i n4 
 
 2 0 a 
 
 3 0 3 
 
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 4-5 £L 4-5 
 
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 a 0 
 
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 4-5 
 
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 0 
 
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 0 m 
 
 a js3 
 
 53 ^ 45 
 
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 44) 
 
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 Going Value of Operating Plant 
 
 
 Annual 
 Going Value 
 Difference 
 of Net 
 Earnings 
 
 Present 
 Worth of 
 $1.00 with 
 interest 
 at 6% 
 
 Present 
 Worth of 
 Annual 
 Going 
 Value 
 
 Met Earnings 
 
 $ 5,000 
 
 $ 46,500 
 
 $.943 
 
 $ 43,851 
 
 10,000 
 
 53,680 
 
 .890 
 
 47,775 
 
 $ 11,000 
 
 $136,870 
 
 $.840 
 
 $114,970 
 
 4,350 
 
 132,400 
 
 .792 
 
 104,861 
 
 3,290 
 
 126,950 
 
 - .747 
 
 94,831 
 
 11,440 
 
 120,980 
 
 .705 
 
 85,291 
 
 21,090 
 
 113,510 
 
 .665 
 
 75,484 
 
 32,740 
 
 104,050 
 
 .627 
 
 65,239 
 
 43,580 
 
 95,390 
 
 .592 
 
 56,470 
 
 56,030 
 
 85,130 
 
 .558 
 
 47,502 
 
 71,180 
 
 72,160 
 
 .527 
 
 38,028 
 
 90,680 
 
 54,840 
 
 .497 
 
 27,255 
 
 108,970 
 
 38,740 
 
 .469 
 
 18,169 
 
 110,120 
 
 39,770 
 
 .442 
 
 17,578 
 
 128,261 
 
 23,820 
 
 .417 
 
 9,933 
 
 136,410 
 
 17,850 
 
 .393 
 
 7,015 
 
 143,060 
 
 13,380 
 
 .371 
 
 4,964 
 
 149,210 
 
 9,420 
 
 .350 
 
 3,297 
 
 155,250 
 
 5,560 
 
 .330 
 
 1,834 
 
 160,600 
 
 2,400 
 
 .312 
 
 749 
 
 *The column for each plant headed “net earnings”, after the construction Total Going Value $865 096 
 
 period, contains merely differences between the expen secolumn and the private ' ’ 
 
 revenue column, hence does not give the true net earnings, which could only 
 be had by filling out the columns left blank. If this had been done however, the 
 column headed “Annual Going Value, Difference of Net Earning,” would not 
 have been changed. 
 
Appendix IV. 
 
 Map of the City of Peoria, showing Pipe System con¬ 
 nected with the Plant of the Peoria Water Works 
 Company, with Proposed New Feeder Mains. 
 
 On file in City Clerk’s Office. 
 
 95 
 

 
 
 
Appendix V. 
 
 Diagram Showing Population in Relation to Mileage of 
 Street Mains, Number of Service Pipes, and 
 Water Supplied by Months, as Given 
 by Pump Displacement. 
 
 On file in City Clerk’s Office. 
 
 97 
 
Appendix VI 
 
 I 
 
 List of Consumers Furnished With Free Water. 
 
 Estimated Amount of Free Water, 1908, and Value at Meter Rates, 20 
 and 6 cents per 1,000 Gallons, Made and Furnished by 
 the Peoria W 7 ater W 7 orks Company. 
 
APPENDIX VI. 
 
 List of Consumers Furnished With Free Water. Estimated 
 Amount of Free Water 1908, and Value at Meter Rates, 
 
 20 and 6 Cents per 1,000 Gallons, Made and 
 Furnished by the Peoria Water 
 Works Company. 
 
 CITY SERVICE. 
 
 
 Gals. Per Year. 
 
 Amount. 
 
 City Hall . 
 
 . 6,532,500 $ 
 
 443.05 
 
 Patrol House . 
 
 . 900,000 
 
 105.10 
 
 10 Engine Houses. 
 
 . 9,000,000 
 
 1.051.00 
 
 Emergency Hospital. 
 
 . 276,000 
 
 45.20 
 
 House of Correction. 
 
 . 2,700,000 
 
 213.10 
 
 Library . 
 
 . 1,800,000 
 
 159.10 
 
 Lincoln Park. 
 
 . 600,000 
 
 65.96 
 
 Morton Square. 
 
 . 600,000 
 
 65.96 
 
 State House Square. 
 
 . 600,000 
 
 65.96 
 
 Hamilton Boulevard . 
 
 . 600,000 
 
 65.96 
 
 Armstrong Boulevard. 
 
 . 600,000 
 
 65.96 
 
 20 Drinking Fountains. 
 
 . 3,250,000 
 
 650.00 
 
 30 Watering Troughs. 
 
 . 27,375,000 
 
 3,175.50 
 
 Flushing Sewers . 
 
 . 36,000,000 
 
 2,202.00 
 
 Sweeping Streets. 
 
 . 1,000,000 
 
 88.00 
 
 • 
 
 91,833,500 $ 8,461.85 
 
 COUNTY 
 
 SERVICE. 
 
 
 Court House. 
 
 . 4,500,000 $ 
 
 321.10 
 
 Court House Lawn. 
 
 . 600,000 
 
 65.96 
 
 County Jail . 
 
 . 3,600,000 
 
 267.10 
 
 
 8,700,000 $ 
 
 654.16 
 
 MISCELLANEOUS SERVICE. 
 
 
 
 Gals. Per Year. Amount. 
 
 Home of Good Shepherd. 
 
 . 2,820,000 $ 
 
 220.30 
 
 St. Joseph’s Home. 
 
 . 2,800,000 
 
 219.10 
 
 Crittenden Home . 
 
 . 360,000 
 
 72.00 
 
 Guyer Home. 
 
 . 360,000 
 
 72.00 
 
 101 
 
MISCELLANEOUS SERVICE—Continued 
 
 
 Gals. Per Year 
 
 Amount 
 
 Proctor Hospital . 
 
 . 4.462,500 
 
 318.85 
 
 St. Francis Hospital. 
 
 . 6,262,500 
 
 426.85 
 
 35 Churches.. 
 
 ... 4,200,000 
 
 840.00 
 
 1 High School. 
 
 . 1,200,000 
 
 123.10 
 
 16 Grade Schools. 
 
 . 12,800,000 
 
 1,585.60 
 
 Sacred Heart Academy.. 
 
 . 800,000 
 
 99.10 
 
 9 Parochial Schools. 
 
 . 3,500,000 
 
 669.90 
 
 
 39,565,000 
 
 $ 4,646.80 
 
 CITY USES. 
 
 . 91,833.500 
 
 $ 8.451.85 
 
 COUNTY . 
 
 . 8,700,000 
 
 654.16 
 
 MISCELLANEOUS . 
 
 . 39,565,000 
 
 4,646.80 
 
 
 140,098,500 
 
 $13,762.81 
 
 383,000 Gallons 
 
 AVERAGE PER DAY 
 
Appendix VII. 
 
 Peoria Water Works Statistics. 
 
 103 
 
APPENDIX VII. 
 
 PEORIA WATER WORKS 
 STATISTICS. 
 
 Population served by Peoria Water Works plant 
 
 1910 . 73,000 
 
 Population served by Peoria Water Works plant 
 
 1908 . 70,120 
 
 Population of Peoria, 1870, U. S. Census. 22,849 
 
 Total water consumed 1908, gallons.2,171,000,000 
 
 Daily average consumption 1908, gallons. 5,905,000 
 
 Daily average consumption per capita 1908, gallons 84 
 
 Daily consumption for August 9 and 10, 1909, gal¬ 
 lons . 10,000,000 
 
 Daily average consumption for year ending June 30, 
 
 1910, gallons. 7,435,000 
 
 Daily average consumption per capita 1910, gallons 102 
 
 Daily average for month of maximum consumption, 
 
 Maximum consumption for single day, lune 30, 
 
 1910, gallons.‘. 10,688,000 
 
 Total head on pumps maximum, approximate. 315 
 
 Total head on pumps minimum, approximate. 280 
 
 3 Vertical Compound Duplex Worthington Pumps, 
 
 capacity each, 7,200,000 gallons. 21,600,000 
 
 6 Heine 200 h. p. water tube boilers, h. p. 1,200 
 
 Storage reservoir capacity, gallons. 18,000,000 
 
 Length of street mains, 1908, miles. 99.3 
 
 Length of hydrant connections, 1908, miles. 2.9 
 
 Length of 30-inch main to reservoir, miles. 1.0 
 
 Weight of C. I. pipe, 1908, tons. 16,387 
 
 Weight of C. I. special castings, 1908, tons. 396.7 
 
 Number of valves in system, 1908. 1,729 
 
 Total number of fire hydrants, 1908. 1,273 
 
 Total number of services, 1908. 9,040 
 
 Total number of active services, 1908. 9,129 
 
 Total number of meters in use, 1908. 315 
 
 Length of street mains, June 30, 1910, miles. 102.6 
 
 Length of hydrant connections, 1910, miles. 3.0 
 
 Weight of C. I. pipe, 1910, tons. 16,715 
 
 Weight of C. I. special castings, 1910, tons. 404.9 
 
 Total number of fire hydrants, 1910. 1,308 
 
 Total number of services, 1910. 10,239 
 
 Total number of active services, 1910. 8,285 
 
 Total number of meters in use, 1910. 371 
 
 105 
 


 
 
 
 'V 
 
 
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