Central States Water Works Convention

Central States Water Works Convention

GENERAL NEWS ARTICLES

Conclusion of the Proceedings, Including Paper Read by Philip Burgess on “Engineering Appraisements of Water Works Properties,” Followed by Lengthy Discussion—Address on “Municipal Ownership,” by Hon. W. J. Springborn, Cleveland

Herewith is presented the remainder of the proceedings of the Central States Water Works Association convention held at Breakers’ Hotel, tedar Point on Lake Erie, O., on August 26. On Wednesday morning the principal business was the reading of a paper entitled Some Features of Engineering Appraisements of Water Works Properties,” by Philip Burgess, member of the American Society of Civil Engineers of Columbus, O., followed by a lengthy discussion. Following is a copy of the paper:

Appraisements of Water Works Properties

Last year the speaker had the pleasure of presenting a paper to this Society on the question of water rates, and at that time it was endeavored to show that agitation for adjustment of rates charged for services furnished by municipal water supplies is generally brought about by poor service rendered. Subsequently this contention has been brought forcibly to the attention of the speaker in two problems of readjustment of water rates, the one at Chillicothe, Ohio, and the other at 1 exarkana, Arkansas, and Texas. The Chillicothe case was the tirst water rate case tried before the Ohio Public Service Commission, and was brought about principally because the water company refused to give proper tire service to residence on Carlisle Hill, a comparatively new section of the city, in which is located the distribution reservoir of the water company. The city Council passed an ordinance stating that no payment whatever would be made for any hydrant, umess the minimum pressure at all hydrants was 43 pounds. The water company appealed to the Public Service Commission making this feature one of the several causes of complaint.

The question of adjustment of rates of Texarkana was brought up partly because there were occasional objections to the quality of the public water supply, on account of disagreeable odors and because it was believed that the water company at times used polluted creek water as a source of supply. On account of the features mentioned above, in both instances, the city authorities have taken measures to revise the contracts with the water companies. The problems have required appraisements of the local water properties, and the speaker has in both instances been retained by the city authorities to make the necessary valuations, it is hoped that some of the features brought out in these appraisements may interest this Association. It is generally understood that there are four principal methods which have been recognized as giving an indication of the true value of water works properties, as follows:

True Value of Water Plants

First: A determination of the original or book cost as indicated by actual past investments without allowances for depreciation or appreciations. To the value so determined, for comparative purposes, frequently there should be added the deficits in revenues below all necessary charges incurred during the early history of the plant.

Second: A determination of the probable cost of reproducing new the existing property at costs based upon present nominal prices for material and labor. Such a valuation properly must be corrected for depreciation resulting from the age and use of the plant. A determination of the value by this method includes studies of all values which may properly effect the worth of the plant as a going concern.

Third: A determination of the value of the plant as indicated by. the market value of its securities, especially when there exists a representative market of such securities.

Fourth: A determination of the commercial or comparative value of the plant. Such a value properly would be considered by a tentative investor, especially if he were without detailed knowledge of construction costs. He might very well have a general knowledge of the costs of water works plants, and would make a close study of the property in question relative to the growth and prospects of the community. Such a method, of course, is more commercial than scientific but affords information as to the value of the results obtained by other methods.

While it is perhaps true that the cost of reproduction new, properly depreciated, furnishes the best evidence of the present value of a water works utility, and while it is true that the laws of some states require the use of this method, it is believed that all available methods should be used and all facts considered which may indicate the true value of a water works plant either for purchase or for rate making purposes. Unfortunately the post or books costs of water works properties frequently are not available in reliable form, because the books are not properly kept, especially as regards replacements and extensions. It is not at all uncommon to find no plant account carried on the books and to find no distinction made between maintenance and depredation, or between maintenance and true operating costs. It is the exception to find a water works account in which depreciation is properly cared for. Consequently the engineer, in studying the book or past cost account, frequently is unable to arrive at even a reasonable conclusion as to the true past cost of the plant.

J. C. MARTIN, WILMINGTON, OHIO, PRESIDENT CENTRAL STATES WATER ASSOCIATION.

The Securities Market

Moreover, it is the exception to find a representative market of the securities of water works properties. In the majority of instances where plants have been established for a number of years, the face value of the securities has little if any relation to the cost of the plant, so that it is an unusual instance when this method of appraisement is of very great value. Considerable data are available as to the results of appraisements of water works properties by engineers, who, in the event that they are interested in such matters, keep in their files or libraries, books which contain such values as are published from time to time. Such appraisements are of considerable worth when they are of properties located where conditions of labor and prices of materials and where construction features are similar to those under consideration in making a particular valuation. Frequently, however, such data as to local conditions are not contained in published reports, so that often published valuations are of little comparative worth. On account of the unreliability of other methods of valuation, and on account of the fact that, frequently, laws require appraisements to be made as of the cost of reproduction new, the latter method is the one most frequently used in determining the valuation of water works properties. It is obvious that the method of reproduction new involves many difficulties, because the appraisement entails working from small to very large units composed of many items, the cost of which must be determined in accordance with the best judgment of the engineer, in view of the necessity of working from small to large items any one of which is subject to error, it is apparent that the final result may be far from the correct one. Hence arises the value of the other methods discussed above, when available, especially to confirm the result obtained by the method of reproduction new. However, from the detailed estimate and studies required of the engineer under the latter method, there is apparent a distinct advantage due to the necessarily careful and comprehensive study of local prices and conditions under which the work must be constructed. Such studies, of course, require of the appraiser that he must consider all available facts rather than merely his general exnerience.

Getting at the Value

As previously stated, the cost of reproduction new must be properly depreciated to determine the present worth of the plant. This also requires of the appraiser that he study carefully the life, age, and present condition of the various component parts of the properties, and must, moreover, determine the average life and rate of depreciation of the entire plant as a whole. Subsequently, he may properly assist or confirm his judgment in determining the depreciation and present worth of the plant in question by considering general data available on the lite and depreciation of similar structures published in tables prepared by authors of experience in making utility appraisements. It is obvious that rare judgment and experience are required of the engineer in using such comparative date, because no two plants are composed of the same component parts, and because the proportions of equally depreciable parts vary in different plants. In applying the method of reproduction new to the appraisement of a particular property, it is necessary to assume the beginning of the construction of a comparative plant under the data of the appraisement. It is also obviously necessary to assume that such construction shall be carried forward in a manner humanly possible. From the very nature of the method, it is apparent that the unit prices assumed by the engineer in constructing his imaginative comparative plant, are a very important element of the final result obtained. It is a well known fact that a water works plant is composed of many widely differing component parts, the cost of some of which vary materially from time to time while the costs of other parts are more constant. A large element comprising a water plant is the cast iron pipe and trenches. The cost of the pipe varies with supply and demand, and with the cost of pig iron. The cost of the trenches varies with the depth required for protection of the pipes, with the cost of common labor, and with the character of the material excavated. Such other elements as valves, hydrants, pumps, boilers, etc., are of more uniform cost, so that generally accurate cost data of such materials arc at hand for comparative purposes. Considerable experience and judgment are required of the engineer in arriving at a fair estimate of the cost of reproducing the cast iron pipes. It is customary to base the cost of reproduction on past costs for a period of five years preceding the date of valuation. It may be of interest to note the costs of pipe as testified by the several engineers retained in the Chillicothe case. The speaker, for the city, took up the matter with the United States Cast Iron Pipe and Foundry Co., and learned that quotations of cast iron pipe at Chicago as given in “Iron Age” contain an allowance of about $2.00 per ton for freight from Addyston, Ohio, to Chicago, Ill. The estimate cost of cast iron pipe at Chillicothe, therefore, was obtained by determining the average cost of pipe for the last five years as quoted in “Iron Age” and by correcting this average price by a proper allowance for freight from Addyston to Chillicothe. This matter, of course, was of considerable interest to the members of the Commission, who called in the manager of the local plant of the U. S. Cast Iron Pipe and Foundry Co. to testify as to actual past costs of pipe. It was brought out in his testimony that the cost of pipe is more or less indeterminate and depends upon the stock on hand in the various foundries and on the desire for business as determined by market conditions. Consequently it is difficult to estimate the cost of a large lot of pipe such as may be required for the reproduction of a water system. It was also shown that past costs of pipe, as required for extensions made from time to time, have little value in determining the cost of reproducing new, because frequently such pipes are bought in small lots and not at carload prices. In the following table are shown the estimated reproduction costs of pipe per ton at Chillicothe as given in the testimony of the engineers.

Estimated Cost of Replacing Cast Iron Pipe at Chillicothe

*50 cts. per ton added to figures in these columns to cover cartage.

Little difficulty generally is encountered in determining the cost of labor in a community. In the Chillicothe case, however, it was argued that a large piece of work like the reproduction of the local water plant would cause a scarcity of local labor so that it would be necessary to figure on imported labor at higher cost than local labor. This assumption naturally led to the question of digging the pipe line trenches by machine, a method which is more economical than hand labor on large pieces of work. There was also discussed the question of the practicability of such construction in the streets and especially in those which were occupied by street-car lines. These features are cited simply to illustrate the fact that the reproduction new must be by a method humanly possible, as before mentioned, and also to indicate some of the problems which the engineer must consider in using his proper judgment as to the determination of proper unit costs. They refer strictly to the reproduction of the physical plant. It is, of course, true that preliminary costs such as interest during construction, engineering, supervision, and contingencies must be included and they are generally estimated as a certain percentage of the total cost of reproducing new the physical plant. Such costs frequently are estimated at from 10 to 15 per cent. They should, of course, be determined upon the total cost of reproduction new and not upon the present worth after allowing for depreciation, although the latter method was used by one of the engineers employed in the Chillicothe case. Having determined the total cost of reproduction new, including preliminary costs, the next feature is to determine the proper allowance for deprcc ation. I icre again widely differing results may be obtained by several engineers employed on the same appraisement. It is well established that a determination of the proper allowance for depreciation of a water plant requires that there be made an estimate of the probable life of the component parts of the plant. From the costs and probable life of the component parts, there may readily be determined the average life of the entire plant as a whole. The depreciation fund properly should represent at all times as closely as possible the difference between the investment and present worth of the plant. Moreover, the annual contribution to the depreciation fund placed at compound interest, should be of an amount such that the depreciation fund accumulated during the period of the life of the plant as above estimated will equal the cost of the plant. It is apparent, therefore, that an important element to be considered by the engineer in determining the amount to be contributed annually to the depreciation fund is the rate of interest which such fund may properly be considered to yield. It was argued in the Chillicothe case that such funds in the past had been used for extensions and that, therefore, the rate of interest on the depreciation fund should be considered as that allowed for a fair return on the entire investment. If, however, the depreciation fund is to remain intact, a savings bank rate of interest at from 3 to 4 per cent, may properly be considered as fair. As a matter of interest and showing the difference in the opinions of the appraisers of the Chillicothe plant, S. S. Weyer and J. N. Chester for the company estimated depreciation at the rate of 1 per cent annually; J. W. Alvord, also for the company, an dthe speaker, for the city, at ¾ per cent annually. 1 he speaker computed the average life of the plant at 50.8 years and assumed a rate of interest of 3.5 per cent, compounded annually.

What Constitutes a “Going” Plant

It may be of interest here to recall the attention of the members of this Association to the excellent paper presented last year by Mr. Erickson, Chairman of the Wisconsin Railroad Commission, in which he shows that the average per cent, condit.on, that is the ratio between cost of reproduction new and the present worth of 23 water works plants, as determined by the engineers of the Wisconsin Commission, was 91.0 per cent. The maximum was 94.6 per cent, and the minimum was 84.6 per cent. Having determined the present worth of the plant, by the methods outlined above, the next question to be decided by the engineer is what additions proper ly may be included to give the entire valuation of the works as a going concern. Herein again it will be found, as at Chillicothe, that there is a considerable difference of opinion among engineers as to the method of estimating what is commonly called the going concern value of a water works plant. While the courts have determined that a water plant has a value in addition of its “present worth,” unfortunately, they have not determined how such a value shall be estimated. They have left this for the engineer to determine. In the following discussion three of the methods sometimes used to determine going value will be outlined briefly. The first method is to figure going value as equal to the past cost of developing the income of the present plant during its early history. The books of the water company, where available, generally indicate deficits during the first few years’ operation of the plant. Such deficits between the revenue and total costs of operation, including allowances for interest and depreciation, may very properly be called “development cost” as distinct from “going value.” For comparative purposes the development cost should be included in the book cost of the plant. It properly has no relation to the cost of reproduction new, although sometimes has been included by engineers. The estimate of cost of reproduction new arrived to a logical conclusion brings one to the second method of estimating “going value”; namely, as the cost of developing the income of an imaginative comparative plant exactly like that in question; the construction of the comparative plant to begin on the data of appraisement. This requires one to consider present rather than past conditions.

Value of the Physical Plant

A third method of computation has been indicated by the courts to be a measure of the added value of the physical plant due to the fact that it is a going and not a dead concern. This would seem to be on the basis that the “present worth” of the physical plant may be considered greater than that obtained from the cost of reproduction new corrected for the usual allowance of physical depreciation, and that the present value of the plant is more nearly that of the cost of reproduction new. In other words, it is recognized that the physical plant may have a value to the company greater than its depreciated reproduction cost, because the plant may be just as capable of giving first-class service to the public as it would be if it were absolutely new. This theory has been carried as far by some engineers as to lead them to say that the value of a plant for rate making is the cost of reproduction new, and not the present worth as obtained by making allowances for depreciation, and adding thereto a certain amount to represent the going concern value estimated as a separate distinct item. The three methods of estimating the increment of value due to the fact that a plant is a going concern, as outlined above, have all been discussed many times in engineering publications, and all were argued in the Chillicothe case. They differ widely in principal and frequently, also, in the results obtained. It is apparent that there is bound to be much difference of opinion and considerable variance in engineering appraisements until this matter may have been properly threshed out and a deciding opinion obtained from the courts instructing engineers definitely how this element of value shall be determined. In view of the greatly differing methods of approaching the appraisements of water works properties, it is not very remarkable that published results of such appraisements have but little value for comparative purposes unless accompanied by considerable detailed description relative to the manner of procedure in making the valuations and as to local conditions. Such costs may properly be compared on the basis of (1) cost per consumer, (2) cost per foot of mains, and (3) cost per ton of cast iron pipe mains. Cost date relative to these features, for comparative purposes, should be reduced to a common basis of average length of cast iron mains per consumer. The following average costs of six small water plants as given in Volume 4, Reports of Wisconsin Railroad Commission, page 285, may be of some interest and value; (l) Cost of consumer, $162.88. (2) Cost per foot of mains, $1,841. (3) Average length of mains, per consumer, 90.1 ft. In us.ng these costs for comparative purposes, it should be noted that they are based on Wisconsin conditions where trenches are about six feet deep; also, in part, on costs of cast iron pipe during the years 1906-1907 when pipe was selling for around $35 per ton. In the report of the appraisement of the water plant at Freeport, 111., (Ref. Engineering & Contracting; Vol. 38, Page 368j are shown the following data relative to the average value of the water works properties of twenty-seven cities, of population varying from 4,000 to 40,000.

Central States Water Works Convention

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Central States Water Works Convention

GENERAL NEWS ARTICALS

The Seventeenth Annual Convention of the Central States Water Works Association was held at the Breakers’ Hotel, Cedar Point on Lake Eric, Ohio, on August 26, 27 and 28, 1913. Wheeling, W. Va., was selected as the place for meeting in 1914, the dates to be announced hereafter. Officers were elected as follows: President, J. C Martin, Wilmington, O.; vice-president. F. W. Collins, Manistee, Mich.; treasurer, A. W. Inman, Massillon, O.; secretary, R. P. Bricker, Shelby, O. State vice-presidents : Charles Londick. Three Rivers, Mich.; James W. Wilkinson, Bellaire, O.; D. G. Brown, West Virginia. Executive committee: H. L. Williams, Cudington, Mich.; C. W. Wiles, Delaware, O.; W. C. Davidson, Charleston, W. Va. The finance committee is to be appointed later.

The convention was called to order at 2 p. m. on August 26, by President J. C. Beardsley, of Cleveland, O., who said :

Gentlemen—This organization is intended to be one for the accomplishment of the objects that water works people are seeking, whether these be in the line of needed legislation, the dissemination of information, or whatever they may be. All water works men should “get the habit” of looking to the organization as a central source of help in time of need. A superintendent of my acquaintance gave me as his reason for not joining the Association that he was in politics and he did not know what minute his head might be cut off. I told him that that was all the more reason why he should join and assist in creating public opinion that would make it imperative that the legislature pass laws that would put a stop to that condition of affairs, or if necessary that the public opinion we now have of home rule in Ohio he brought to bear on the city councils and influence them to pass such legislation. There was a time when public service companies thought that they had to buy legislation; but that time has gone by. Let us hope never to return; and in view of the developments that we have witnessed in the last few months, both in national and State legislatures with regard to lobbyists, it is more than ever apparent that if you want legislation you have to show the legislators that you have public opinion behind you. The only way in which you can do that is to first have your own opinion crystallized in an organization. This is essentially an age of organization. When we want information about any particular branch of industry or trade we go to the organization that dominates that trade and get that information to discover what the public opinion is in their line. When you come right down to the last analysis you do not want one class of legislation for companies and another for municipal plants; their interests are identical when you come to analyze them. I want the members of this organization to be thinking this thing over so that on the day of our final meeting here they will be in a position to give to the incoming President an idea as to the policy or policies that they want followed out this coming year with a view to increasing the growth of the organization and increasing its influence. The American Water Works Association at its meeting in Minneapolis in June last adopted a constitutional amendment which provides for the organizing of chapters, or for the taking of local organizations already formed, as chapters. These are formed on the basis, in the first place of different branches of the water works business, as for instance, bacteriologists. accountants, chemists, engineers, in short, all of the various subdivisions of the water works business; and they are also contemplated geographically so as to take in existing organizations like this one and the New England. and the various State societies. It is intended to admit members of existing organizations into the American Water Works Association as full members without the payment of entrance fees. Their dues to their own members will have to be the same as the dues of the American Water Works Association. Such a scheme would raise the dues in this Association from the present amount of two dollars to five dotars a year. They contemplate the holding of separate meetings by the chapters at their own option, each chapter to elect its various officers who would have the same powers they now have in their own local organization, subject to the constitution of the American Water Works Association. The expenses of the chapters would be paid by pro rata allotment of dues that were paid by each of the chapters, this allotment to be made by the Finance Committee of the American Water Works Association. I am not prepared at present to say which course is best for us. Mr. Bartow will be here to-morrow to give us some idea of the proposition of the American Water Works Association, and we ought to be prepared to give him a respectful hearing. I believe Mr. Wiles, of Delaware, has something to say to us on this matter.

C. W. Wiles, Delaware, Ohio.—I did not come here to say anything. 1 did not come here to talk to you; but the president has suggested some lines of thought that are of value to us. I am not sufficiently informed regarding the action taken by the American Water Works Association at Minneapolis to know what the proposition was regarding the affiliation of these various associations. That probably will be more fully developed at the time that Mr. Bartow delivers his address to-morrow. I think well, however, of the suggestions and believe them worthy of consideration of this Association, to see whether we can better our condition any by being affiliated with the American Water Works Association. I have been a member of the American for many years, probably some fifteen or eighteen years; and I find that as a rule the papers and discussions at the American Water Works Association are more adapted to the larger plants than they are to those represented in the Central States Water Works Association. We little fellows do not get as much consideration from the American Water Works Association as we do in our own Association. The Central States Water Works Association was organized primarily for the benefit of the smaller plants throughout this section of the country; and we feel that they have received more benefit from the discussion and papers at the conventions of this Association than they have received where the larger plants predominate. As to the matter of change of superintendents in the municipal plants, especially in the larger ones throughout the State, that has been a subject of concern to all water works men. It is a fact that plants municipally owned make it a practice to change the management with every administration ; and while the laws of Ohio are such we know that the Chief of Police or Chief of the Fire Department cannot be removed except for cause; yet the superintendents or managers of water plants are changed at will of every new administration. At least, gentlemen, in the State of Ohio this condition of affairs exists. The water plants are one of the most important parts of the municipality and should be guarded more carefully if possible than even the fire department chief or chief of police. It is a fact that the competent man who has been in charge of a municipal plant should be retained while his services are needed and not changed at every new administration. I hope that the State of Ohio some day will look upon it in that light and that the legislature will provide means of retaining in office all managers of water plants who are competent, faithful and experienced, thus saving money to the municipality by having such men in charge of the plant. The great benefits that are derived by the water works men who attend these conventions are not so much from the papers that are read and discussions at the meetings as from the associating with our fellows in the same line of business and endeavor, the opportunities for exchanging views and asking questions. Every water works man knows that he has problems which some other fellow has already solved, and bv closely questioning the other fellow this valuable information is brought out. I have been in the business for nearly thirty years and I know that every time I meet an old water works man I pick up something new, and thus the chief value of these associations in the meeting with other water works men and learning from the experience of others which prove of benefit to us all.

President Reardsley: Mr. Martin, we would like to hear from you a little on the subject of affiliation; what do you think about it?

Vice-President J. C. Martin. Wilmington: Mr. President and gentlemen of the Association, of course this is a new matter to me, as I did not attend the meeting of the American Water Works Association this year. I have not thought over the subject to any considerable extent, only since the matter has been brought up here in fact; but it strikes me that it would probably be well for this Association to become a chapter or part of the American Water Works Association ; and my reason for suggesting the advisability is this: If our Association was a large association composed of three, four or five hundred members, so that we could stand fairly on our feet and protect ourselves and be recognized as a power, then I would be rather jealous of surrendering to the larger association and becoming part of it; but that unfortunately is not our condition. We are not large in numbers, we are scattered over several States; we have no definite working organization in minute details, and hence we cannot be of the benefit to our membership that we otherwise would be. Now to make myself plain, it is like this: Scattered as we are and few in number, if there is a matter of importance along a certain line to be developed and committees appointed, our call for help might not be adequately responded to, and we could not secure the benefit that a National association would give us. Then there is something in a name to everyone, and to some people there is a great deal in a name. To be Chapter of a National Association sounds a little bigger than it does to be the Central States Water Works Association, because you then fix your identity with an organization that is established ; you receive the benefit of its committees, of its bulletins, of the experience of the engineers who belong to it, who if called to respond to an appointment of members of committees of the national association Teel that they must respond, and will thus be of service to the individual members of this body. We are met with this proposition in the American Water Works Association that it comprises the entire United States, and of course its meeting places are varied and at great distances at times from some of the members. Now, if we are a Chapter of the American Water Works Association we could call on members of the American Water Works Association to give us advice and to address us along technical lines and be of benefit to us in that way; and for that reason I think that it would be an advantage to us: but of course these are only matters for thought. After we have heard what the delegate from the American Water Works Association has to say we can make up our minds what, as members of the Central States Water Works Association, we can best do for our Association and for its members individually. With reference to legislative matter I think our President has well suggested the need of proper legislation. Some utilities fought the public service commission idea at first; the railroads were opposed to it until it was tried out in the national government in the Interstate Commerce Commission, and found to be a benefit to them and a protection from the demands that were made upon them sometimes of an unreasonable character. So that in this State, without any opposition at all. a Railroad Commission was established long before it was extended into the Public Service Commission. I know of one Association at least where it was discussed for two or three years before the incoming of the Public Service Commission and it was held that it would be a benefit to have such control exercised over them. Of course in this State the original law is only a forerunner of something that should be better. There is an evolution in all things, especially in the making of laws, and that which was at first crude in time will ‘be better. The last Ohio legislature enacted what was known as the public utility law instead of the public service law; in some respects it is an improvement over the old law. yet it does not go as far as the Wisconsin law, the California law, or the Indiana law that was enacted about the same time our legislature was in session. These laws are more progressive and afford the utilities more protection than our Ohio law does. Our law I think would have been modeled almost exactly after the Wisconsin law but for the fear of the home rule proposition. I called upon the State Auditor to see if there could not be some change effected with reference to the recognition of vouchers of expenses of superintendents or delegates from water works departments of municipalities attending these meetings and carrying back new ideas in regard to water works practice, etc., of value to the people of their respective communities. But the theory seemed to be that retrenchment was the order of the day and there must not be anything done in the way of a general law that would cause expense or would interfere with local home control, but that all such matters must be put up to the home body. So that it was impossible to get the support of the accounting department to the enactment of a law that would permit of such a thing. Perhaps if we had the American Water Works Association behind us we might induce them to modify their former ruling with reference to permitting delegates from municipal plants to attend these meetings. 1 think that in future sessions of the state legislature these matters will be worked out, and that it is the duty of this Association to carry on a campaign of education along this line, and that with the co-operation of all of our members it will ultimately result in the accomplishment of this matter. I feel that our organization should not simply die for lack of interest, but that we should use our individual efforts to bring into it new membership and extend its usefulness and influence so that we may obtain more recognition from the powers that be. If we all put our shoulders to the wheel the Central States Water Works Association, whether it be a branch of the American Water Works Association or independent, will advance upward and onward along the highway to success. (Applause).

President Beardsley called upon Mr. G. C. Smith, of the Hersey Mfg. Co., Columbus, Ohio, to make a few remarks:

G. C. Smith, Columbus, Ohio:—I am not a members of the Association, simply a supply man; but I can tell you something about the new West Virginia Public Service law that was enacted within the last few weeks so far as it refers to meters. The legislature of West Virginia on August 15th, 1913, passed a Public Service Commission law applying to electric, gas and water plants, both municipally and privately operated. The general provisions of the law so far as they refer to meters are as follows: the Public Service Commission appoints inspectors to pass on all meters in the State, electric, gas and water. Any meter that tests two per cent or over fast shall be corrected at the expense of the public service utility, either municipal or private. Any meter that tests three per cent, or more slow shall be corrected at the expense of the consumer who calls for the test. Every meter now in service shall he tested and passed by the State Inspector within a period of two years from date of this Act (August 15, 1913). Any consumer who is dissatisfied with the reading of his meter either gas, electric or water, shall call for the public test. All meters tested by the State inspector shall be sealed with the International Seal Knot protector, and if tills seal is opened by a consumer unauthorized he shall be liable to either fine or imprisonment in the penitentiary; but if a meter stops in service the public service corporation, either municipal or private, shall have the privilege of taking the meter out, breaking the seal and repairing it and before replacing said meter in service he shall call for a test by the State Inspector who shall test said meter, seal it, and the meter shall then be replaced. Each meter shall be tested on a standard testing machine approved by the bureau of standards of the different States and the federal government. Every new meter that comes in shall he tested first by the State Inspector before being set, sealed, and applied as needed with the seals unbroken. That is all I know about the present law except that each municipal or private plant has to report the number of meters in service, the kind, the tests that it has passed, and what kind of meters they are buying at the present time, size, makes, etc. They are to report the character of service performed by each and any meters being found that do not comply with the State law shall be returned at the expense of the meter companies and new ones furnished free of charge at the cost of the meter companies. They test them on full stream, 1/4-inch, 1/8-inch, and 1/16-inch; nothing mentioned about 1/32-inch.

President Beardsley:—I would like to hear from any other States represented here. I see Mr. Williams of Ludington here, and I think he can tell us something about matters in his State of Michigan.

H. L. Williams. Supt., Ludington, Mich,:—So far as the talk goes about this Association joining the American Water Works Association I think that before you do that you should think it over carefully. I am a member of the American Water Works Association, joined them in 1893 or 1894. It has not much in common with the smaller water works plants, but is more of interest to the larger plants. 1 joined this organization for the express purpose of getting in touch with the managers of smaller plants that I have more in common to talk about. I would feel at liberty to write our members here about anything that came up in our meetings here that I would want them to help me out on. No one ever writes to me who does not get all they ask for. I will qualify that by saying that several years ago I was getting a great many letters of inquiry, and it struck me that I did not get the same proportion of replies to letters that I wrote; so I commenced Keeping tab. If any of you people ever write me a letter and do not get any response just look over your files and see if you have not neglected to answer my letters. That is the only exception I make as to not answering letters; because I will give any member any assistance I can with reference to this work. The American Association work is interesting, and if any of us ever arc fortunate enough to get in charge of a large plant it prooably would come in very handy and he quite valuable to us; but they do not know in the large plants anything about our special difficulties any more than we do about theirs. I was fortunate to be very courteously received by the superintendent of a large plant who showed me around and I asked him what he would do if he were called up in the middle of the night to repair a big break-down and he replied that he would tell them to go to a very warm place. He expressed surprise that the superintendent of a plant was expected to attend to such minor details. He finally admitted that there was not very much in common between the big fellow and the little fellow. As far as the public utility laws are concerned, Michigan has no such law. The intention is that the State Board of Health shall undertake the work of inspection of water works. We have all received notice that within sixty days we must file detailed plans of our water works systems. Just how deep they want to go into it I am unable to find out. I do not know that I have anything further to offer.

President Beardsley:—Along the line of affiliating with the American Water Works Association, it seems to me that we would not lose the advantage we now have of possessing an association of the smaller plants. These chapters will necessarily be made up of all the plants in certain sections and the same people would still retain their membership in the Central States Water Works Association, for instance. Our make-up would be identically the same as at present, the same people would get together. The advantage that we would get would be the prestige or influence that would come from our being a part of the national association. There is a little question in my mind whether that would be of much advantage in getting legislation from our State legislatures, hut possibly we would accomplish some of our objects better by reason of one being connected with a large national society. When you go to your State legislature of course the things that you have to do is to impress upon them that you represent the public opinion of your own section; you have to show them that you have the people of your own locality behind you.

C. W. Wiles, Delaware, Ohio: This Chapter matter is of course a pretty difficult subject to discuss just now. After Mr. Bartow gives us his talk to-morrow we will he better advised. Possibly there will be something in it that will be of advantage to us. I do not know whether it is the intention for the chapters to hold special meetings the same as we are now holding, or whether we are simply expected to be a subdivision of the national association and under their supervision. I am sure I will gladly listen to what Mr. Bartow has to say.

President Beardsley:—In that connection I would say that the constitution of the American Water Works Association as amended provides that if we elect to become chapters of that Association all of our members become by that act members of the A. W. W. A. without the payment of any other fee. The dues would be the same as the dues in the American; we would increase the dues that we pay. Our dues are now only two dollars, while the dues of the American are five dollars a year.

Mr. Wiles:—Besides, you would get the annual report of Proceedings of the American Water Works Association, which is a very valuable volume.

President Beardsley:—Yes, we would get all of the publications of the American Association. Each chapter would hold meetings at its own option, and elect its own officers; the presiding oincer of a Chapter would be a vice-president of the American association. The papers that would be read at the local meetings would be published in the Proceedings of the American Association. That would relieve us of all the work that we now have in getting up our Proceedings; all that sort of thing would be done by the National association. The income would be a certain allotment of dues that would be paid by each Chapter, the remaining portion to be paid over to the American Water Works Association. I do not know all of the details. I doubt very much if Mr. Bartow will know just how that thing is going to be worked out; in fact, I think the whole thing is to a degree experimental that we will have to try out the proposition and see what legislation is necessary to put it into the best effect. If there is no further discussion on this I think that we are now ready for the reports of officers and committees. Is the Secretary ready?

Secretary’s Report

Respectfully submitted,

R. P. RRICKER, Secretary.

Shelby, Ohio, Aug. 20, 1913.

Treasurer Inman—My reports correspond exactly with the secretary’s report.

Mr. Martin—I move that the reports of the secretary and treasurer he referred to an auditing committee to be named by the chair. (So ordered.)

President Beardsley—I will appoint as auditing committee to report at the closing session of this convention, Messrs. Londick, Wiles and Schichler. Are there any committees to report? If not.it is the painful duty of the chair to announce at this time the death of one of our oldest members, and one of the most active supporters of our association, who always attended all of our meetings and for whom we all entertained feelings of the most friendly regard. I refer to A. B. Young, of Kent, O., who expired very suddenly and very unexpectedly to me. The last time I saw him he seemed to be in the most rugged health.

Mr. Messer-He died as the result of an operation.

President Beardsley-I will name as a committee to prepare suitable resolutions on the death of Mr. Young, Messrs. Inman, Martin and Wiles, and will request them to report at our closing session on Thursday morning. Is there any further business before this meeting? Has anybody anything that they wish to bring before the convention at this time?

Secretary Brickcr—I have provided at the request of a number of members a question box. When I first started to attend these association meetings the question box was the real thing. I want to say to you frankly that I derived more benefit from the question box than I did from all the balance of the proceedings of the association, because at that time I was not familiar with the water works business, and when I rubbed up against men like Mr. Wiles and Mr. Inman and some of those fellows that had been in the business a long time, and asked them about anything they could tell me and tell me so that I could understand it; for that reason I have put down “question box” on to-morrow’s program, and have written to a number of people and told them if they had any questions that they would like to ask, to be sure and mail them to me or bring them to the convention.

Second Session Wednesday Morning, Aug. 27

President Beardsley, having gone to Sandusky to escort one of the speakers of the morning to the point, in his absence at the opening hour VicePresident Martin called the convention to order, and after calling attention to the proposed excursion to Sandusky for the afternoon as the guests of the Sandusky water works people, said:

“As Mr. Springborn, the first speaker on our program, has not yet arrived, we will take up the next paper, by Mr. Burgess. This paper becomes of great interest to all utilities, for the reason that the progressive movement in the matter of the regulation of utilities is a fair return upon money actually invested. Upon that theory the general government have provided for valuations of all the railroads of the country, and in the utility bill passed by our legislature they provide for valuations of all utilities other than railroads in the State of Ohio; and in fact, almost every utility bill adopted by any State provides for a physical valuation of the utility, the object and purpose being that the rate charged to the customer and the income that you arc honestly entitled to should be based upon the money actually invested. For what reason the physical valuations of our properties, speaking from the standpoint of Ohio, becomes a very important factor to us in the future, because upon that will be based our stock and bond issues, our rate return; and while some of us in our particular line of business would hate very much to see water squeezed out of the proposition, yet speaking financially, that is what it means. Of course a water plant without any water would be a very poor proposition (a voice: “Very dry!”) Yes. Now we have with us this morning Mr. Burgess, of Columbus, who has made a special study of the valuation of utilities; and he is here to talk to us upon this point, which is of general interest to us at all times, and owing to particular conditions now developing is of peculiar interest to all of us just at this time. I take great pleasure in introducing to you Mr. Burgess, of Columbus, O.

Further proceedings will appear in next issue.

List of Registered Attendants

Joseph C. Beardsley, Cleveland, O.

R. p. Brieker, Shelby Water Co., Shelby. O.

H. L. Williams, Supt., Ladington, Mich.

Kdw. W. Rhode, Sec. Water Board, Sandusky, O.

W. C. Davidson, Supt., Charleston, W. Va.

L. J. Wagar, City Engineer, Sandusky, O.

W. Croncnwett, Supt., Sandusky, O.

John Cripps, Eagle White Lead Co., Cincinnati.

Wm. T. Birch. Hill Pump Valve Co., Chicago.

Wm. A. Fleig, Camon Meter Co., Newark, N. J.

Chas. Lendick, Supt., Three Rivers, Mich.

Geo. J. Fischer, Modern Iron Works, Quincy, Ill.

H. L. Monroe, Supt., Pontiac, Mich.

Dick Dewey, Commissioner, Pontiac, Mich.

H. J. Putnam, Detroit, Mich.

J. A. Kiewel, Farnan Brass Works, Cleveland.

Clay J. Smith, Farnan Brass Works, Cleveland.

J. H. McCormick, H. Mueller Mfg. Co., Cleveland

Grace Hanick, Plymouth, O.

A. H. McAlpine, Hersey Meter Co., Columbus, O

Mrs. A. H. McAlpine, Columbus, O.

Miss Jean McAlpine. Columbus. O.

Mrs. L. Brightman, Columbus, O.

Daisy Hanick, Plymouth. O.

W. H. Luckett, Thomson Meter Co., Indianapolis

Mrs. J. C. Beardsley, Cleveland, O.

Wells K. Ringe, Cleveland, O.

Ida MacPollock, Cincinnati, O.

C. K. Strickler, W. W. Strickler Bros, Columbus

W. C. Nusscr, Supt., Findlay, O.

Mrs. W C. Nusser, Findlay, 0.

W. J. Scroggins, Supt., Wheeling, W. Va.

Mrs. W. J. Scroggins. Wheeling, W. Va.

G F. Nesser, Supt., Kent, O.

C. W. Wiles, Supt., Delaware, O.

W. T. Davidson, Chief Engineer, Delaware. O.

F. B. Mueller. Mueller Mfg. Co., New York.

J. C. Martin. Pres., Wilmington. 0.

Douglas A. Brown. Official Reporter, Cincinnati

W. F. Schichler. Oberlin, O.

F. L. Weaver, Columbus, O.

John W. Busseer, Supt., Middletown, O.

J. W. Cook, Mansfield, 0.

A. Koch, Sandusky, O.

O. C. Smith, Hersey Mfg. Co., Detroit. Mich.

J. C. Pearson, National Meter Co., Cincinnati.

Taylor Kunsmand, Newark, O.

A. W. Inman, Supt., Massillon, O.

T. C. Wickeson, Jackson, O.

F. W. Collins, Supt., Manistee, Mich.

C. A Waal, Pres., Manistee, Mich.

A. L. Holmes, Grand Rapids, Mich.

Philip Burgess and Mrs. Burgess, Columbus, 0.

Edwin H. Ford, Ford Meter Box Co., Wabash, Ind.

J. W. Wilkinson, Supt., Bellaire, O.

O. A. Wilkinson, Globe-Wernicke Co., Cincinnati.

Lee Dinkel and wife, Glauber Brass Works, Cleveland.

Mrs. R. P. Brieker, Shelby, 0.

T. C. Clifford, Gen. Agt. Pittsburg Meter Co.

W. J. Springborn, Direc. Pub. Service, Cleveland.

L. A. Tonkel, Supt., Alliance, O.

A. I. Fischer, Glauber Brass Works, Cleveland.

C. P. Jaeger, Cleveland, 0.

Jerry O’Shaughnessy, Columbus, O.

Dr. Edward Bartow, Director 1ll, Water Survey, Urbana.

T. F. Hines, Cleveland, 0.

EXHIBITS

The Gamon Meter Company, Newark, N. J., represented by W. A. Fleig, showed a line of its meters.

The Hill Pump Valve Company, Chicago, Ill., represented by W. T. Birch, showed a complete line of rubber pump valves.

John Cripps, of the Eagle White Lead Company, Cincinnati, gave the boys a souvenir in the shape of a memo, book and pencil.

The Ford Meter Box Company, Wabash, Ind., represented by Edwin H. Ford, president of the company, showed a line of literature and exhibit of parts of meter boxes.

The Modern Iron Works, Quincy, Ill., represented by George J. Fischer, president; meter boxes, D-B-M wireless electric pipe locator, automatic flush tank regulator, curb boxes, patent top for Buffalo box.

W. W. Strickler & Brothers, Columbus, 0., showed their Strickler ratchet pipe cutter, which has only been on the market now about 10 months; it cuts up to 30-inch pipe with a ratchet. Represented by C. K. Strickler.

Among others in attendance were J. A. Kiewel and Clay J. Smith, of the Farnan Brass Works, Cleveland; Lee Dinkel, of the Glauber Manufacturing Company; J. H. McCormick, of the H. Mueller Manufacturing Company, Cleveland; G. C. Smith, Hersey Manufacturing Company, Detroit, Mich.; J. C. Pearson, National Meter Company, Cincinnati; A. L. Holmes, Grand Rapids, Mich.

The H. Mueller Manufacturing Company, Decatur, Ill., and New York City, displayed quite an elaborate exhibit, consisting of three tapping machines, meter test, curb boxes, machine for filling street sprinklers, full line of brass goods and calking tools, tops for Buffalo boxes. This exhibit was the more appreciated because it was the first that this well-known house has had at the Central States conventions for several years past. F. B. Mueller attended.

The Thomson Meter Company, represented by Captain J. C. Beardsley, showed a Lambert meter which, instead of the regular brass top, was fitted up with glass sides so as to display the working of the interior mechanism in operation, operating here on an orifice of 1/64 part of an inch at 35 pounds pressure. In addition to Mr. Beardsley, the familiar countenances of H. J. Putnam and W. H. Luckett radiated smiles as usual. Putnam was never known to look sour.

Notes of the Convention

On Wednesday night, at the Hotel Breakers, the manufacturers’ representatives gave a dinner to the active members and their ladies which was an enjoyable function. There were more or less humorous speeches by Mr. Martin, vice-president of the association; Fred Mueller; Bradley, of the National Meter Company, Chicago; Lee Dinkel, of the Glauber Brass Works; Tom Clifford, of the Pittsburgh Meter Company, and Captain Beardsley, president of the Central States Association.

Wednesday afternoon was occupied by an excursion to Sandusky, where the members and guests were received by the Sandusky water works officials and taken in automobiles to the filtration plant, the Soldiers’ Home and other points of local interest, the Kueberstang brewery, the Hummel champagne plant, with full permission to sample the products of the two latter places, and were generally entertained by Robert J. Wagar, city engineer; Edward Rhode, secretary ot the water board, and his honor the mayor of Sandusky. Owing to his wife having been struck by lightning the night before, Mr. Cronenwett could not be present.