cent., and there was a general reduction in dwelling-house rates equivalent to about 10 per cent. In 1888 there was a still further reduction to large consumers of metered water. Still further uncalled-for reductions were made in the years 1885,1 1889, and 1890, in the form of rebates upon the annual water bills for the ensuing year. The reduction for 1886 was 6 per cent., and amounted to $43,588.97; that for 1890 was 7 per cent., and amounted to $61,921.17; and that for 1891 was 10 per cent., and amounted to $93,970.43 aggregate loss in receipts and a resulting increase in the debt of $199,450.57.2 an If no reductions and rebates had been made since 1877, it is easy to compute that the net cost of the water-works would have been less than it is by six or seven millions of dollars, and the net debt of the Cochituate water-works would probably have been extinguished. It will hardly be claimed that the saving to the individual water takers during the past sixteen years is a sufficient compensation for the fact that the net cost of the works has been steadily increasing, instead of diminishing, and that we have to-day a water debt of over nine millions of dollars. For the first thirty years the Cochituate water-works, though never self-supporting, were yet managed with a view to the gradual reduction and ultimate extinction of the debt-that is, in the interest of the city as a corporation; but between 1877 and 1891 they were operated for the benefit of the water-takers as a class. During the past four years there have been no rebates or reductions of any kind for the benefit of the water takers; 3 the income for the year 1893-4 was $1,692,159.73; and this 1 The Water Board had increased the rates for 1885, but rescinded this action upon request of the City Council, and after much pressure from prominent water takers. (See Doc. 31 of 1885.) At the close of the year a rebate of six per cent. on the bills for 1886 was ordered, notwithstanding the expressed opinion of the Board that the rates were already too low. This amount, if saved, could have been used for construction, and so much less money borrowed, or turned into the sinking-fund as surplus revenue. Either course would have resulted in a reduction of the net debt by the amount in question. As large loans were issucd every year, these "rebates were practically loans for distribution among the water takers. 3 Reductions have, however, been made in the charge of fire hydrants, which have been reduced to an almost nominal amount ($2 per annum); and no charge is made 152 VALEDICTORY ADDRESS. amount exceeded the total expenditures for maintenance, interest, and extensions of mains, by $186,952.47, an amount nearly equal to the sinking-fund requirements for the year. With the assistance of the profits from the Mystic WaterWorks there was paid into the Cochituate sinking-fund not only the requirements for the year, but about $50,000 in addition. Thus, the water-works, taken as a whole, Cochituate and Mystic, have been for the first time placed upon a strictly self-supporting basis; and during the ensuing year it ought to be possible to make that statement concerning the Cochituate system considered by itself. The next step which should be taken is to effect a more rapid reduction in the debt, and a diminution of the figures indicating the net cost of the works. As it has not been thought best during the past four years to increase the water rates for the purpose of making the works self-supporting, so an increase in the rates will not be necessary for the purpose of reducing the debt; for if no further reductions in rates are attempted it ought to be possible, with the increase of consumption and consequent receipts, not only to issue all the loans necessary for the construction of the new basin on the Sudbury River without increasing the net debt, but to reduce it by annually increasing amounts. It will not be possible to make this reduction as rapidly as if the rates had not been tampered with between 1877 and 1888; but a very considerable reduction during the next five years can still be effected if the present schedules are maintained.1 I will close this brief review of the financial history of our water-works by calling attention to the series of tables in the Appendix relating to the Cochituate Water-Works, which have been prepared at great labor by the City Auditor and As the addi for water used for street-watering purposes or for the public urinals. tional protection afforded in case of fire and the improvement of the sanitary condition of the city are among the main justifications for a public supply of water, it seemed proper that none or nominal charges should be made for water used for these purposes. On the other hand, water used in the public buildings is paid for at the usual rates. 1 These calculations may not hold after it becomes necessary to procure additional sources of supply beyond the Sudbury River. An increase in rates may then be nec essary. his assistants.1 The difficulty of getting accurate and collated information relating to the cost and management of our water-works is very great. The annual reports of the Water Board contain most complete and elaborate accounts of everything concerning the engineering and sanitary aspects of the problem, but almost nothing relating to finances except the receipts and expenditures for the year. The two histories of our water-works-that of Mr. Bradley, covering the period from 1846 to 1868, and that of Mr. Fitzgerald, covering the period from 1868 to 1876 are practically silent in respect to the financial operations of the works. It is not pretended that the tables printed in the Appendix, prepared partly for the occasion and partly at various times during the past four years, are in any sense. exhaustive; but they will at least serve to facilitate the work of inquiry into the results obtained by the city of Boston in its largest public undertaking. SECTION 5. The East Boston Ferries. In 1832 the proprietors of Noddle's Island procured a ferry license from the Mayor and Aldermen, and in 1833 were incorporated 2 as The East Boston Company. This company maintained the ferry for the purpose of developing and selling its lands until 1835, when it was transferred to an unincorporated ferry company. In 1836 the Eastern Railroad bought the control of this latter company, and in 1842 the Eastern Railroad and the East Boston Company became the sole stockholders. The growth of East Boston, as it was then called, stimulated a demand for better ferry accommodations, and in 1852 the East Boston Ferry Company was incorporated.3 This company bought the existing ferry, paying to the East Boston Company and the Eastern Railroad Company $200,000 in stock, an amount representing rather the losses of the previous twenty years than the actual value of the property.1 1 See Appendix, Tables 35 to 45. They do not always agree with the figures given in the reports of the Water Board, but are, I believe, more accurate. * St. 1852, ch. 244. * St. 1833, ch. 152. The charter of the East Boston Ferry Company provided that the Mayor and Aldermen of the city should have the power to fix rates or tolls, but that they should never be made so low as to reduce the dividends below eight per cent. upon the capital invested. There was also a provision for purchase by the city. The capital stock was fixed at $200,000, with the right to increase to $300,000. Two hundred thousand of this was issued at once, as already explained, and in 1853 $25,000 more was issued. The tolls were fixed by the Mayor and Aldermen October 4, 1852. In 1853 the company made money, and declared a dividend; but during that year an opposition company was started and incorporated as the People's Ferry Company,1 with a charter similar to that of the East Boston Ferry Company. Late in 1854 the Mayor and Aldermen fixed the tolls for the People's Ferry Company, substantially as for the East Boston Ferry Company. The East Boston Ferry Company operated what is now known as the South Ferry, and the People's Ferry Company what is now known as the North Ferry. The East Boston Ferry Company prospered in 1854, as during the previous year, and paid a dividend; but these two years, 1853 and 1854, were the only years in which any ferry company to East Boston ever declared a dividend. The People's Ferry Company began operations late in the year, and a ruinous competition between the two companies ensued. During 1855 and 1856 both companies were operated at a loss, and in the latter year both petitioned for an increase in tolls. The Aldermen rejected the petition, in accordance with objections by citizens, who suggested a public subsidy in the nature of a money payment for laying out highways leading to the ferries over the property of the companies. The companies paid no attention to this refusal, and in June, 1856, increased the rates of their own accord to a figure about 40 per cent. higher than the original schedule. In 1857 numerous citizens petitioned the City 1 St. 1853, ch. 422. Council either for the establishment of free ferries, or for a subsidy to the companies sufficient to enable them to reduce the tolls. In 1858 the agreement between the two companies entered into in 1856 was broken, competition again broke out, and the tolls were reduced to figures lower even than the original schedule of 1852. In 1859 the city paid each ferry company $125,000 in cash for certain avenues, wharves, slips, piers, etc., and leased the same at a nominal rental to the companies for ten years; both agreeing to run the ferries for that period at rates to be fixed by the Mayor and Aldermen. Under this agreement the companies renewed operations under the low rates prevailing in 1858 and 1859; but they could make no money on this arrangement, notwithstanding the reduction. in fixed charges through the payment of the subsidy, and in June, 1860, the companies raised the tolls to the original schedule. On July 23 the Mayor and Aldermen attempted to establish the tolls on the basis of the rates obtaining in 1858 and 1859; but the companies paid no attention to this order and petitioned for an increase. In 1862 a subsidy was given to the People's Ferry Company of $5,000, for operating that ferry for four months from June 1, 1862, but in November of that year this company discontinued operations and sold its boats. The city then took possession of the wharves, ships, and other lands of the company which it had bought in 1859, spent $50.000 in repairs, and in 1868 leased them to the East Boston Ferry Company. The People's Company went into liquidation, and the stockholders lost all their capital except a final dividend of $1 a share. 1 In 1866 the people of East Boston, not satisfied with their experience in the matter, procured a charter for another ferry company, the Citizens' Ferry Company; but nothing was ever done with this charter. In 1869 the East Boston Ferry Company started a new line over the slips of the People's Ferry Company, which it had leased from the city. The same year an additional act 1St. 1866, ch. 213. |