CONTENTS OF SEC. V: PART II. WATER SUPPLY FINANCE. I. COST AND Revenue of the CROTON SYSTEM, TABLE Financial Summaries. I. FINANCIAL SUMMARY BY CONSTRUCTION PERIODS, II FINANCIAL SUMMARY BY YEARS, III. FINANCIAL SUMMARY, 1832-1849, VI. DISBURSEMENTS FROM MISCELLANEOUS RECEIPTS FOR CON- VII. DISTRIBUTION OF DISBURSEMENTS, Earnings. 555 556 559 558 VIII. ANNUAL AND TOTAL RECEIPTS FROM CROTON WATER XI. DETAILS BY SERIES OF ALL WATER BONDS ISSUED TO П. TABLES EXHIBITING THE COMPARATIVE COST OF A NEW WATER TABLE XII. BOND ACCOUNT AND ANNUAL CHARGES FOR FORTY Years PAGE 578 580 SYSTEM, . 531 XIII. COST AND REVENUE OF CITY SYSTEM AND RAMAPO CON TRACT, 582 XIV. COMPARATIVE DEFICIT AND PROFIT OF CITY SYSTEM AND * 583 III. THE FINANCIAL RESULTS OF PUBLIC, AS COMPARED WITH PRIVATE I. UNITED STATES AND CANADA, Ratio of Public to Private Water Companies, Averages of Total Rate per Family, Averages of Total Cost per Family, II. ENGLAND AND WALES, III. OTHER NATIONS, 584 584 IV. CONSTITUTIONAL REGULATION OF MUNICIPAL WATER FINANCES, 597 V. STATUTORY HISTORY OF THE RAMAPO COMPANY AND LEGISLA TIVE OBSTACLES TO NEW YORK'S ACQUIRING AND During a term of sixty-seven years, from January 1, 1832, to December 31, 1898, the City of New York made a capital investment of $86,359,562.09 for the construction of water works. It expended during that period for interest charges, maintenance and operation $66,544,245.38, the aggregate earnings were $88,017,329.72, and the total net profit was $21,473,084.34. An analysis of these results shows that for a period expenses exceeded revenues, that for another period the works were self-sustaining, and that for a considerable time the plant has been a financial investment of the very first class, having paid off all deficits incurred in the early years of its history and of late having annually yielded a large net profit. The water properties of this City now combine the most favorable conditions possible, namely, large and progressive earning power, minimum pro rata operating charges, decreasing capital charges, increasing consumption and assured demand. Up to 1849 the City had invested $12,000,000 in a water plant, and the result was a heavy deficit. Another million added a little to the annual expense account, but more than doubled the earnings, producing a small profit, and stopping the further growth of a deficit, which in 1855 was nearly $6,000,000. Between 1855 and 1881 the outlay of over $20,000,000 more piled up an enormous interest charge, but the earning power also increased, and by 1881 there was a surplus of about $1,000,000. The investment of some $33,000,000 was further increased by $4,000,000, and this increase of 12 per cent. in the investment was accompanied by about 20 per cent. increase in the capacity of the works. The gross yearly revenue increased in six years from $1,968,000 in 1883 to $2,729,000 in 1889. The period from 1885-1889, inclusive, earned a revenue from water rates of $12,676,558, netting a profit of $4,510,000, after paying between 5 and 6 per cent. interest on an investment of $37,382,000. As the result of these successive investments, the Croton system had a daily capacity in 1889 (Table II.) of 115,000,000 gallons, and was earning an annual net profit of over $786,000, after paying all expenses of maintenance and operation and interest upon 62 millions of the outstanding bonds, more than 24 millions of additional bonds having been issued between 1885 and 1889 for new construction. During this period, from 1885 to 1889, owing to the need of the City for water, the system was strained to the uttermost limit, and, indeed, was seriously injured, so that it has not since been considered safe to permit a daily flow of more than 90,000.000 gallons through the old aqueduct, Present Conditions and Potential Earnings. Anticipating that the maximum capacity of the Croton system, as it then existed, would be reached in 1889, the City commenced a third investment in waterworks in 1885. Between 1885 and the close of 1898 about $50,000,000 was invested in enlargement of the water system, which with a further outlay of about $15,000,000, will add from 260,000,000 to 290,000,000 gallons daily to the delivery capacity. Comparing the annual charges of 1884, when the capital investment in the system of the second period was finished, with the annual charges for the year 1898, when the capital investment for the third period was completed, we find the excess of annual charges in 1898 over those of 1884 to be about $1,310,000. In the year 1898 the reported annual delivery was 128,000,ooo gallons per day in excess of the 115,000,000 gallons daily delivery of the completed Croton system of the second period, or a total daily delivery in 1898 of 243,000,000 gallons, from which the City derived a revenue of $50.29 per million gallons, $15.21 per million gallons less than the $65.50 per million gallons in 1889, although no change had been made in the water-rates. There is here a loss to the City for 1898 of $1,349,000. This analysis shows that on the 31st of December, 1898, the City had a water-plant which represented a net investment by the City of $86,000,000. It was earning at that date, upon actual consumption, a net annual profit of $1,882,000, which profit, through increased consumption of water, is steadily growing, and will, when the consumption reaches the capacity of the present system, be increased to more than $4,000,000 yearly. A brief outline of the three constructive periods of the Croton system will aid the study of its finances. First Period (1832-1884). The actual work was begun in 1833. The aqueduct was partially completed in 1842, when, on October 14, the Croton water was introduced into the City. The work on the aqueduct was not, however, fully completed until 1844, while High Bridge, over which the water was conveyed to Manhattan Island, was not finished until November, 1848. The distributing system below the Harlem River was badly planned and experience proved that it had practically to be reconstructed in the succeeding years. The financial results of the period ending in the year 1849 are to be found in the annexed tables. The maximum delivery capacity at that time was 13,140 million gallons yearly. In the year 1849, that quantity was delivered. The aqueduct had then cost $11,676,736.70 for construction and $52,492.05 for maintenance, a total disbursement, from 1832 inclusive, of $11,729,228.75. Its revenue was $278,811.72, and could not be increased without an increased investment and further extensions of the plant. The annual interest charges were $700,000; the annual maintenance charges $12,364. The deficit of that year was $433,442.22. The aggregate deficit up to that time was $5,138,913.64, including $21,846.54 in maintenance charges for public reservoir. A costly error had been made. The distributing system within the City was not adequate, and only about onehalf the water conducted by the aqueduct could be delivered to consumers. To remedy this a large further outlay was required. One item of nearly $5,000,000 in the later construction account shows part of the cost of removing and replacing the useless conduits. It was necessary to enlarge the mains, build storage reservoirs, change the aqueduct from a masonry to a pipe conduit within the City limits, construct receiving reservoirs within the City, erect pumping stations and high service towers, and reconstruct the upper portion of High Bridge so as to permit the introduction of much larger mains. These and many other changes were made during the period from 1850 to 1880, and involved the expenditure of $21,000,000, making the cost of the aqueduct, with its distributing system, up to |