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 MAYOR WARREN OLNEY OF OAKLAND
 
 THE WATER QUESTION. 
 
 Address of Mayor Warren Olney. Published by 
 Bay Cities Water Company by Permission. 
 
 Before you elected to office the present, Mayor and City 
 Council you pledged them in the strongest possible manner 
 to devise, if possible, and present to you some plan by which 
 the City should become the owner of its own water works 
 system. The 1 Mayor and Council have had this pledge in 
 mind all the time and to the best of their ability have redeemed 
 their promises. It has been no easy task. It has required 
 much time, much thought, and no small amount of negotia- 
 tion with different corporations. The result of our labors 
 is before you. We have done our best and it is for you to 
 approve or reject. 
 
 As my term of office is about to expire, and I have given 
 much attention and study to the matter of water supply for 
 Oakland, I take it that it will not be out of place for me to 
 lay before you a condensed statement of the situation as it 
 appears to me. To do so it is necessary to begin with a brief 
 history covering the period of the present administration. 
 
 NEGOTIATIONS WITH BAY CITIES WATER COM- 
 PANY. 
 
 Immediately on taking office negotiations were opened 
 with the Bay Cities Water Company, keeping in mind that 
 it would be better for Oakland if there should be a strong 
 rival to the Contra Costa Water Company. The City thereby 
 would reap the advantage of competition in the sale to it of 
 a water plant and could make terms with the corporation 
 that would do the most for the City for the least money. 
 Negotiations were also opened with other corporations and 
 individuals claiming to own a water supply. The advisability 
 of buying out the Contra Costa Water Company if the pur- 
 chase could be made at anything like a fair value was kept 
 in mind all the time. Personally I have at all times been 
 willing, and I think the members of the Council had the same 
 views, that it would be advisable to buy out the Contra Costa 
 Water Company even if we had to pay a full million of dollars 
 more than the property was really worth. What the actual 
 value of that property is will appear further on. But, what- 
 ever its value, I am, and always have been, willing to pay a 
 large bonus to rid ourselves of that corporation. 
 
 The first proposition from the Bay Cities Water Corn- 
 pan v was that it should bring water in any quantity the City 
 desired to the eastern boundary of Oakland and sell it to the
 
 City by the million gallons for the period of twenty years. 
 This proposition was afterwards withdrawn by the Company 
 under the advice of its lawyers that a twenty years' contract 
 could not be made binding upon the City. 
 
 After this stand was taken negotiations proceeded upon 
 another basis, which resulted in the proposition submitted 
 by me to the Council on August 10, 1903. In short, this 
 proposition of the Bay Cities Water Company was much like 
 the one now before the people, except that it was proposed 
 to utilize the flood waters of Del Valle Creek alone, Isabel 
 Creek not being mentioned. 
 
 The Council employed Mr. Desmond Fitzgerald to ex- 
 amine the proposed scheme and report thereon. Mr. Fitz- 
 gerald, at considerable expense to the City, made an exami- 
 nation of the properties proposed to be conveyed by the Bay 
 Cities Water Company and in his report stated three objec- 
 tions to the proposition. On account of these three objections 
 Mr. Fitzgerald disapproved of the proposition. BUT ALL 
 THREE OF THESE OBJECTIONS HAVE BEEN EN- 
 TIRELY OBVIATED BY THE NEW PROPOSITION 
 MADE BY THE BAY CITIES WATER COMPANY NOW 
 BEFORE YOU. 
 
 By most unfair argument it is stated and reiterated that 
 Mr. Fitzgerald's report is hostile to the proposed plan of the 
 Bay Cities Water Company. "Damnable iteration" has 
 done its work, and a lodgment has been made in the minds 
 of many people that the present plan or proposition now 
 before you has been condemned by Mr. Fitzgerald. Such 
 is not the case. A concise statement of His three objections 
 to the old proposition will s 1 ~ow how unfair the argument is. 
 The argument, too, is a fair type of the methods of the Contra 
 Costa's advocates. 
 
 The first and most important objection made by Mr. 
 Fitzgerald was that the Del Valle Creek alone would only, 
 in a period of excessive drought like 1898 and 1899, produce 
 11,350,000 gallons of water per day for the City of Oakland, 
 after deducting the claims of riparian owners on the creek 
 below the dam. 
 
 It strikes me that a supply, in such a period of drought, 
 of 11,350,000 gallons of water per day, would be immensely 
 valuable to the City of Oakland. Bear in mind that Mr. 
 Fitzgerald's estimate was for water from the Del Valle Creek 
 alone and he referred to a period of the most prolonged drought 
 of which we know in California. One naturally inquires 
 what -the Contra Costa Water Company could do in such a 
 season of drought. No eleven millions of gaHons per day 
 nor the half of it, could be obtained from Lake Chabot. The 
 supply from that lake must be supplemented and helped out 
 from the Niles Cone. The City can get water from the Niles 
 Cone just as well and as easily as can the Contra Costa Water 
 Company. But eleven millions of gallons per day of pure
 
 mountain water obtained from the Del Valle Creek will tide 
 over a city of 120,000 people in seasons of severe drought. 
 With Del' Valle Creek alone, therefore, the City would be 
 better off than it is now in seasons of drought. 
 
 But don't lose sight of the fact that the present prop- 
 osition of the Bay Cities Water Company is to add the flood 
 waters of Isabel Creek to the supply. This, according to 
 the report of the engineers, will give the City full 20,000,000 
 gallons per day, even in case of drought. On the head waters 
 of Isabel Creek the rainfall is heavier than on Del Valle Creek. 
 
 Therefore the first and greatest objection of Mr. Fitz- 
 gerald is more than answered. 
 
 The second objection was that BELOW the dam the 
 waters of the hills would mingle with the stream before the 
 pipe took up the water, and possibly affect its quality unless 
 filtered. But the distance is not great and as these hills are 
 high and steep we all know that the danger of contamination 
 is extremely small. The bulk of the water would come from 
 the reservoir above, where its quality is approved by Mr. 
 Fitzgerald. But suppose there is danger, it can be entirely 
 obviated, according to Mr. Fitzgerald, by filtration. I call 
 on you to compare the low hills of farming and grazing land 
 which drain into Lake Chabot with the steep mountainous 
 country about the Del Valle Creek and say which, from the 
 very nature of the case, must supply the better water. Is 
 not Mr. Fitzgerald's second objection answered? 
 
 The third and last objection was as to the character of 
 the dam the Bay Cities Water Company proposed to erect 
 for the purpose of storing the flood waters of Del Valle Creek. 
 Mr. Fitzgerald said that no dam of the kind proposed had 
 been actually tried in the United States, though it had been 
 much discussed by engineers and "on theoretical grounds it 
 is difficult to find an objection to it." The foreeroing is his 
 own language. BUT THE NEW PROPOSITION OF THE 
 BAY CITIES WATER COMPANY IS FOR A DIFFERENT 
 KIND OF DAM. A KIND THAT HAS BEEN TRIED 
 AND FOUND GOOD. IT IS APPROVED BY THE BOARD 
 OF ENGINEERS APPOINTED BY THE COUNCIL AND 
 THE BAY CITIES WATER COMPANY. 
 
 Now what is there that Mr. Fitzgerald objected to that 
 has not been fully met by the proposition now before you? 
 Absolutely nothing. I repeat with all possible emphasis 
 that the continual dragging in of the objections made by 
 Mr. Fitzgerald in his report on the original proposition of the 
 Bay Cities Water Company is for the purpose of confusing 
 your minds and is not fair argument. It ought to have no 
 weight with the voter.
 
 THE CONTRA COSTA WATER COMPANY REFUSES 
 TO KEEP ITS AGREEMENT TO ARBITRATE. 
 
 Mr. Fitzgerald's report was presented to the Council on 
 January 18, 1904, and the Council, basing its action on that 
 report, refused to enter into a contract with the Bay Cities 
 Water Company. No attempt was made by the Council to 
 get a second or better proposition from the Bay Cities Water 
 Company. Negotiations were suspended. That negotia- 
 tions were suspended was because of a proposition that was 
 made by the Contra Costa Water Company to the Council 
 to fix the valuation of its plant by arbitration. It seemed to 
 all that here was to be a solution of our difficulties. Bear in 
 mind that Mr. Fitzgerald's report was not made public until 
 January 18, 1904. Until this report was public the Contra 
 Costa Water Company did not know what the report would 
 be. It evidently was afraid of it. Evidently, too, its mana- 
 gers were not so doubtful then of the title of the Bay Cities 
 Water Company to the flood waters of the Del Valle Creek 
 as they profess to be now, and which they and their followers 
 are continually dinning into the ears of the Oakland voters. 
 My reason for this conclusion is that four days previous to 
 the filing of Mr. Fitzgerald's report, and while the Contra 
 Costa Water Company's managers were ignorant as to what 
 it would be, and fearful of its effect, they delivered to the 
 Council a written proposition, purporting to be signed by 
 Mr. Dingee as president, to the effect that the Contra Costa 
 Water Company would submit the question of the value of 
 its plant for rate fixing purposes, and for leasing, and for pur- 
 chase, to a board of three engineers, one to be selected by the 
 City, one by the Contra Costa Water Company, and they 
 two to select the third. Now we seemed to have a solution 
 of our difficulties! It was just what the City wanted. It 
 wanted a board of competent persons to fix the value of the 
 Contra Costa Water Company's plant. The people of Oak- 
 land are willing, more than willing, to pay water rates on a 
 fair value of the existing plant. The people of Oakland are 
 willing, more than willing, to buy the Contra Costa plant at 
 a fair valuation. I am myself willing, as a citizen and tax 
 payer of Oakland, that she should pay the full value of the 
 Contra Costa Water Company's plant when ascertained and 
 add thereto a large bonus, in order to get rid of the corpora- 
 tion and eliminate its influence from our City politics. I 
 believe three-fourths of the voters of. Oakland are of the same 
 mind. 
 
 Personally I hailed the written proposition of the cor- 
 poration to submit this question of value to arbitration with 
 the greatest pleasure. The term "value" as applied to water 
 property for rate fixing purposes has been settled by the 
 courts, and the proposition of the company was to find this 
 "value" by arbitration. But before the proposition was
 
 reduced to a written contract so as to be binding upon the 
 Company Mr. Fitzgerald's report came out. Assuming that 
 we were dealing with men who would not go back on a plain, 
 unambiguous written statement of what they were willing 
 to do, a contract was drawn up embodying the exact language 
 of the written proposition, neither more nor less. Not a word 
 was added, nor was a word taken therefrom, except to provide 
 for carrying out the written proposition. In other words, 
 to make it binding upon the Contra Costa Water Company. 
 
 The Contra Costa Water Company refused to sign the 
 contract and withdrew its proposition. 
 
 I have been told that when the President of the Com- 
 pany was reproached by a member of the City government 
 for not keeping faith he excused himself by saying that when 
 he made the proposition he did not know what Mr. Fitzgerald's 
 report was!!! Is comment necessary? 
 
 DESMOND FITZGERALD'S APPRAISEMENT OF THE 
 CONTRA COSTA WATER COMPANY'S PLANT. 
 
 Before closing this statement of facts preceding the 
 present proposition of the Bay Cities Water Company it is 
 my duty to remind you of the appraisement of the value of 
 the Contra Costa Water Company's plant made by Mr. Des- 
 mond Fitzgerald, the same engineer who is so much quoted, 
 because of the three objections made by him to the original 
 proposition of the Bay Cities Water Company. Previous to 
 taking office I relied upon the evidence of the nine engineers 
 who testified on behalf of the City in the water case commonly 
 known as the Hart case, as against the three engineers, two 
 of whom were employes of the water company and were the 
 only engineers produced by the water company on the trial. 
 It seemed to me that there could be no doubt that the testi- 
 mony of these nine men should be relied upon rather than 
 the testimony of the two hired men of the Contra Costa Water 
 Company. These nine engineers fixed the value of the Contra 
 Costa Water Company's plant in the neighborhood of three 
 millions of dollars. After assuming the responsibilities of 
 office I .began to reflect that possibly these engineers had been 
 influenced by the fact that they had been called by the City 
 as witnesses, their fees paid by the City, and perhaps their 
 testimony was biased. I wanted some additional and out- 
 side evidence that could be relied upon as to the true value 
 of the Contra Costa Water Company's plant. Thereupon I 
 united with Mr. John L. Howard in hiring Mr. Desmond Fitz- 
 gerald to make a careful and accurate appraisement of that 
 portion of the Contra Costa Water Company's plant used in 
 supplying Oakland with water. I gave to Mr. Fitzgerald 
 written instructions, which have been published. Under 
 those instructions Mr. Fitzgerald appraised all of the property 
 the Contra Costa Water Company used in supplying Oak-
 
 land, excepting only the value of the land for ordinary pur- 
 poses, which any real estate agent is more competent to ap- 
 praise than an engineer. That is to say, Mr. Fitzgerald ap- 
 praised the distributive system, the water rights, the dams, 
 and other works, the increased value of the land used for re- 
 servoir purposes by reason of its being suitable for such pur- 
 poses, in fact everything except the value of the land for or- 
 dinary farming purposes, and a small amount of personal 
 property, such as tools, etc. Now the Contra Costa Water 
 Company claims to own land in the watershed of San Leandro 
 reservoir to the extent of about five thousand acres. Mr. 
 Fitzgerald took into consideration its special value for the 
 water company's purposes, but did not appraise its value as 
 farming or grazing land. Suppose it is worth for such pur- 
 poses fifty dollars per acre, a large estimate, that would make 
 $250,000. He did not appraise the one hundred and fifty 
 acres of land at Alvarado because the Company's land there 
 is no more valuable than other lands there selling for about 
 $100 per acre. But suppose we add $50,000 for this land 
 and $10,000 for the tools and we have $310,000 for property 
 Mr. Fitzgerald did not appraise. But everything else, dis- 
 tributive system, reservoirs, dams, pumping plants, water 
 rights, pipe lines, etc., the total plant in fact, with the ex- 
 ceptions above noted, he appraised at $2,689,185. Now, if 
 we add a liberal estimate for the items he did not appraise, 
 we have about $3,000,000 for the entire plant. Then, to be 
 on the safe side, let us add $500,000 to the above and we have 
 $3,500,000 as the entire value of the Contra Costa Water 
 Company's plant. 
 
 VALUE OF WATER IN SOUTHERN CALIFORNIA. 
 
 Outside and independent ot any expert testimony as to 
 valuations, there is proof positive that the testimony of the 
 City Engineers and of Mr. Desmond Fitzgerald as to the 
 value of the Contra Costa Water Company's plant is a liberal 
 one. It is this the rainfall about the Bay of San Francisco 
 is such that water for irrigation is not needed. Consequently 
 there is not enough demand about the Bay of San Francisco 
 to create a market price. In the southern part of this State 
 the rainfall is much smaller and water is scarce and the de- 
 mand for water is so great that it has a regular market price. 
 Water in the southern part of the State has become a com- 
 modity, bought and sold by the miner's inch. A water com- 
 pany develops a water supply and enters into a contract to 
 furnish perpetually to a buyer a supply of water for so much 
 per miner's inch. It will be observed that the company must 
 keep up the plant and continue to supply the water. Now 
 in that country, where water is in so much demand, that it 
 has a market price, the value of the miner's inch up t<> the 
 late season of excessive drought, was under $1,000 an inch
 
 and water could be bought at that price and less of companies 
 developing water supplies. Seven Hundred and Sixty-eight 
 miners' inches of water is equal to ten million of gallons per 
 day, which is about what the Company has been furnishing 
 to Oakland. The City of Oakland, therefore, at the market 
 rate for water in Southern California, should pay $768,000 
 for a daily perpetual supply of 10,000,000 gallons. Of course 
 the distributive system, supply pipes, etc. should be added 
 thereto, but it would bring the total value of the Contra Costa 
 Water Company's plant, estimated upon the basis of the 
 selling price for water in Southern California, below rather 
 than above the figures of Mr. Desmond Fitzgerald. 
 
 Again Mr. Fitzgerald's figures are confirmed by the Bay 
 Cities Water Company, which offers a complete plant and 
 water rights for a daily supply of 20,000,000 gallons for 
 $3,750,000. 
 
 MR. HOWARD'S VALUATION. 
 
 Mr. John L. Howard has spent more time than any indi- 
 vidual, not an engineer, that I know of in going over the 
 property of the Contra Costa W T ater Company and estimating 
 its value. He took the figures of all the engineers and called 
 Mr. Adams, the engineer for the Contra Costa Water Com- 
 pany, and Mr. Desmond Fitzgerald into consultation. He 
 assures me that it is impossible to appraise the property of 
 the Contra Costa Water Company at more than about four 
 millions of dollars. 
 
 I make no apology for spending so much time on these 
 questions of value, for the value of the Contra Costa Water 
 Company's plant must be considered in all discussions as to 
 what action the City of Oakland should take. That corpora- 
 tion forces the question of values upon us. 
 
 After the proposition of the Bay Cities Water Company 
 had been rejected by the Council, and after arbitration had 
 failed, the Council fixed the rate we must pay for water for 
 the year beginning July ist, 1904, upon a valuation of $4,- 
 700,000 on the Oakland division and allowed practically, as 
 part of the running expenses, every demand of the Contra 
 Costa Water Company, even to allowing for the amount of 
 subscriptions made by that corporation to public celebrations 
 and to charity. In my opinion the Council erred on the side 
 of too great liberality to the water company. But, notwith- 
 standing this, the corporation immediately brought a suit 
 in the United States Circuit Court and obtained a preliminary 
 injunction. That Court is congested with business and there 
 is no telling when the case can be heard on its merits. I 
 have no doubt of the results when that hearing can be ob- 
 tained. But meanwhile we are paying rates on a valuation 
 of seven millions of dollars and paying extravagant sums 
 besides for operating expenses which the company charges 
 against the City. 
 
 8
 
 THE NEW PROPOSITION OF THE BAY CITIES WAT- 
 ER COMPANY. 
 
 Having now given as briefly as possible a history of 
 what has taken place up to within a few months, with such 
 comments as the occasion seemed to call for, I now take up 
 the situation that confronts us. 
 
 In the language of President Cleveland, "it is a condition 
 not a theory" that confronts us. In the first place there is no 
 use to talk of buying out the Contra" Costa Water Company's 
 plant unless we are willing to pay at least seven million dollars 
 therefor. There is no statement before the people that the cor- 
 poration will sell for that sum even. Are you willing to pay 
 that amount? If the city will not agree to pay as much as 
 seven million dollars, then you can rest assured that if a Council 
 fixes the water rates based upon a less valuation, another suit 
 will be brought by the company in the United States Circuit 
 Court to enjoin their collection. We can rely upon suits being 
 brought every year until one of the cases reaches the Supreme 
 Court of the United States. That court has had other water 
 cases before it and we can fairly assume a knowledge of what 
 that tribunal will do when our case reaches it. It has uniformly 
 decided for the people heretofore. It will put a quietus upon the 
 claims of the water company. But meanwhile we have turmoil 
 and litigation, unless we feel that it is better to accede to the 
 demands of the company and pay twice what its property is 
 worth. Do you want to do it? If so there is no use carrying 
 the matter any further. I call on you to do one thing or the 
 other. If you are not willing to accede to these demands, then 
 let us install a water plant of our own. For my part I am in 
 favor of accepting the Bay Cities Water Company's proposition 
 because, if there were no other reasons, IT PROPOSES TO 
 DELIVER TO US A WATER SUPPLY THAT WE NEED 
 AND MUST HAVE EVEN IF THE CONTRA COSTA 
 WATER COMPANY COMES DOWN TO A REASON- 
 ABLE SELLING FIGURE AND WE CHOOSE TO BUY 
 IT OUT. 
 
 Reflect for a moment and you will realize that there is no 
 adequate supply of water for the cities on our side of the bay 
 if they keep on growing, as they no doubt will, nearer than the 
 waters of Alameda Creek. The flood waters of that creek are 
 now going to waste into the bay. That creek and its tribu- 
 taries are our natural source of water supply and if the Bay 
 Cities Water Company can now deliver at the margin of the 
 city, for the sum of $3,750,000, a plant and water supply equal 
 to twenty million gallons per day, it is the greatest possible 
 folly, from a business point of view, not to close with the 
 proposition and deal with the Contra Costa Water Company 
 afterwards. By doing so we shall be in a position to dictate
 
 Terms to that corporation and compel it to sell at a fair valua- 
 tion. I assume that the city of Oakland will never attempt to 
 get the property for less than it is fairly worth. I shall go into 
 this question of business policy further on. 
 
 WHAT IS THE PROPOSITION OF THE BAY CITIES 
 WATER COMPANY? 
 
 In short it is to impound the flood waters of Del Valle 
 and Isabel creeks and store them in the mountains back of Mt. 
 Hamilton at an elevation of seventeen hundred feet above sea 
 level, and bring the same, by means of a wood stave pipe, past 
 Pleasanton and through the Niles Canyon to the eastern bound- 
 ary of the citv of Oakland, the plant to be complete in all 
 respects and ' SATISFACTORY TO THE ENGINEERS 
 SELECTED BY THE CITY OF OAKLAND, and to have a 
 capacity of delivering daily twenty millions of gallons of water. 
 
 We already have the report of Mr. Fitzgerald on the Del 
 Valle Creek and we have the report of the board of three 
 engineers recently appointed on the Del Valle and Isabel creeks 
 combined, and from those reports we know there will be suffi- 
 cient water, even in years of extreme drought, to give us the 
 twenty millions of gallons the works provide for. 
 
 A perfect title to all of the property to be conveyed and a 
 pertect title to the right or privilege to impound these flood 
 waters is guaranteed by the company, and no money is to be 
 paid until the city authorities are absolutely satisfied that the 
 guaranty is made good. That is to say, the company contracts 
 to give a perfect title and will not claim the right to draw down 
 any portion of the purchase price without securing the repay- 
 ment to the city of the amount so drawn down in the event it 
 should turn out that the company's title is not good ; and if that 
 method of security is not satisfactory, the bonds may be left in 
 escrow, to be sold when the title is made perfectly satisfactory. 
 The purchase price is to be $3,750,000. 
 
 These are the general terms of the proposition, but if you 
 agree to accept the proposition in its general terms then a 
 careful and elaborate contract is to be drawn THAT SHALL 
 BE SATISFACTORY TO THE CITY AUTHORITIES to 
 carry out the agreement. In other words, the proposition is 
 preliminary, its general purposes being stated, and if you ap- 
 prove of the same, then the drafting of the formal contract 
 between Oakland and the Bay Cities Water Company is to be 
 left to your attorneys. 
 
 I think it is perfectly safe to say that never in the history of 
 the acquisition of large or valuable property by any municipality, 
 or State, or country, were there ever before so many safeguards 
 used to protect the rights of the people. In ordinary business 
 transactions no man would in such an important matter so 
 completely surrender his property to the good faith and fair- 
 
 10
 
 mindedness of his opponent and his opponent's lawyers as the 
 corporation has done to the city of Oakland and its lawyers. It 
 is a compliment to the people of Oakland that the Bay Cities 
 Water Company is willing to trust the people so fully. 
 
 Now, what are the objections to this proposition ? I shall 
 take up the principal ones about which we hear most. 
 
 THE QUESTION OF TITLE. 
 
 There are more objections urged on the grounds of in- 
 secure or insufficient title in the Bay Cities Water Company 
 than upon any other ground For my part I would never 
 consent to the city paying any money, or contracting to pay 
 any money, for property to which there was not 
 a good title, and therefore if there is any doubt about the title 
 of the Bay Cities Water Company no money should be paid to 
 it, or if paid, the city should be ?:nply secured in its return, 
 until the title has been fully established by decisions of the 
 courts. That is just what the proposition of the Bay Cities 
 Water Company contemplates, and in my opinion it is a more 
 satisfactory proposition, as I have already said, than was ever 
 before made to a municipality. It is evident that the men who 
 have put their money into this corporation are absolutely sure 
 of their title. They stand to lose millions of dollars if the title 
 fails. 
 
 For my own part, when I reflect that the flood waters of 
 Del Valle and Isabel Creeks have never been actually used, 
 that they have always gone and are now going to waste, that 
 a great city (for I look upon Oakland, Berkeley and Alameda 
 as practically one city) is rapidly growing up almost alongside 
 of the outlet of these streams, that this great city has no other 
 adequate source of supply in the neighborhood except from 
 these streams, I have very little doubt that the title of the Bay 
 Cities Water Company will be confirmed by the courts. The 
 only possible competitor is the Spring Valley Water Works, 
 which is now taking from Alameda Creek less than sixteen 
 millions of gallons per day for the supply of San Francisco. It 
 has never utilized the flood waters of Isabel Creek or Del 
 Valle Creek, and in my opinion in any contest between the Bay 
 Cities Water Company, which is undertaking to supply the city 
 of Oakland, and the Spring Valley Water Works, which is 
 supplying the City of San Francisco, the courts will say the 
 Spring Valley Water Works may be allowed to take all it has 
 appropriated, namely sixteen millions of gallons per day, from 
 Alameda Creek, but the flood waters which have never yet 
 been appropriated must and shall be used by the threat city to 
 which these waters naturally belong and to whose very ex- 
 istence they are necessary. 
 
 It must be borne in mind that the courts have always said 
 that the use of water must be reasonable so as to subserve the
 
 needs of the greatest possible number. Applying that prin- 
 ciple, I do not see how any fair tribunal can ever take from 
 Oakland, or from a corporation supplying the City of Oakland, 
 the flood waters of these creeks, hitherto going to waste, and 
 give them to the City of San Francisco, which is on the op- 
 posite side of the bay and has other sources of supply on the 
 peninsula. 
 
 The fact is that the Spring Valley Water Works many 
 years ago turned its attention to Alameda Creek and acquired 
 what water rights it possesses not because the waters of 
 Alameda Creek were needed for the people of San Francisco, 
 but because it feared that the City of San Francisco would 
 itself utilize the waters of Alameda Creek and thereby put the 
 Spring Valley Water Works out of business. The Spring Val- 
 ley Water Works can utilize from Pescadero Creek and Butano 
 Creek enough water, now flowing into the ocean, to make up 
 for any lack of water from Alameda Creek. 
 
 The Bay Cities Water Company claims that so far as the 
 preliminary steps for the location of water rights is concerned 
 it is prior in time to the Spring Valley Water Works. About 
 this I do not know. But this I do know, that the flood waters 
 of the Del Valle Creek and Isabel Creek have never yet been 
 utilized and in my opinion they belong by right to the people 
 of Oakland in preference to the people of San Francisco. 
 
 But I would not have the city take any risk whatever in 
 the matter and I do not believe it does take any risk in accepting 
 the proposition made by the Bay Cities Water Company. Oak- 
 land's present bad condition on the water question is owing to 
 the city not having utilized the waters of Alameda Creek long 
 ago. We neglected our opportunities. Shall we now, because 
 the Spring Valley water works claims title to the flood waters 
 of Del Valle and Isabel creeks, sit down supinely and let that 
 corporation impound those waters and take them to San Fran- 
 cisco? Is it not better business policy for us to say to the Bay 
 Cities Water Company : "Make a fight for the flood waters of 
 those creeks and if you win out we will take the property off 
 your hands?" Here is a chance to acquire a daily supply of 
 twenty million gallons of water. Oakland is justified in taking 
 some risk in the matter. As a matter of fact she takes none. 
 Shall we be so dull as not to avail ourselves of the opportunity ? 
 
 LOCATION OF PIPE LINE. 
 
 The statement has been made over and over again that the 
 proposed pipe line to be constructed by the Bay Cities Water 
 Company will run at the bottom of a reservoir that the Spring 
 Valley water works proposes to erect. I have not heard where 
 that reservoir is to be. But if you will reflect upon the situation 
 you will conclude that it is only another bugaboo conjured into 
 existence for the purpose of frightening voters. The pipe line 
 
 12
 
 will follow down the Del Valle Creek, past Pleasanton, anil 
 along the county road down through the Niles Canyon, probably 
 following the line of the railroad track. No reservoir can ever 
 be constructed along the proposed pipe line. 
 
 SALE OF BONDS AND INTEREST THEREON. 
 
 Another favorite argument of the Contra Costa Water 
 Company is that we must sell the bonds and the city will lose 
 the interest while the works are being constructed. Probably 
 many people believe this statement because our district school 
 bonds were sold in a lump and at one time and we are paying 
 interest thereon though the money is not yet needed. But those 
 bonds are not city bonds at all. They are a school district 
 bond and an entirely different law applies. 
 
 Section 149 of the Charter applies to City Bonds. It reads : 
 'NOR SHALL ANY SUCH BONDS (that is bonds for im- 
 provements, water rights, etc.) BE ISSUED OR SOLD DUR- 
 ING ANY ONE YEAR IN EXCESS OF THE ACTUAL 
 EXPENDITURE INCURRED IN THAT YEAR." 
 
 There goes another spook! 
 
 COMPETITION WITH THE CONTRA COSTA WATER 
 
 COMPANY. 
 
 The fear that disastrous competition may ensue between 
 the Contra Costa Water Company and the city in the event of 
 the city installing its own plant, possesses many of our own best 
 citizens. I know of good business men who are much disturbed 
 over this prospect. But a little examination of the law will 
 show there is no good reason for it. Every city has absolute 
 control of its streets in the interest of the general public. No 
 corporation can use those streets, except as ordinary individuals 
 use them, without special permission from the city. Unless the 
 Constitution or the general law makes provision therefor, no 
 water company can open the streets in a city to lay or repair its 
 water pipes unless the city gives that permission. This is ele- 
 mentary law. Now the Constitution of California does provide 
 for opening streets by a water company for its pipes WHEN 
 AND WHERE THE CITY HAS NO WATER PLANT 
 OF ITS OWN. As soon as a city comes into possession of a 
 plant of its own the general rule applies and no street can be 
 opened without a license from the city. See Section 19 of Article 
 XI of the Constitution . Is it to be supposed that a city will 
 allow its streets to be opened and pipe laid by a competitor with 
 itself in supplying the city with water? To ask the question is 
 to answer it. The Contra Costa Water Company has, under the 
 Constitution, and because we have no municipal water plant, 
 exercised its permissive right under the Constitution to las- 
 pipes in our streets, and let us suppose that after we have in- 
 stalled a plant of our own we are still bound, as matter of 
 equity, to permit the company to open the streets to repair its 
 
 13
 
 pipes, that is certainly as much as the company can claim. We 
 can forbid the laying of pipe in any new place or to a new 
 building. In my opinion we can prevent the laying of new pipe 
 anywhere. I am not certain but the city would have the power 
 to compel the water company to take up its pipes. But I would 
 never go that far. It will be entirely sufficient to prevent the 
 laying of any new pipe to put the Contra Costa Water Company 
 out of business. 
 
 I understand there was no competition in Vallejo between 
 the Chabot Water Company and the city after the city installed 
 its own plant. From the very nature of the case there cannot 
 be competition. 
 
 Then again, the city has the power of taxation. It can 
 impose such a license for any private corporation or individual 
 supplying water to the people that the city can recoup in license 
 taxes any sums it would lose by reason of competition. There- 
 fore it seems to me that the fears of our people in regard to 
 competition are entirely groundless. 
 
 WILL THE ACQUISITION OF A NEW WATER PLANT 
 FROM THE BAY CITIES WATER COMPANY IN- 
 CREASE TAXATION ? 
 
 It will increase taxation to a small extent until the new 
 plant is installed and in operation. As soon as the city begins 
 to supply water to its people the income from the water, at 
 rates much below what we now have to pay,will much more than 
 pay for maintenance, interest on the bonds, and the payments 
 into the sinking fund. 
 
 .Nearly all the cities of the civilized world have adopted this 
 method of supplying its people with water. I sometimes think 
 no city in the world except Oakland and San Francisco would 
 tolerate such a condition as now exists here. It is the universal 
 experience of cities owning their own municipal water plant that 
 they can furnish the water at a cheaper rate than private cor- 
 porations can and yet receive an income therefrom. A few 
 minutes' reflection makes plain why this is so. 
 
 Private corporations must receive interest on the capital 
 invested and it is a notorious fact that the salaries and per- 
 quisites of the managers of such corporations are extravagantly 
 large. Then when you consider that the city, dependent on a 
 private corporation, must pay such a water rate as to give 
 dividends to the stockholders and pay the operating expenses, 
 you will see that there is every inducement to make those oper- 
 ating expenses most extravagant. We have an illustration of 
 that fact at the present time. Few employees are necessary in 
 running a municipal water plant, but so long as the managers of 
 a water company have a right to make expenditures and call 
 them operating expenses and the city has to foot the bill, there 
 is practically no restraint upon waste and extravagance. 
 
 14
 
 There are two items, therefore, viz : Interest on the money 
 invested and the reckless use of people's money, that have been 
 eliminated in those cities that own their own municipal water 
 plant. Therefore we can safely assume that after our plant is 
 installed our taxes will be lessened, our water rates will be 
 decreased, and that year by year we are acquiring through the 
 sinking fund a valuable property. At the end of forty years the 
 plant belongs to the city. 
 
 SHOULD THE BONDS ISSUED BY THE CITY BE A 
 LIEN ONLY ON THE WATER PLANT? 
 
 Some of the friends of the Contra Costa Water Company 
 claim that if we issue bonds to pay for a municipal water plant, 
 that plant and the income from the property should alone be 
 responsible for the bonds issued in payment therefor. This, 
 too, a moment's reflection will show is impracticable. The 
 water plant will belong to the city. The City Council will have 
 the right to fix the rates that our people shall pay for water. If 
 the city is under no pecuniary obligation to see that the bonds 
 are paid the temptation will be irresistible to reduce the water 
 rates. They are certain to be put at such a low figure that 
 enough cannot be realized to pay the interest on the bonds, the 
 running expenses, and lay aside enough for the sinking fund. 
 No man who has money to lend will overlook this fact. He 
 will not buy the water bonds of a city which does not make itself 
 responsible for the payment of those bonds. The capitalist will 
 say at once : "My money will be completely at the mercy of the 
 Council in "fixing the rates to be paid by consumers of water," 
 and he will refuse to lend his money. Therefore, if the friends 
 of the Contra Costa Water Company can get the people of 
 Oakland to believe that only the water supply plant should be 
 responsible for the bonds issued, then we may as well give up 
 all hope of obtaining money with which to supply ourselves 
 with such a plant. If the city is liable on the bonds, the Coun- 
 cil will fix rates high enough to pay all charges and leave a 
 surplus. 
 
 There is also another question to be considered, viz : that 
 the unimproved property in the city should be made to contrib- 
 ute its share toward the sinking fund that is to pay for the 
 water works. 
 
 SOUND BUSINESS POLICY. 
 
 Oakland is growing by leaps and bounds. The same is 
 true of Berkeley, and to a lesser extent of Alameda. These 
 three cities must inevitably become ere long consolidated into 
 one city. The present supply of the Contra Costa Water Com- 
 pany is barely adequate for their needs at the present time. We 
 must look forward to the time when in the near future there 
 will be 250,000 people needing water within the boundaries of
 
 these present three cities. Where is it to come from ? If we do 
 not avail ourselves of this opportunity to get the flood waters of 
 Isabel and Del Valle creeks, there is no sufficient source of 
 supply this side of the Sierras. If we let this opportunity slip, 
 in ten years from now we shall be much worseoff than we are 
 at present. If we obtain this supply of twenty millions of gal- 
 lons per day it is only a question of a short time when these 
 three cities will need, in addition, such water supply as the 
 Contra Costa Water Company can furnish us. If we let the 
 opportunity to get the supply from these creeks from the Mt. 
 Hamilton range go by, our condition will be deplorable, for 
 that supply will be taken to the city of San Francisco. We 
 should not hesitate, but close with the Bay Cities Water Com- 
 pany. 
 
 This should be done in the line of prudent forethought au/J 
 sound business policy. At the present time you cannot buy the 
 Contra Costa Water Company for less than seven millions oi 
 dollars. You don't know that we can buy it for that. If we 
 install an independent plant of our own, the competition with 
 the Contra Costa Water Company, about which so much has 
 been said, will force that company to sell at a fair figure. You 
 can, therefore, by wise business policy, purchase both the supply 
 of the Bay Cities Water Company from Isabel and Del Valle 
 creeks and the Contra Costa Water Company's supply for seven 
 or eight millions of dollars. In other words, if you let this 
 opportunity go by you will be compelled to pay as much, or 
 nearly as much, for the Contra Costa Water Company's plant 
 as you need to pay, if you exercise sound business forethought, 
 for BOTH the Bay Cities Water Company plant and the Contra 
 Costa Water Company plant. 
 
 I would not do any injustice to the stockholders of the 
 Contra Costa Water Company, but I would not be forced by 
 the managers of that company to pay more than the property 
 is really worth. Paying what that property is really worth, 
 we can in time get both the Bay Cities Water Company's plant 
 and the Contra Costa Water Company's plant for between seven 
 and eight millions of dollars, say eight million at the outside, 
 and do no real injustice to the stockholders of the Contra Costa 
 Water Company. 
 
 I close as I began : The city government during the last 
 two years has done its best to solve the water problem. A plan 
 has been devised that in my opinion fully solves the difficulty. 
 It is presented to you for your action. Every voter who has 
 the interests of the city at heart should carefully investigate 
 the question and go to the polls on the eleventh of March de- 
 termined to cast his ballot in such a way as shall best enhance 
 the interests of the city of his home. 
 
 WARREN OLNEY. 
 
 16
 
 Bay Cities Water Company's Proposition, 
 to Oakland. 
 
 1. A minimum of 20,000,000 gallons of water 
 daily; probably 25,000,000, 
 
 2. Water clear, pure, soft and wholesome. No 
 possibility of contamination. 
 
 3. Water drawn from over 100 square miles of 
 practically uninhabited watershed. 
 
 4. Delivered at the charter line of Oakland. 
 
 5. Location of watersheds, Mount Hamilton 
 Range, Santa Clara County. 
 
 6. Two reservoirs, capable of storing a minimum 
 S,5oo millions of gallons. 
 
 7. A; guarantee to Oakland of quiet pos- 
 lon of the above properties. 
 
 8. Oakland need not fear ligitation. Opposing in- 
 
 can only attack BAY CITIES WATER 
 COMPANY, not City of Oakland. 
 
 9. Work for the masses for three years. 
 
 ALL THE ABOVE FOR $3,750,000.00.