4 the power to levy and collect which is a franchise, must be pursued strictly according to the mode pointed out in the grant or charter, and any other method is fraught with the greatest danger to the rights and liberties of the people. We further report that the charter by which said Spring Valley Water Company was allowed to obtain a practical monopoly of the waters necessary to the people of the City of San Francisco was in the nature of a contract, and that said water company accepted its franchise with the distinct condition that it should supply fresh water to the inhabitants of said city and county at reasonable rates, and that said rates should be fixed annually by a Commission, in which the people should be represented by at least an equal voice with the company. We further find that under said charter of said company no rate or compensation can lawfully be collected for water until such rate is first fixed and established in the manner provided for as aforesaid. We have further to report, that notwithstanding that said Spring Valley Water Company has been in existence for twenty years, yet during the whole of that period no water-rates have ever been established in accordance with the provisions of existing laws in said city and county, but that on the contrary said company has during the whole of said period arbitrarily levied and collected such rates or prices for water as its officers have chosen to impose upon the people, without respect to and in absolute violation of law; and that the rates so collected are three or four times as high as the rate collected in other cities in the United States, and much higher than any rate "collected in any other city of which we have any knowledge. And further, that while said water-works have not, as we have reason to believe, cost above from six to eight millions of dollars at the very outside, and could to-day be constructed for a less sum, yet said company publicly confesses that it raises from the people of said city and county, for water, over a million and a quarter of dollars a year, and that there exists no substantial barrier to exactions of the same kind to an indefinite extent. Such being the fact, we' submit that the laws now in force have proved inadequate to a due protection of the people, and are useless for any purpose except to countenance the water company in its lawless proceedings. Feeling the utter inadequacy of existing laws, the people of said city and county, without respect to party affiliations, have for years past, by common consent, demanded from their representatives in the Legislature the fullest measures of relief. And so far as we know, all party platforms of the last year pledged their candidates to introduce and pass bills that would bring this powerful corporation within the just control of the laws. We further report that the above entitled bill, as it was originally introduced into this House, was a measure calculated to accomplish the ends and objects demanded by the people of the City and County of San Francisco in this behalf, and that, at the same time, it was reasonable and fair to the water company. But we respectfully and earnestly report that two of the amendments placed in the bill by a majority of the delegation are in conflict with its principles and purposes, and calculated to defeat the good effects of the measure, and if enacted into a law there is danger that they will leave the people of San Francisco in a worse position than they now occupy, besides extending their pernicious influences. to other parts of the State. The amendments we refer to, and which we respectfully recommend the House not to concur in or adopt, are the following, namely: 1. The amendment to section two of the bill, and which reads as follows: "The rates shall be so established and regulated as that the income of the corporation, company, association, or other person owning water-works, from the business of supplying water to consumers shall not be less than eight per cent. nor more than ten per cent. per annum on the actual cost or money invested in such works or business, over and above the reasonable expenses of operating and maintaining the same, which said actual cost and expense of operating shall be ascertained by said Board of Commissioners; provided further, that the rates as fixed shall not be higher than eighty-five per cent. of the present rates." The foregoing amendment fixes a minimum below which the profits of the water company shall not be permitted to fall. We respectfully report to the Assembly that the doctrine which takes form in this amendment, namely, that a corporation must be guaranteed against the possibility of loss, is in violation of every principle of public and private right. We report that there is nothing in the nature of a corporation that should place it above the ordinary contingencies consequent upon business speculations and adventures. When the private individual places his money in an investment or operation, whether agricultural, commercial, or otherwise, the law does not protect him against loss, but compels him to assume all the consequences of the risk. If the investment is a bad one he loses, and the Legislature does not step in to throw the burden upon the public. The water company, by its charter, contracted with the public to furnish water at reasonable rates, and it is entitled to whatever profit reasonable rates will produce, and no more. If reasonable rates will not pay it a fair interest on its capital, it must lose like anybody else, and the Legislature has no right to authorize it to make unreasonable rates to save it from loss. This would be the rule with a carpenter who contracts to build a house, and there is no reason why a corporation should be more favored by the law than any other contractor. But we have already shown that the water company does not lose but makes money in its business, and more than enough to return a fair income on its outlay; we, therefore, earnestly recommend that said amendment be not adopted. 2. The second amendment to the bill, which we report against, is to section thirteen of the bill, and reads as follows: "Provided, that this section shall not prevent such corporations, companies, or persons owning water-works from conducting their business of selling water to consumers, in case the Mayor or other executive head of the city and county, or city or town, shall fail to appoint Commissioners as herein provided, nor in case, when appointed, such Commissioners shall fail to give notice as herein required to such owners of water-works, nor in case said Commissioners shall fail to perform the duties required of them by the terms of this Act in establishing water-rates." 2a We respectfully report that the last named amendment is calculated to countenance and perpetuate indefinitely the usurpations of the water company in overriding the law and the rights of the people, by making and collecting arbitrary and oppressive rates for water, under which the people of San Fradcisco have so long suffered. It also recognizes, and if enacted into a law gives legislative sanction to, the odious and unnatural doctrine maintained by the water company, that they sell water to the people, instead of collecting a rate, or toll, for its use a doctrine, the consequences of which, if once established in this State, will lead to endless hardships upon the people. We, therefore, respectfully but earnestly urge in behalf of our constituents, the people of San Francisco, said amendment be not adopted, but that said bill pass without it. Respectfully submitted, JOHN F. SWIFT, W. K. FORSYTH, WILLIAM BRODERICK, WM. B. MAY, A. ASMUSSEN, SETH B. BLAKE, J. V. COFFEY. MINORITY REPORT OF SAN FRANCISCO DELEGATION · ON ASSEMBLY BILL NO. 116. 1 MR. SPEAKER: The undersigned, a minority of the San Francisco delegation to whom was referred Assembly Bill No. 116, "An Act relating to the Board of Education of the City and County of San Francisco," beg leave respectfully to dissent from the majority report upon said bill, for the reasons: First-That we believe it involves a breach of faith with our constituents to whom we are under express or implied obligations to reduce rather than to increase or create official salaries. Second-Because we believe the office is one of honor and should not be turned into a mere medium of political or pecuniary profit. If the real value of the services of a competent and honest School Director are to be paid in money, he should receive much more than the sum proposed in the bill. These services have since the foundation of the city been rendered without pay. They have been of an honorary character. Tradition and custom have made the office a very honorable one. During the past quarter of a century a great many citizens of high standing, scholars, men of educational experience, retired business men, and others, have filled these offices. It is not at all likely that the city will at any time be any better served in this respect than it has been in the past. There have always been found a sufficient number of citizens who could not be hired to perform any public service, but for the interest they take in educational matters are willing to serve in the capacity of School Directors. As soon as a salary is attached to the office they will retire. They do not work for pay, but for the honor. They are unselfish, patriotic, and when brought into the School Board are very efficient. The sum of one hundred dollars a month is no compensation for their services, but amounts in the aggregate to a considerable sum to the taxpayers. The best citizens prefer the office with its present traditions. Now, why not let well enough alone? Why disturb a usage which has been honored and sanctioned by the best citizens of San Francisco? Would it not be well to preserve this one honorable and unselfish public service from any association with emoluments? The city can point with pride to the honorable service which has been rendered in this department of education. It can bring forward the names of a large number of citizens who have served with an unselfish zeal in behalf of the public schools, and have retired with the satisfaction that they have rendered a most honorable service, and neither sought nor accepted anything in return. The principle that public services should be paid for is sound enough in a general way. But there are exceptions to the rule, and this is one of them. There are always some services to be rendered by every good and competent citizen to the community, which, from the very nature of the service, cannot be compensated by any stipulated salary. Every good citizen recognizes these exceptional cases. He attends public meetings to influence public opinion in the right direction, gives his counsel and coöperation to a hundred good objects, and neither expects nor desires any reward, except the consciousness of having performed a public duty in an unselfish and honorable way. What has been done from these high motives in behalf of public education will be done in the future. The best men, men most capable of discharging the duty, can be found to serve in the Board of Education without compensation, while many of them would refuse to serve if a nominal compensation were attached to the office. There is no good reason now for disturbing this honorable usage. The community is not suffering because the office of School Director draws no salary; but the chances are that it will suffer whenever this provision is attached to the office. er TL MINORITY REPORT. 1 We, the undersigned, a minority of your Committee on Education, are compelled to dissent from the report made by the majority of said committee, favoring the adoption of the substitute for Assembly Bill No. 289, for the following reasons, which they herewith respectfully submit: First-That "section one" of said substitute submits the selection of text-books to a Board already committed to extensive changes, involving very great expense to the people of the State, in opposition to what we believe to be the wishes of the people. Second-That "section two" proposes an impossibility when it prescribes that the contracting publishers shall regulate the retail prices at which their books shall be sold in this State, while it is manifest that the retailer, and he alone, can control the price at which he will sell his own property. Third-That section three" provides that "said Board may reject any or all proposals," regardless of the price. A careful review of action by the State Board of Education in previous adoptions shows that this provision has already placed upon the State list expensive series of books for a term of years, when they had before them bids for parallel series of acknowledged merit, at less than half the prices at which the adopted series were accepted. As an example, a series of arithmetics, whose merits are acknowledged by leading educators in every State in the Union, were offered at less than one-third the price at which an inferior series were adopted, as will appear by examination of the record in the office of the State Superintendent of Public Instruction. Fourth-It is also further provided in "section three" that the State Board of Education may accept any proposal in which the wholesale prices named are no higher than those named in any catalogue, or other published advertisement of the publisher of said books, while it is a well-known fact that all publishers give to the trade a discount from said published catalogue price, at rates ranging from fifteen to twenty per cent. It is apparent that the above reference to the publishers' catalogue prices, which may be as frequently changed as the phases of the moon, is designed and calculated to enable the publishers who may enjoy the special favor of the State Board of Education to practice deception and trickery through sham catalogues or advertisements of prices issued expressly to secure the adoption of their books. There is no provision in the bill which requires the State Board to adopt the lowest price bid, but, on the contrary, they may accept the highest bid before them, only provided it does not exceed the price found in any catalogue of such books, notwithstanding that there |