Following upon the meeting of the Chinese Ratepayers Association, held Ju the Greater shanghai Gererai Chamber of Commerce to oppose the 25 per cent. surcharge proposed by the Shanghai Watorworks Ca, on existing water rates, the Shanghai Realty Owners Association have addressed a letter to the company in which they lodge trong protest against the proposed increase. The proposal, the writers say, cannot be vindicated either on the ground of principle or on the ground of expediency and, if carried. Into effect, constitutes a gross violation of the agreement entered into with the Coun The Yetter says-—
C.D. Pearson, Esq, Enginer-in-Chief & Manager, Shanghai Waterworks Ca,, Ltd., 69 Kiangse Road.
Sm—I have the honour to inform you that the Shanghai Realty Owners Association hereby lodge a formal protest against the surcharge of 25 per cent. of the existing water rates proposed by your company, sanctioned by the Shanghai Muni cipal Council and announced to the public to be made effective as soon as practicable. The explanation of the circumstances leading up to the present development as furnished your company in a statement issued the press on August G does nat literd a justification of the proposed ease, The proposal, in the option of this association, cannot be vindicated either on the ground principle or on the greend of expedieney, and, if carried into eff constitutes a gross violation of the agreerfent between the Council anc your company dated March 17, 1928.
Water supply is a public utility that stends in n class by itself for not only is the water "service a natural monopoly but the demand for water is a demand for an aban authority 3 even goes 40 far as to advocate absolute public ownership of the water supply aystem as much because the water supply has a relation to public health has, therefore, the control of the iliand-death rate' of a city as because there is a public interest that may be adversely affected by a private company's rate making policy. Besides economic motives which actuated the ordinary business concern, there are social motives which govern the management of a waterworks company, Such company owes more obligation to the public for their interest and welfare than to the shareholders for their profits and dividends. In formular. ing the policy of the company and Girectingg the operation of the service, public interest is, therefore, paramount and should transcend all other considerations, To seek profits for investors at the expense of the general public by pursuing a rate making policy is dia metrically opposed to the basic prin ciple upon which an utility company is operated. In the light of these reasonings, this association strongly maintain that proposed surcharge of 5 per cent, of the existing water rates put forward by your company will jeopardize the interest of the individual citizen and the entire community and is an unreasonable move which cannot be acceded to by the public at large whose sufferance comes first and the authorities' sane tion comes next.
The fundamental reasons accounttable for the present move as stated by your company are low exchange and enhanced cost of materials, which conspire to cause deficiency in nett profit out of which allowances for fixed dividends are made. Allow us to point out that, as the community have never been benefitted ty a lower water rate against a high exchange, they should not be called upon to pay a higher water rate against a low exchange to atone for the deficiency in the budget of your company. To go a step further,-water rates are collected at fixed percentage on the rental of the dwelling houses. Subject to the operation of that economic law of Supply and demand, the rental in Shanghai has risen' within a. brief span of two decades to 10 to 15 times higher than it was before. Phe corresponding increase in water rates following automatically the rapid rise of house rentals is at once startling and must have put your company on-a financially sound basis to combat any bad years to come.
The reserves accumulated im these [favourable years under the equalizaion of dividends account and the It can hardly be justified that, with-jin a short span of three years after Jone tariff period barely expired, an jinerease of 20 per cent. was made, a surcharge of 25 per cent. is being' asked and "a large increase in water rates in 1931" is again anticipated. sideration, one of the biggest items, the estimate of expenditure of any company is the cost paid for raw materiale, The raw material your: Jcompany consume is that turbulent jeurrent of the Whangpoo River which is an inexhaustible resource lat your command As to cost of operation, the expenses involved in {the installation of water mains are considered a big item, bat the branch mains in the dwelling houses are installed at the landlords' own ex-
{four inch mains to Tls. 175 for four singh mains when the branch mains Jare connected with the central main.
In addition to paying water rates, therefore, the consumers have really. [shared with your company a portion jof the cost of operation, which is mo means negligible. ' Enhanced cost of materials will conse to be a reason for a surcharge when the free supply of the company's raw. material and the consumers' share in cost of operation are to be reckon-led with.
Lastly, the proposed increase of [water rates constitutes a violation. lof the agreement entered into by the Gouneil and your company dated March 17, 1928, inasmuch as the agreement stipulates a tariff charge Hor n tariff period within which change of rates is permitted. To impose a heavy surcharge before the Jexpiration of the tariff period with the primary object of lessening an Janticipated increase in the sueceedjing tariff period can not be accepted 'a justification for whether that increase anticipated by the directors Jof your company is justifiable and Jean be carried into effect remains a matter for public scrutiny and jsufforance when the revision of the tariff charges la brought up for the [Council's sanction. And as the [Council has promised to reconsider the whole question in the event of the sterling value of the tael apredating to two shillings, we have Inueb reason to doubt the necessity fof that increase expected by your directors with exchange now steadily This association is representative Jof the owners of real estate in Shanghai who are directly interest Jed in the present question. In filing ithe protest, however, we are voicing the opinions of the property owners, fin particular and the community in general for public interest is as much affected by the proposed in-Jerease of water rates as the interest lof the members of this association.
clear enough to you and are looking We ope we have made our stand forward to seeing public aspirations fully complied with.
Yours faithfully, Shanghai Realty Owners Association.
per PERAN It, secretary.
Political Demand for Withdraveal of Increased Schedule With reference to the proposed increase in water rates, the Sed District Kuomintang Branch in a manifesto issued on September 10 states that the Shanghai Municipal] ouneil in approving the proposed! inevease has disregarded the welfare! of the community and that residents Jshould refuse to pay for water in order to hasten a settlement of the:
At a meeting held by the 1st District Kuomintang Branch the! following resolutions were discussed 1.—That a manifesto be issued protesting against the proposed in-
2—That the Municipality Greater Shanghai be requested; through Kuomintang Headquarters to open strong negotiations with the: Settlement authorities over the in-
'—That the Chinese Ratepayers Association be requested to organize!
committee to oppose the increase.
The propaganda departinent_ the Shanghai Special District Kuomintang also held meeting at which resolution was passed to request the Chinese Ratepayers Association
Text read from the printed page and cleaned; old type leaves the occasional error.