USA > Nebraska > Douglas County > Omaha > Omaha: the Gate city, and Douglas County, Nebraska, a record of settlement, organization, progress and achievement, Volume I > Part 20
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In the erection of the auditorium the projectors found it necessary to give a mortgage of $100,000 to raise funds to complete the edifice. While the roller skating continued to be a popular amusement, dividends on the stock and interest on the mortgage were paid regularly, but after a few years interest in skating ceased and the company began to experience difficulty in meeting obligations. Early in 1915 negotiations for the transfer of the property to the city were com- menced. The result was that in July the city purchased the property for $150,- 000, the final transfer being made on August 2, 1915.
All in all, the City of Omaha is as well provided with public buildings as most cities of its class. The same holds true of Douglas County. Besides the struc-
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tures described in this chapter-which are really devoted to the transaction of public business-there are a number of fine school buildings, the several fire stations, the county asylum and some others that are public buildings in the sense that they belong to the public, but as they are intended for special purposes they are treated in other chapters of this work.
CHAPTER XII
PUBLIC UTILITIES
NEEDS OF THE MODERN CITY-WATERWORKS-FUTILE EFFORTS TO ESTABLISH- LITIGATION-THE PROBLEM SOLVED-CHANGES IN PROPRIETORS-MUNICIPAL OWNERSHIP-HOW IT WAS ACCOMPLISHED-STREET RAILWAYS-SIX COM- PANIES ORGANIZED- CONSOLIDATION OF INTERESTS-THE PRESENT STREET RAILWAY SYSTEM-OMAHA GAS COMPANY-ELECTRIC LIGHT AND POWER COM- PANIES-NEBRASKA TELEPHONE COMPANY.
In the matter of public utilities and public service corporations, Omaha is as well supplied as most cities of its size. Many of the comforts and necessities in the modern city are dependent upon such utilities and corporations-a fact that the people of the Gate City have not been slow to recognize. One of the most serious problems that cities have been called upon to solve is to provide a plentiful supply of water suitable for all purposes. Another problem is to light the streets at night, and as the city expands over a larger territory those living in the outskirts require some method of transportation to enable them to reach the business center quickly and at small expense. Water, light and transportation are therefore three of the essential features of the progressive city.
WATERWORKS
Before the City of Omaha had been incorporated three months the members of the council recognized the necessity of some system of water supply, especially as a matter of protection against fire. The records show that early in April, 1857, the city engineer was instructed to ascertain and report "whether it will be practicable to bring the water from Omaha Creek, west of the capitol, by means of a siphon, to the principal streets, to be conveyed into cisterns for use in case of fire, and the probable cost of the same."
The engineer made the examination and reported that the plan was not prac- ticable and the cost would be greater than the city could at that time afford. For nearly seven years the subject was allowed to rest, but in March, 1864, the coun- cil directed O. F. Davis, then city engineer, "to examine and report whether there are any springs within the city limits from which water may be brought into the city for the purpose of extinguishing fires, and, if not, that he be requested to report some other feasible plan to supply the city with water." If Mr. Davis ever made any report upon the subject it was not recorded in the minutes of the council.
A year or two later cisterns were built in the business portion of the city and
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filled with water pumped from the Missouri River, but the water was unfit for domestic purposes and on several occasions the cisterns proved entirely inade- quate as a means of fire protection. It was apparent that some better method would ultimately have to be adopted, but the financial condition of the city would not permit immediate action.
In April, 1870, T. T. Flagler, president of the Holly Manufacturing Company, of Lockport, N. Y., addressed the council upon the subject of waterworks, urging the advantages of the Holly system of direct pressure as being superior to all others. His company had built waterworks in a number of cities and Mayor Ezra Millard read letters from the mayors of some of these cities stating that the system was entirely satisfactory. While the council was impressed by Mr. Flagler's address and returned him a vote of thanks, no action toward installing a system of waterworks was taken.
In the fall of 1873 the council decided to try the plan of boring one or more artesian wells and advertised for bids for sinking a well 2,000 feet deep. The lowest bidder was W. E. Swaim, of Joliet, Ill., who offered to bore the well, six inches in diameter, and provide proper casing for $6 per foot for the first 500 feet, $8 per foot for the second 500 feet, $9.50 for the third 500 feet, and $10.50 per foot for the fourth 500 feet, or $17,000 for the well complete, with a rebate of $2.40 for each foot not cased. These figures were so far above the anticipated cost of the well that the council declined to authorize the issuance of bonds to do the work and this ended the attempt to obtain water by means of artesian wells.
Another futile attempt to establish waterworks was made in March, 1874, when the council adopted a resolution authorizing a bond issue for that purpose. At the same time J. H. Congdon, James Creighton, Herman Kountze, J. E. Boyd, W. W. Marsh, J. E. House, Jonas Gise, John A. Horbach and Alvin Saunders were appointed a committee to visit various eastern cities and inspect the differ- ent systems of waterworks, and there the matter ended.
In February, 1879, the council adopted a resolution directing the committee on public property "to inquire into the feasibility and expediency of establishing a system of waterworks, and also to investigate and advise the council as to the propriety of submitting to a vote at the spring election the question of voting bonds for that purpose." The following month the committee reported that the financial condition of the city was such that the council would not be justified in making the outlay necessary to establish a system of waterworks commensurate with the city's needs. The report closed with the recommendation that the city attorney "be requested to advise the council just what proceedings, legislative or otherwise, are necessary to enable the city to raise the funds required to pro- cure a permanent and efficient system of waterworks. The report was adopted and on July 9, 1879, an ordinance was passed on first and second readings, author- izing the city to enter into a contract with S. L. Wiley & Company for the con- struction and maintenance of a system of waterworks.
The introduction of this ordinance was the beginning of a contest which lasted for a year or more, in which a great deal of ill feeling was engendered. On July 23, 1879, Dr. J. T. Cushing, agent for the Holly Manufacturing Com- pany, invited the twelve members of the city council to accompany him to Ot- tumwa, Iowa, to inspect the waterworks put in there by S. L. Wiley & Company,
OMAHA CITY HALL AND THE BEE BUILDING
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and then go on to Burlington, Iowa, for the purpose of inspecting the Holly system in use in that city. Councilmen Jones, Hascall, Stephenson, Kaufman, Labagh and Redman, half the members, accepted the invitation, but the others declined. Jones, Hascall, Kaufman, Labagh and Redman were converted by this visit to the Holly system and won over to their side Councilmen Riepen, Shannon and Slaven. These members became known as the "solid eight," but every measure they tried to put through the council to install the Holly system was vigorously opposed by Councilman Dailey, Dodge, Kennard and Stephenson, and their vari- ous ordinances were vetoed by the mayor. Public sentiment generally favored the reservoir and gravity system to that of direct pressure, such as was employed by the Holly Company, and mass meetings were held in the courthouse to give expression to this sentiment. On August 9, 1879, a petition, signed by James E. Boyd, William A. Paxton, James K. Ish and O. C. Campbell, was presented to Judge James W. Savage, of the District Court, asking for an injunction to restrain the city authorities from taking further action with regard to entering into a contract for the construction of waterworks under an ordinance passed the day before by the "solid eight," authorizing the installation of the Holly system, but which had been vetoed by the mayor.
While this petition was pending in the District Court, Edward Rosewater, editor of the Omaha Bee, on August 20, 1879, caused the arrest of Dr. J. T. Cushing, the Holly agent, on the charge of "bribery and the attempt to bribe certain members of the city council." In the hearing before Justice Powell, Dis- trict Attorney A. N. Ferguson appeared for the prosecution and Doctor Cushing was represented by John C. Cowin. A number of witnesses were examined in the effort to show that one of the councilmen had been offered a suit of clothes to change his vote in favor of the Holly system, but the evidence was not suffi- cient to sustain the charge and Cushing was acquitted. The incident shows, how- ever, to what extent the ill feeling over the subject had developed.
On September 6, 1879, the injunction proceedings came up before Judge Sav- age. The petitioners were represented by George W. Doane, Edward Simeral and John D. Howe, and the city council by Eleazer Wakeley, John C. Cowin and George E. Pritchett. In the complaint submitted by the petitioners it was set forth that the ordinance was unconstitutional; that the law authorizing the con- struction of waterworks contemplated that the city should be the owner thereof ; that the ordinance was unreasonable in its provisions and void because it granted exclusive privileges to one company, allowing no opportunity for competition : that it was prejudicial to the city and favorable to the waterworks company in that it did not provide for limiting the franchise in price, and in not providing that the city might purchase either the franchise or the works at the expiration of a given number of years; and that the necessary expenses of the city already provided for would more than consume the entire revenue derived from the tax levy of that year. Two days were occupied with the hearing and Judge Savage took the question under advisement until the 13th, when he rendered an exhaustive opinion in favor of the petitioners and granted the injunction.
On the same day this opinion was handed down by the court, the "solid eight" called a special meeting of the council and passed substantially the same ordi- nance, except that the word "exclusive" was stricken out as applying to the fran- chise in the former ordinance. It was promptly vetoed by the mayor, but four Vol. 1-10
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days later was passed over his veto, Councilman Stephenson, of the opposition being absent. Before anything could be done under the new ordinance, injunc- tion proceedings were commenced in the District Court and again Judge Savage rendered a decision adverse to the "solid eight" of the city council. This was followed by a "cessation of hostilities," but on October 14, 1879, an ordinance was introduced authorizing the city to enter into a contract "with any responsible person or corporation to construct waterworks." Several amendments, favor- able to the Holly system, were offered and adopted and the amended ordinance was finally passed over the mayor's veto. In February, 1880, the council entered into a contract with the Holly Manufacturing Company ( the mayor refusing to sign the contract) and that company shipped to Omaha and distributed along some of the principal streets large quantities of pipe for the water mains. In March a tract of ground immediately north of Hanscom Park was procured as a site for reservoirs and the company commenced work on the plant.
At the city election on April 6, 1880, several new members of the council- men who had been opposed to the Holly system from the beginning-were elected. Among these was James E. Boyd, who had been the leader in the injunc- tion proceedings. Ten days after the election the new council held a meeting, at which the city attorney was asked to give some information as to "the present status of the contract between the city and the Holly Manufacturing Company." At another meeting on the 20th A. J. Poppleton, who had been asked to give a legal opinion as to the legality of the contract, presented as his opinion that the ordinance under which the contract had been made was not legally passed; that the acceptance and bond of the Holly Company were without effect, because its articles of incorporation had not been acknowledged; that the ordinance passed was in effect the granting of illegal, exclusive franchises; and that the mayor, in his official capacity, was a necessary party to a valid contract in respect to the waterworks.
Being thus advised, the council passed a repealing ordinance under a suspen- sion of the rules and on April 22, 1880, J. D. Cook, an engineer of Toledo, Ohio, was employed by the council to prepare plans for a system of waterworks for the City of Omaha. Upon the completion of his plans and his report to the council, an ordinance based upon the requirements of his plans, which provided for reservoirs for settling and storage, was introduced and passed without a dis- senting vote. The city clerk was directed to advertise for bids for the construc- tion of the works in accordance with the provisions of the ordinance, and on July 20, 1880, the contract to construct the waterworks for the city was awarded to a company of local capitalists, composed of Sidney E. Locke, Samuel R. John- son, Charles H. Dewey, Nathan Shelton, John T. Clark and Milton Rogers, under the style of "Sidney E. Locke and Associates." This contract, which was for twenty-five years, required the plant to be completed and in operation within two years. The company was soon afterward reorganized as the "City Water- works Company" and pushed the construction of the waterworks with such vigor that the water was turned into the mains early in September, 1881. The vexed problem was at last solved.
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CHANGES IN PROPRIETORS
The waterworks as first established by the City Waterworks Company included seventeen miles of pipe and was a combination of the direct pressure and gravity systems. A pumping engine, with a capacity of 5,000,000 gallons, raised the water to a reservoir of 10,000,000 gallons capacity on Walnut Hill, 305 feet above low water mark in the Missouri River. On July 1, 1886, the original com- pany sold its stock to a syndicate represented by S. L. Wiley, of Boston, for $1,300,000. A year later the Wiley syndicate sold the plant and franchise to the American Waterworks Company, of Chicago, a corporation with a capital of $4,000,000, which operated the plant until September, 1891. It was then sold to the American Waterworks Corporation, of New Jersey, which operated the water- works at Omaha and Denever, Colo.
In the meantime the Chicago company had greatly increased the capacity and usefulness of the Omaha works by removing the pumping plant to Florence, where the water supply would be free from contamination by sewage, the new works there being opened on August 1, 1889. On February 11, 1892, owing to a dispute among the stockholders and a contest for control of the company, Judge E. S. Dundy appointed Ellis L. Bierbower receiver, but the suit for possession and the appointment of the receiver did not in any way interfere with the service rendered to the people of Omaha.
MUNICIPAL OWNERSHIP
In 1896 the Omaha Water Company secured an extension of its franchise from the city council, although the original franchise still had twelve years to run. R. B. Howell, then city engineer, reported against the extension and the ordinance granting it was vetoed by Mayor Broatch. The council was then enjoined from passing the ordinance over the mayor's veto. This started a fight for municipal ownership and in 1897 the State Legislature passed an act provid- ing that no franchise could be granted without a vote of the people. Notwith- standing this act of the Legislature, the new city council granted the franchise as asked by the water company, which action was approved by Mayor Moores, but the ordinance was subsequently declared void by the Supreme Court.
In 1900 the people voted, by an overwhelming majority, to issue bonds for the purchase of the waterworks, but the council declined to act. Thus matters stood for three years. In 1902 R. B. Howell, formerly city engineer, was elected to the State Senate, where he introduced and secured the passage of a bill requiring the city council to obey the mandate of the people by purchasing the water plant. The bill also provided for the establishment of the .Omaha Water Board. As a result of this measure the council appointed appraisers. While these appraisers were engaged in their work, the Legislature of 1905 passed an act depriving the city council of all authority in connection with the waterworks and vesting that power in the water board.
The appraisers appointed by the council made their report in 1906, a majority of them agreeing upon the value of the water plant as being $6,253,000. The city appealed to the United States District Court, which declared the appraisement invalid. Then the water company appealed to the United States Court of Appeals,
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where the decision of the District Court was reversed and a decision handed down in favor of the water company. In 1908 the city carried the question to the United States Supreme Court and while it was pending the city in 1909 voted to issue bonds to the amount of $6,500,000 to pay for the water plant. The decision of the United States Supreme Court sustained the Court of Appeals in the appraisement case and when the city tried to sell the bonds voted in 1909 they were found to be unsalable on account of the interest rate. A special election was therefore called in July, 1911, to vote on the question of a new bond issue, but the proposition failed to receive the required two-thirds vote. Fradulent election practices were openly charged by the friends of municipal ownership and the question was again submitted to the people within thirty days. This time the citizens were fully alive to the importance of the situation and the bonds carried by a vote of twelve to one. The bonds were sold to Kountze Brothers, of New York, and on July 1, 1912, the city took possession of the water plant and all its appurtenances.
But the struggle was not yet over. South Omaha and the large packing houses located there threatened to withdraw their patronage, which would occasion a loss of $220,000 annually in the income derived from the sale of water. To over- come this difficulty, the Legislature of 1913 passed an act creating the Metropoli- tan Water District, which gave the water board control of the entire territory furnished with water by the works, thus saving the income.
Since the water plant became the property of the city in July, 1912, improv- ments costing $400,000 have been made. These improvements include the raising of some of the settling basins, thus increasing the storage capacity 3,000,000 gallons; the construction of a new basin (No. 6); with a capacity of 15,000,000 gallons; the erection of a new smoke stack II feet in diameter and 200 feet high ; new coal bunkers; the installation of an electric light plant and arc lights over the 119 acres belonging to the plant, and a number of minor improvements to reduce the cost of operation in the future and insure the purity of the water supplied to consumers.
On March 14, 1916, was published the first report of the audit of the water board's accounts by state officials, under a law passed by the last preceding Legis- lature. The report covered the year 1915. The report shows the income from operation of the plant for the year as being $774,880. Deducting the cost of operation, a reserve for depreciation and doubtful accounts, the net income was $436,842. The report then goes on to say :
"For the period under review the saving to small consumers approximates $263,363, due to a change in the service and a 40 per cent reduction in the maxi- mum water rates. For the same period the saving to the city has been $12,762, due to the installation of a large number of hydrants without a corresponding increase in taxation.
"These two items, amounting to $276,125, are a saving in addition to the net profit of operation of $217,985, of which $130,034 was placed in the sinking fund and $87,951 added to the surplus. The approximate saving and net profit have thus amounted to $494, 110, from which should be deducted $129,763, the prob- able maximum amount of all taxes which would have been payable under private ownership."
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STREET RAILWAYS
In 1867 the Territorial Legislature passed an act, in which Ezra Millard, George W. Frost, Alfred Burley, David Butler, A. J. Hanscom, Joel T. Griffin, J. F. Coffman, J. W. Paddock, William Ruth, C. S. Chase, R. A. Bird, Augustus Kountze, George M. O'Brien, E. B. Chandler, John McCormick and J. R. Mere- dith were named as the incorporators of the "Omaha Horse Railway Company." The act of incorporation gave the company the right "to lay out, construct, main- tain and operate a single or double track railway, in, on, over and along such streets, highway or highways, bridge or bridges, river or rivers, within the present or future limits of Omaha, or within five miles adjacent thereto, as said company may order or direct, for the uses herein specified; but the said company shall not build a track through, except for crossing purposes, Fourteenth Street, or any other street through which any other railroad company has already obtained the right of way."
The franchise was granted for a period of fifty years from January 1, 1867, and the capital stock of the company was fixed at $100,000. Under the provisions of the act, the company was required to have one mile of properly equipped road in successful operation within two years; steam was prohibited as a motive power, and at the expiration of the franchise the property of the company was to revert to the city.
With commendable zeal the company went to work on a line, one terminus of which was at the intersection of Ninth and Farnam streets and the other at Eighteenth and Cass streets, which was completed and in operation before the expiration of the two years, as required by law. The fare on this line was 10 cents, though by buying tickets at the rate of eight for 50 cents the cost of transportation was somewhat reduced. Stockholders rode free, and as there were a large number of small stockholders the income of the road for the first few years was just about sufficient to pay the operating expenses. In the spring of 1872 the company took off the conductors, installed fare boxes in the cars and reduced the fare to 5 cents.
About the beginning of the year 1873 A. J. Hanscom, who had been engaged in purchasing the interests of a number of small stockholders, took control of the road and operated it until the first of the following July, when he sold his inter- ests to W. W. Marsh. In 1878 the road, with all its equipment, was sold to the highest bidder for cash by the sheriff, to satisfy certain mortgages against the property. Mr. Marsh was the highest bidder, securing the entire outfit for about twenty-five thousand dollars. He extended the lines to St. Mary's Avenue, Six- teenth and Eighteenth streets, and otherwise improved the property, adding materially to the service. Frank Murphy, Guy Barton and S. H. H. Clark each bought a one-fifth interest in 1883, when a new company was formed with a capi- tal of $500,000.
About this time a competitor appeared in the field. The Cable Tramway Com- pany of Omaha was incorporated in June, 1884, by Isaac S. Hascall, Casper E. Yost, Fred Drexel, Charles B. Rustin and Samuel R. Johnson. A power house was built at the corner of Twentieth and Harney streets and the first line was completed in December, 1887. Within a short time about four and a half miles of double track were in operation. In May, 1888, the company secured a new
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franchise, giving broader privileges, including the right to run cars upon any of the streets of the city. A reorganization was effected in December, 1888, when the capital stock was increased to $2,000,000, the amount fixed by the new fran- chise. In the reorganization, Samuel R. Johnson was elected president; L. B. Williams, vice president ; C. B. Rustin, secretary.
The third street railway to operate a line in Omaha was the Benson Motor Company, which was organized in the winter of 1886-87, by W. L. McCague, C. E. Mayne and E. A. Benson. Early in the spring work was commenced on a line running from the interesection of Lowe and Mercer avenues to the center of "Benson Place," a large tract of ground just west of the city limits, which tract had been platted the preceding winter. This line was about three and a half miles long and was ready for business in a few weeks. The first motive power was a "dummy" locomotive, but objections were raised because of the tendency of such a machine to frighten horses, and a petition was presented to the board of county commissioners to declare it a nuisance. The locomotive was discarded and horses substituted. Subsequently the line was made an electric railway under the name of the Benson & Halcyon Heights Railroad.
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