Los Angeles daily herald., 1888-07-15
rheuoxve Ga, Company.


interested in tracing the causeY OF tt
marvellous growth and prosperfysof IL
Angeles during the past eight years, an
/ observe with no little attention, II
progress this city is now making IN
most every direction, an advance Uni
testifes in the strongest manner 10 tI
peculiar sagacity and enterprise OF az
citizens. The rapid grading and pawn
of the streets; the construction OF ne
lines of cable road, and Of better sy
TEN of sewerage, the numerous pulidlne
now in process of erection, remind on
most forcibly of Chicago in the earl
period of its history. Being therefore
in the right line 10 attain the rank OF
METROPOLIS. it seems to me extremei
hazardous for the citizens Of Los Angelo
to iniure. or to permit to be injured, a
an institution which has done much t
aid in making this city what it is.
1 happened to be glancing over tn
columns of the Los Angeles. Evenin
Erpress, a short time since, when sav
an advertisement with imposing heat
lines. It began: "The war! Gas con
sumers to regulate rates. Gas Tor tw'
years at $1.25 per 1000 CUBIC 1eet.,
s'The Lowe Gas and Electric Company
makes the following proposition to con
sumers: Who now make connectlor
with its mains, that they will supply
gas of 30-candle power. as agalns'
15-candle power furnished by the Los
Angeles Gas Company at $3.50 pei
1000 cubic feet for lighting and " pei
1000 cubic feet for heating, etc."
Then follows: "The company further
proposes to give its consumers, VINO
join with us now, drawback OF one
half the amount of their gas bllls,. Tor
the next two years, in the form OF an
order on its treasury for stock OF the
company, thus making our consumers
and the company's interests mutual,
and giving the former share IN our ou!rI
profits for all time to come, and will
further give all who desire, an oppor-
tunity to purchase other stock and in
terest- bearing bonds of the company"
This reminds me very much OF the ad-
'vertisement 80 commonly seen nowadays,
of divorces obtained without public
ity," the most superficial analysis shows
the above offer to be delusion and
snare.
am not concerned in any gas company
here or elsewhere, and as disinterested
third party, can discuss this proposal OF
the Lowe Company, and it seems to me
that trap has been laid to catch the feet
of the unwary. 1t must be remembered
that the most specious promises anu nat
tering representatives are always MADE
by schemers to rope the public in. Be-
tween 1868 and 1868, millions of dollars
worth of bogus oil and gold mining stocks
were sold to unsuspecting people in the
Eastern States on the strength of false
but Offering statements as to their value
and that Of the property they repre-
sented.
When I saw this offer OF the Lowe
Company to let us all in as stockholders
and sharers in the earnings of the con-
cern, it struck me as very remarkable.
1t certainly is not customary for in.
dividuals, partnerships and corporations
to furnish the capital, take all the risks,
and then let the public in to full par
.ticipation in the profits. 1 concluded
that it would be we'll to know something
of the financial standing and
future prospects of concern
that makes such glowing promises
as the Lowe Company does.
Prima facie Cat first blush) it appeared
as though the company would have us
believe that the more gas we burn the
richer we become, under this unique
and edifying system it has invented.
On investigation, l am credibly in
formed, that the plant of the Lowe Com
pany is valued at $4,000, subject to
mortgage of 100000. The company
Of 81 SOC, 900, bearing six per cent inter-
est, and to issue, in addition,
stock to the amount of $2,OOO,0OO
more. Assuming that the company is
now paying six per cent. interest on its
mortgage debt, we are confronted with
the rather startling fact that the COM
pany proposes to disburse ni1aety-siT thou
sand dollars, annually, in the form of
interest ON its Indebtedness! Adding the
ordinary running expenses of the concern
to this enormous sum, these two items
alone would diminish the dividends to be
distributed to the stockholders to such
infinitesimally small proportions that
they would be "like the baseless fabric
of dream"
Supposing this Lowe Company-which,
1 believe, consists of only Mr.. Lowe
himself-should even partially succeed
in its extraordinary and impracticable
scheme, the bonded indebtedness of the
company would grow out OF all proper
ton to the receipts from the consump-
ton of gas. This would naturally be the
case, as money would have to be raised
to extend and enlarge the plant to meet
the constant demand of new con-
sumers, from whom nothing would
be received at first. When the
mode of managing the concern be-
came thoroughly understood, it is very
unlikely that anything would be paid by
them. 1t is to be noted that consumers
of the gas of the Lowe Company are to
have q rebate of one half of the amount
of their gas bills in form of an order on
its treasury for stock of the company
On principle and authority, if this com,
pany is corporation, and l am informed
that it is, an order for stock is not the
same as the stock itself. In the suits
against Fisk and Gould, in the Erie
Railroad cases, the court held that the
English claimants who brought suit
could not maintain their bill, as they held
only an agreement to transfer stock, not the
stock itself, they suing as Stockholders in
the company. There is nothing, so far,
as appears from the advertisement, to
show what the capital stock Of the COM
pany is, and apparently no limit to the
amount of stock that can be issued by the
concern. All the consumers of gas are
necessarily to have some, and mos
sweeping and all embracing agreement
appears in the advertisement above
quoted, in the language: "Ant
will further give all auho d.
e;re-italics are nv oWu-aYf on