Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1904-04-07

l HIS increase III itcJ earnings Is DISeu
Oh the assumption that quality of water
remains as ut present. Improved quail
ity of water always means greater net
income to company. To find the going
concern value of the plant l took the
normal earnings of the property for the
first six years, which was the period of
development, and reduced it to its
present worth at per cent. This gives
the sum of $14,lS3. Another method Of
finding the going concern value VAS to
take the first six years after the trans
fer Of the company and TO take the in
come us shown by the law of increase,
then assuming that a new plant Were
built with the same income rs this
plant for the first six years. This i'll
come reduced to present worth equals
$i2S,034. \ third method is to take in
come of II year in the future and as
sumo that was to be the uniform III
come in the future and suhstract from
this the actual earnings of the first SIX
years ard reduce this to present worth
This gives $l0f,420. a fourth method
was; 20 assume that an undcVelopcd
plant would get at the start onc-fourth
| OF the net earnings which the old.
plant has. today, and at the end Of six
yc'rs would be getting what the o.d
plant gets today. This income for six
! years reduced tn present worth would
be $1S91S. These sums are all based OH
assumption. Tho problem is 10 find
how long il would take Il new plant 20
get the earning capacity OF the existing;
| plant My Judgment is that it would
take from l. to y years for Il new
| ,,I., hi ..it tn t,h
net earnings of the existing company
| which has done business here Is years.
| IN iii my assumptions | have put the
period ut 6 years, however. still other
methods than the four described give
results of $74.201 ana S19,93S My judG-
nrcut Of the going concern value Of this
company is shat il is $4,000
| on cross-cxamination NJ. Shrdd
| testified: This curve idea is M cn-
Ginccr's way III Judging the future "
thu past. 1t assumes that past factors
viii not change in the future. | took
| tie list of revenues rs given by Nj.
Manlny. ] did not examine into tn"
| factors behind the figures. The as
sumption is that tho operating causes
of the past will prevail! in TIL" future.
! TO get the income Of $i5.cA0 TiVon 10"
| 1912 there would have to be Il large il
croaye in the number Of takers Ii
would mean a population of about %
| coo. unless there were abnormal i'll
| creascS in the industries Of I'll" CITY.
! Pure water would not mean an increase
Of rcNenu" from those TOW taking
water of the company. The Increase
I W0u,d have to come from new takers.
| Never have been on tho stand before u
explain theories of going concern
value Have worked them out from the
standpoint Of an engineer. not on any
method suggested or approved by any
court
Eneincar Allen was :"call~I W. tn"
opening Of tho afternoon session a'rd
testified IS foinWs: Helped E!r
shield project his cur'." " fu;nr" in-
/ come Of the system. as testified tn this
morning. II shows InAthcmati~lIIy
| the u obablc income III Tho future c.n-
| ditiors remaining rr;irticriIy N, 1T
present. Have also had sos" rrac;i, .
in estimating going concern values. a.!
have cxaminei this plant with such I'M
| estimate in view. set il 1T $4,000.
hasirc 1t rron gross ana not incomes
! of East and present. If = new ;,Isn.
| were eSt3olShed mere. com, ."t"ly con-
structe! but without business it would
! take il 10 to Il years to nvartakc TIE
earnings of the existing plant at pres
! cnt tire
on cross examination Mr.. Auan
said: Ten to l. years is not an ur-
/ reasonable time AZ shown by actual
experience in other cities. Every cas-,
! must be determined ~ local conditions;
! of iIat. particular place. Have testi-
| fed in earlier cases and was a CON-
! missioner in TWO Mdssa husotts cases.
| | testified at Dov"r that I had figure. /
the going concern value ut - rer CENT.
of cost OF works. Do not recall testi-