The Ogden standard. [volume] (Ogden City, Utah) 1902-1910, 1909-12-13

| on December 18th. &c shares OF sec
ordary stock in the Davis G Weber
! Counties Canal company. On Tues
day following the Examiner attack
ed the board for their action and, in
an article with scare head lines and
dotted with black caps. claimed that
there was a "nigger in the wood pile,
| that there was a man higher up who
was 10 profit BY the transaction and
that It was up 10 the county COM
missloners to set the public right on
| this matter. IL would not be neceS
sary to set the public right had not
the Examiner, ignorant OF the facts
and without any Investigation. set
the public wrong. The facts of the
matter are these:
The Davis & Weber Counties Canal
company is capitalized for S250,000.
The company decided TO double the ca
pacity of their canal and their reser-
voir To do this their articles OF incor~
poratlon were amended by increasing
their stock anothe: S250.000. propos-
ing To sell all or so much Of the new
treasury stock as will be necessary
TO pay for the proposed enlargement
The directors granted the present
stockholders in tho company the priv
iloge of becoming first purchasers of
the new treasury stock il they so de-
sired. by paying the price set upon
the new stock. 1t was this privilege
which the county sold, for a number
of reasons
The county now owns so shares OF
stock which is more than enough TO
furnish water for the County Int1rmary
ftnn nf
their stock to other landholders each
year They. therefore, have no use
for any further stock unless purchas-
ed for speculative purposes and they
do not think that the law grants them
the right TO invest the county's money
for speculation, whether it be in wat
er sugar, cement, railway or any
other stock upon the market
Aside from not having the legal
right 10 speculate in the purchase of
any stock with the countyS money
the value of the "inchoatc" right OF
the county to purchase the stock in
question does not mean in any sense
what the Examiner. in its lack of
knowledge of the facts, seeks TO con-
vcy to the public.
The Examiner says that the coun-
ty sold the right To purchase 80
shares of secondary stock. The fact
is, that the county could purchase only
26 shares. being one-third of so
shares held by them fractional
shares not being issued by the com
pany On December 7th, the Exam
iner said that this right was worth
in dollars and cents about 81 .255,00
and that when the improvements un'
der way had been completed the
right would safely be worth TO Weber
county $3.50 The following day
the Examiner amended this estimate.
reducing it 10 S2,16), based upon the
county's right to SO shares which. and
at the basis of 26 shares, would fix
the Examiners estimate at Sl.755.
This the Examiner alleges that the
board sold for $4,000 to Mr.. ]. C. Nye.
To acquire this right. which at the
Examiners valuation, is estimated at
81 1,T55. what would the county have
to do? First, they must pay $4,000
per share for the 26 shares in ques-
ton OF $1,000. in installments, the last
OF which should be paid In Decem-
Der. 1910. This privilege would en-
able the purchaser TO receive the ben
eft of only flood waters after the ca
nal has been enlarged. which is not
likely to he until the year 1912.
Before this secondary stock can ad
vance TO primary stock. the dam must
be raised so as to double tho capac-
ity of the reservoir. something that
at the most conservative estimates
cannot be done inside of > years
The county would therefore have TO
pay interest at per cent for at least
years on the investment of $1,000
which means $925.Oc, 1t would also
have to bear annual assessments for
the maintenance of the canal on this
secondary stock which. at $500 per
share per year (thls year 1t Is $3.50
per share on the common stock
would mean another expenditure of
$4,000. Thus we have the following:
Original purchase ........... 81 10000
Interest for 3 years on the in
Yestment ..s..,,.s,....... $500
Assessment for maintenance 1900
lOldl ssssss.---..- 3ls iOD.UD
In other words, these 26 shares of
secondary stock when received from
six to ten years from now and eX-
changed for Is shares of primary
Examiners figures $135 90 per share.
or S1.755, and will have cost the coun-
ty at the lowest estimate exactly that
sum. Wonderful profit for a six to
ten-year investment. Is IL not? To an
individual needing the water for his
land IL would be good investment
For the speculator, 1t certainly does
not make a very strong appeal, aside
~
the county could not consistently buy
this secondary stock. The completion
of the proposed improvements will
have no bearing on the present stock
In enhancing its value,
The board had decided not to avail
themselves Of this privilege to spec
ulate, holding that Il was Illegal. con-
sequently when Mr. Nye offered $4,000
for the purchase il was just that much
clear gain on an "inchoate' right
which otherwise meant nothing to
the county in a financial way. Had
the Examiner published another ar
ticle on Thursday and reduced their
Tuesdays estimate al the same ratio
as Il did on Wednesday ii would have
just about hit the mark and would
have set the public right without ask
ing the board to do SO.
Possibly some one else more eager
for the privilege OF investing in this
secondary stock, before the directors
offer It TO the public at large after
December 10. might offer 500 or SIPS
for the privilege; it Is also possible
that had Mr. Nye's offer not been ac-
cepted the county would have re-
ceived nothing for this yaunted priv.
ilege of speculatlng Further than