Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1912-03-17
Nebraska
BOARD HAS BOND PROBLEM
Nebraska City Gas Company Case
PerPlexes Rail Commissioners.
QUESTION OF WATER ARISES
Decision Mast he Rcached Whether
\Ans Condition Warrants Aathori-
rntion Of Inflated Paper for
Corporation.
From a staff Cor.esronieut.)

tFrOm Staff CGr.esrondect.)
LINCOLN, March H. especial. 1.-The
hearing today before the railway COM
mission on the. Application Of the Ne
araska Gas company u issue $500 in
socks and s30cee i'll bonds brought out
iercibly the hne Of cleavage which has
b5en apparent in the board for some
tinic. The differences are not personal,
but 90 10 ihcovcry basis OF the policy Of
The commission N matters or capitaliza-
tiun OF pubic 3sSica corporations.
T. l.. Hal holds 10 the theory of the
law that ii prohibits the issuance of
either stocks or bonds unless tangible
property is shown 10 exist to the face
value Of sush securities ana that the
board must have esiderice Of such facts
before il before authorizing the issuance
OF any s,:ah stocks and bonds. The
o.iar two members. Dr. II. y. 'Winnett
and icnR, \. Clarke, jr.. hold to the
ikea that such actual valuation Of prop
city is not necessary IN all cases re-
gai ding stocks, hut that money put into
a property. though il MAY have been
dlssipated as capital. might rightfully
be considered in permitting issuance Of
stock in a company like the one In ques-
ton which has just come through bank
ruPtcy.
Just Us the argument between tic com
missloners was getting down where il
was interesting Dr. Winnett, who Is
chairman u the beard, said the commits
sion would lake the. petition under ad-
Nstment. and debate out the question
smohs Themselves
History Of Case.
y II appears from tie statement Of Frank
ooGver, v ho presented the petition.
bat at the time OF foreclosure the face
VI the bonds and other items amounted
tU SIS 2slls and that the original COM
pany had put. altogether Ssi.0SS7s into
tae plopesty.- The bondholders bought 1t
IN for the upset price. S6oa. and since
that time hGd put m by means OF loans
and BILLS guEranIccd S2i.Sals Their Pc
\ tition is Ia be permitted to organize by
issuing Sjtty IN stock On The assets OF
tile plant ard. ,1100 Ia bonds 10 pay
floating iDt esirdtvss arr '1or. better
| inents and ext6isions.h' Comm.ssit nsr
Clarke by q. cuCst.on bfopsht out the
statemea; fro.a dodvsr that tire. former
bondhoiders who now owned the plant
would have tSAtake tile bonds. as they
were, moi marketahle. 10 pay the. s2l..is Is
whiqh they had advanced and that they
would ,be taken over at less than par
MriIiall sussested that II such Was tie
case there would be nothing left Tor bet.
terments. and that as Mr. Gouver had
admitted. the company was losing money
every month ON the basis .of It's present
producing and serving capacity, the pub
lie would IN no wise be benefited by the
Reorganization Of, The company 81.
Commit sioner Hall sought TO ascertain
from MI, Gouver what the physical value
Of the property as a going concern. was
but Mr.. Gouver said ne did not know but
That at one time the bondholders had
been offered slT.seO for II and that he
Guessed 4 yas worths between $4,000 and
s.eeOa -. ..
Question of improvements.
On the question US TO how the company
expected to make improvements. even IL
the petition was granted. there did not
appear TO be such differences between the
commissioners. but all through the hear
Ing II was evident II was two TO one on
the question Of holding companies down
10 capitalization on the value OF tangible
property. Both Mr.. Hall and Mr.. Clarke
based their contentious on the practice
oi the New York commission, which is
operating under the came law- as Ne.
biaska, but they differed az to.what the
New York cosiihission had decided How
the question wflube decided remains to be
seen. but there Is every reason 10 believe
that in executive session the discussion
is likely to be swarm Mr.. Han insists
that the company bring In an Inventory
showing It ihas sI5,eoo worth OF property,
clear OF incumbrance as the basis OF that
amount Of stock and the proceeds OF any
bonds issued above the stock shall 60
into the property. while II is evident the
other two do not consider It necessary
that the stock should represent tangible
valre equal to the face Of. the stock. ses
III. Gouver pleads that the company
hope 10 make. the property profitable By
better management and thus obtain from
rrofits the, money for improvements AID
10 put value behind the stock issue.
a -. st' :
Thirtieth Anniversary sales.
Brandeis Stores devote entire news