Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1916-09-19


found In the assets Of the company al
Of June 80, 1915, and which should
be added to the foregoing Items tc
ascertain the total investment, Ii
(E. N. s. p. 1867. 35s3.52s.o0.
From the foregoing Items We have
made UP the total investment In the
plant. business and working capital
as Of June 30th, 1915. as follows;
Physical value Of plsnt
NAJ .....,... .s..... So,lS4,o6U.Ot
Working capital d.. 241,?9S,S(
Development Expense
w .................. IoV,VVV.Ul
Amount In depreciation
reserve (D) ........ 5SS,52S0C
Total, ............ A,769, 506.Ss
We conclude that this sum, las,
named, Is the amount Of the com
pany's investment, which constitutes
the investment In the plant, business
and property upon which It is emit
tied to receive fair return.
IL We had accepted the estimate
Of Messrs. Haskins 4 Sells and had
added $3,71S.210.91 as the develop
ment expense, to the other items Of
the investment, the total valuation
for rate making purposes at the pres
ent time would be $7,T37717H9 III.
& s. SpeciaD.
The estimates of B. J. Arnold re.
suited in finding q total investment
/ Of $6,3S2.572.00 (B. J. A. p. ~, this
including development expense OF
$1,6s2,112,o0, tB. J. A. Add, p. 14.).
1t was Mr.. Straits conclusion, az
ter comparing various calculations
which he made for us, that the
amount Of development expense to
be allowed was 1924. 9s3.O0 (E. N. s.
p, 63), and the total investment in
the plant and business as of June
S0th, 1916. should be $500, 100000
e. N. S. p. 72).
! In the injunction suit brought by
the Electric Light Company in the
United States Court. to enjoin the
Butler ordinance, we construe the flg.
utes there asserted by the company
to, mean that 1t claimed an invest.
ment Of $5.53s, 0s3s7, and It appears
from the figures obtained for us from
, its books by the accountants, that It's
outstanding capitalization, consisting
Of the following:
5 per cent bonds. .$2.149,0O0 90
s per cent preferred stock 424,2O0 90
Common stock.......... 1855, 400 90
would be Total. IS, 93S 800. 90
But we have concluded that the
valuation Of s4,76s,5Os.Ss, which we
have fixed as above, is not unfair to
the company and Its stockholders,
and constitutes a necessary reduction
from the values claimed by it and
from those recommended by the ex.
perts, in order to do justice to the
customers Of the company.
E. The committee has made
careful study Of the question of the
rate Of return which ought to be al.
lowed for investments Of this char.
acter. 1t is obvious that capital can.
not be employed on terms fixed by
the municipality seeking the services,
mol. by any rule Of law. The employ
ment Of private capital, like the pro.
curement Of any other commodity,
responds to the law OF supply and
demand. That rate Of income must
be allowed which will attract capital
to the investment. Otherwise the
business could not be established In
the first instance, and going bust
ness could not obtain the needed
capital to permit of Its enlargement
and development for a growing COM
munity.
The entire capital necessary to e.
nance such an enterprise and pro.
vide for Its enlargement and develop
non'' oanno. NC op'a'heu upon 'ne
e"fio i"ee VI return do 'ne INTEREST
upon "eii''ecureu ooha' ouch en-
terprises are usr"lly financed, partly
ny "Aohoy p'o'iueu ny s'ochno'uers'
anu par'y oy al issue Vi poiias con-
tr - 49, ., p.n WV rIp
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w. ost,.,,nsnsu. wv ..'sa
v, nn.,n"na y, 49, gu" -. us.e''p =. s
-. w -. " WI. s'" . 80, ""
oo W W ''e pn. ''"e az 'e"o.'
49, 49,, 80, ,o Va
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