Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1917-04-24

'" NNNiSloil tIlS DeT"IIh q
Salmon Falls Electric Company to issue
S6l,5oo Of per cent 40-year bonds, at
So and interest, and $4,000 of stock at
par for the purchase CT a water power
partly developed, now owned by tile
Berwick Realty Corporation, formerly
part Of the property of the White
Mountain Paper Company.
This case was first heard in Deem
Der, 1916, and the Commission made an
order January 2, 1917, authorizing part
OF what the petitioner asked for and
criticising what then appeared to be an
attempt by members of the board Of
directors of the Electric Company to
make a personal profit through their
official relations with the purchasing
company. A. H. Bickmore & Co., the
investment house which organized the
Realty Corporation to act as an agency
through which the purchase was to be
made, and owned all of it's capita;
stock felt aggrieved at the criticism.
and the Berwick & Salmon Falls Com
rany asked for rehearing.
The present decision says, relating to
tho first hearing: THE Commission
could, and did, draw no other conclu-
sion than that Bicllmore & Company
this indirect purchase by taking adj
vantage of its representation on the
directorate of The Berwick & Salmon
Falls Electric Company, and we de-
clined to sanction it.
After our decision was made. the
petitioner asked for a rehearing. al
leging that the facts had been misap-
pretended, and the same was granted
mr. he1i ofp
claimed that the rights Of the petitioner
and the reputation of Bickmore & Com
pany had been prejudced by the former
decision, and it was frankly conceded
that if the true facts had not been
learned it was through petitioners
failure to present them fully"
Evidence of dates and amounts
showed actual advances by Mccoy &
Company. mortgage, Of $4,000, and the
i decision continues:
II. therefore now becomes clear that
Mccoy & Company have advanced
$4,000 for their mortgage Of that
amount and that there is no bonus for
this loan, although Mr.. Olds. president
of the Berwick & Salmon Falls Com
pany. could account for only about
4 $4,000 at the first hearing. December
q u, 1916 Presumably he either was not
4 familiar with the details of the financ-
ing which were being carried on In
b New York, or was misled by the fact
I that only about that sum had then
been actually advanced"
THE other item of particular i'm
i portance is the $4,000 of capital stock
A which petitioner wishes to issue to the
/ Realty Corporation above the actual
purchase price. Legally this would
pass to the benefit of Bickmore q Com
2 ~pany, sole stockholders of the seller,
and it is this that we objected to. most
I strenuously."
Mr. Bickmore, who was not present
at the first hearing, now testifies that
it never was his intention to retain this
stock. or any personal benefit from the
trade. but that he believed that the
pronortv to be acquired was in fact
worth that much more than the pur-
chase price and that this stock was 10
he turned over direct to the Twin State
Gas & Electric Company, sole owner OF
petitioners present outstanding stock'
TO represent so much surplus. In order
that there might be no misunderstand-
ing of facts or legal rights in regard 10
this stock. it was agreed at the close or
the hearing:
I" that this property has been
purchased and is being developed with
the intention that it shall reach the
Berwick & Salmon Falls Electro
Comnanv for actual cost of purchase
and development, either in cash or Sc
curities Il = -. So that the techmcal
ownership of this contract and the re-
CENT of whatever securities are issued
bv the Realty Company is for the bene-
fl of the Berwick & Salmon Falls
Comranv and not for the beneft OF
whoever happens to be the stockhoiders
and controllers of the Realty Com
pany."
an view of the facts testified to and
Of the foregoing stipulation. there ap-
pears to be no objection whatever 10
the manner in which it is proposed 10
acquire this property. There Wouio
have been no misunderstanding IL the
New YORK; interests had anticipated
that we would wish for full Information
and had put their representatives III
oossossion of these facts before the first
hearing"
che property. developed according
+o the contract Of sale. is to stand the
Realty Corporation $55,775.23, lncluolns
the Il per cent contractors pront on
tho now construction, and the petition
er is to acquire full title on payment Oh
this sum. plus some accrued interest.
The decision holds that the extra
s25 600 of stock cannot be issued, even
to the present stockholders, and even
If the property to be purchased is
worth that amount above the actuai
cost.
I'VE do not think that this Is nee
essary, or that it can be approved IN
the present proceedings. The actual
cost OF the property is to be s55,775.Z3'
If the additional stock is Issued, the
property must be entered upon the
hooks at so much more than the act
nal cost. but our accounting rules
require that ''all charges made to fixed
capital or other property accounts
with respect to any property acquired
on or after July /, 1915. shall be the
actual money costs OF the property"
Moreover, this proceeding is an ap-
plication for approval Of issue of Sc
curities for the acquisition of property,
and requires the certificate of neces-
sity provided for in section 81, chap
ter So, revised statutes. AS now ex-