New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-06-21
Edison Light Co.
Admits Surplus
Of s6o,66l,s,l
Protection" Funds Re.
vealed at Hearing on
Rate Application
Set Aside from Profits
Also Has $19,20O,OoO Inv.,,
ed in Other Concerns,
Statements Show
Set Aside from Profit,

" sh"" Nudt Duslrfu
conditions did not warrant any 80
ton in electric light rates. Official, :,
the New York Edison Company adm,
ted at the hearing yesterday before y.
Public Service Commission tina, ;,
company had accumulated A s.,,,-'
undivided profit or contingency fp,l
1t was described by all these ,,,-
amounting 20 about 100000. 900.
Counsel for the commission br,n.,.
out that there were no strings tisSs.
this fund which would preclude II ~.
being used 70 meet the very hus;s.-
emergency which the company pIssS'.
as a reason for not making any fur,S..
REDUCTION IN rates at this time
The hearing yesterday was a co,..
u2tlon of the hearings on the ,en,s.-
agreement of TIE COMPANY las, w."
Der to reduce tie electric light rat.
z cents a kilowatt hour on Juiv
should business conditions war;.
H." The company voluntarily rsJn..,
the rate from S TO ~ cents tho 80.
of last January. IL is now sski,s
be excused from making the fur...
reduction. N''
Auditor Chief Witness
II. NJ. Edwards, auditor Of the ESi,,.
company, occupied the witness s,...
during the entire hearing. n ! u
mems, counsel for the companv ILL.,,
the witness through the explahatin..
OF various statements he had pren,r.,
at the request OF the commission. shsv
ing the operating revenue and he n,
Grating expenses for the first A..
months OF this year, as compared VII.
the same period in 1916. ACCORDING !.
Mr.. Edwards figures the generating re-
enue for the five months this y.,,
showed an increase Of SS60.5l5. q ma.
ter OF 3 per cent, as compared Wi
1916, while the operating EXPENSES y,
the hrst 1--WE months this year had h.
creased Sl,l76,620, or Is per cent.
A controversy arose between the MI.
ness and Judge William A. Rsns-
chief counsel for the Public Serg
Commission, as 10 the propriety oti,.
Guiding several items under "operse,r
expenses Judge Ransom pointed n,
that under the commissions "unifor-
system of accounting" the items would
not be allowed under that head.
Commissioner Hervey called at,sn.
ton TO the fact that while the state.
ment showed that all the taxes levied
on the company for the 1917 period
had been S24l 900 more than in 1915,
the state franchise tax, amounting 70
S35O.OOO, had not been paid for either
1916 or 1917. The witness said tat
the company was endeavoring to r..
a reduction on this tax.
s22,620,5i9 Held in Reserve
Judge Ransom questioned the ",
ness in regard 20 contingent rewm
fund" of S22.620,5i9, as Of May T.
1917 Mr.. Edwards explained that tti
fund had been taken from the prota
of the company for a period Of year
and set aside by the board of direcnn
for the purpose of protecting e,
capital of the company and fortifyirl
its business" On the books Of d,
company, he said, it had been charge.
to Operating expenses" and set ssi:.
as a reserve. The witness declared he
did not take issue with the commissio,
on its ruling that the fund should no,
be considered as Operating expenses
but considered as a surplus.
In answer to Judge Ransom's cues.
tions. the witness stated that, as b.
understood it, the directors were err.
powered to use this fund in any vsT
they saw fit, even to the extent Of psl.
ing dividends out Of il. lie explsine.
that if the company had paid dividend,
commensurate with its profits 70
such fund would have accumulate
The company, he said, paid no div
bends during the first six years Of rs
organization, from 1901 TO 1906. Fr'n
1907 through the first quarter Of isN
the company paid dividends at the rsx
Of per cent, and since then had pei;
7 per cent dividends. The total smoa''
of dividends paid By the compsny
during the sixteen years since Us o.
ganization had been s32B22, 6se, ns
witness said, or an average of AZ T
cent on its investment.
More Funds Set Aside
Judge Ransom introduced g lesw
written by J. w. Lieb, vice-presic'H
and general manager Of the tdlH'
company, to the commission on JAM
airy 81, 1909, in which he stated tiH
the s22,000,00O fund had been accuns
lated to meet fluctuations in bushes
and the cost of materials
Counsel for the commission then "
covered another fund Of s355Is,!'S
designated by the company as corr
rate surplus" which, the witness el
planned, had also been set aside ifoa
the profits as matter Of proteeuoa.
Both Of these funds were az the es
posal Of the directors, according |" 'A'
witness.
It developed that still another ioIs
Of s1,467,s27, 70 be used for "rshess.'
and requirements" had been Scum
lated by resolution Of the board o. :.
rectors by setting aside $40 OF ! e.,
of the price at which a kilowa1 ~,
of current was sold 10 the consume.
There were certain charges yet 70 !,
made against this fund. the wi.ss,.
explained. The total Of these WV
funds amounted 10 $60,66l,53l. A..
Il was further brought out tha' v.
Edison company had made q iosn y
S6,500,000 TO the National City "a ~ =.
pany and had invested about sl,,s.t.,
900 in 6 per cent debenture BONDS Q. -,
Consolidated Telegraph and Elee..
Subway Company. which owns the ~,
duits in which the Edison company
ries its wires. Mr.. Edwards exp!ss.,;
that the company owed S3,5OC'OOV o. c ~
S8,500,000 loan 10 the Nations' 49,,
Company. In all the company hsa ''''
SIC, 200 900 in these investments. =. =,
The principal items which VEN a..
make up the increase in operating h,
penses OF the company, according " a
statement, were for increased e0N
labor. coal. materials and the em.
gency expense Of maintaining
pany of several hundred speeisl sss,
for the company's plants. The hes'
will be continued tomorrow az p
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