The Sauk Centre herald. (Sauk Centre, Stearns County, Minn.) 1886-current, 1919-07-10

making your total operating expenses
$20,749.17. Assuming these latter
figures are correct then your plant
has net profit of the difference be-
tween $22, 1925 and $20,749.17, or
$1,442.O9. If this construction item of
$1,5342O can absolutely be set up to
your capital account then your net
earnings are just that much more, but
strictly speaking and from an operat-'
ing standpoint, you will always find
that if plant earns any money at all
it always goes back into new con-
struction and the profits earned in
that manner. Hence, you can figure
your net profits as above stated ST.
442.09, or $1,53420 more, if this
charge is proper capital account
charge, making your net profits ST.
976.29.
Now one word in regard to de-
probation. You have set up the sum
of $2,175.54, which is 10 per cent of
your earnings. This is not correct
way to figure depreciation. Taking
your statement as basis, your de-
probation on your power plant build
ings, unless the vibration is too great,
is not large, but your depreciation on
your engines and machinery of $780,
O46.4O, is large. Assuming that this
machinery was all new and without
vibration, the life of this plant would
not exceed twelve years (and per
sonally and FIRMLY believe ten years
knowing Diesel oil engines as do)
which will be equivalent to 8 1-3 per
cent. Taking into consideration the
vibration in your plant, your de-
oreciation already has been very large
and will continue to be large, and |
have taken this matter up with some
most excellent engineers, Vaughn &
eyer, of Milwaukee and the Chas.
L. Pillsbury Company Of Minneapolis,
md it will not be safe for you to
figure your depreciation at less than
30 per cent of the normal life of this
Hachinery, or 2-10 years, which is
equivalent to practically IA per cent
on this item Of s29, O46.00. % ~t- (
The depreciation on your distribut-
~g system is also large, due to it's
2ee; much of this wire has been there
for some time, many of the poles are
old and have been in the ground for
-;o-ne time, as well as cross arms and
many OF the transformers are Old, un-
Ter size and practically obsolete. From
! business standpoint, the depreciation
On your distributing system should bS
figured at fully Is per cent, and you
will find that any high class engineer
who will give you true and correct
advice on these matters will agree
With my figures. If this system was
.:bsclutely new the depreciation you
1.now would be much les.
Taking this as a basis, you win
leadlly see that your depreciation is
fully $500. Again, with reference
&c your engines and machinery, $ss
946.0O, and with your vibration-an1
rom your experience in driving auto
.Iobiles-you know how the bulk OF
this material will crystalize. By APP
olying the true and correct deprec:a-
,icn items, say at $6,50O.O0, which
igu2es the depreciation entirely too
low instead Of your books showing q
profit of $1,442.G9, or after giving
you the benefit OF $1,534.ZG adted te
equipment showing a benefit Of 81
975 90, you actually have a loss 81
;3,524.0G according to your own state
,crlti. This depreciation has nci
,etn lied out by n1ys4i. or by anS
# my OWL engineers, !u-, as above
,,5ated, have consulted the above
ugh class engineers who are proIaaf!
well known to you.
Again, these figures are also mad
.itliout setting anything aside .of ull
cyoidable accidents. 1t is absoiutc!.
1safe for any company to n.aintin
/ liant without setting aside a fund TO
CHS purpose. You carry insurance
oHt under your compensation act if
man is only injured you would have I
| pay a certain sum yourselves an
4 from wind storms, cyclones and var
! ious other causes, as well as the pub
lie, one must meet with losses. w
had to pay $4,000 besides heav
Eccsts for child having been killed I
an electric wire, where, as matte
of fact, there was DO liability. In
case of accident being lightning
! Again, you only show a loss IN poo
accounts of $76.75. There nc
, another company in the state OF Mir
nesota that can do Volume IF bra
ness Of something over SCI 900, wit
as small loss as this, and J hsfdl
thinL that vcu can hope to continu
business with such small loss. = |,
). There is nothing this year to sho
the amount paid the mill as standt
plant and / do not know whether an.
thing is to be paid or not.
Now, if your city was to sell i
} plant aside from meeting with tn