The Sauk Centre herald. (Sauk Centre, Stearns County, Minn.) 1886-current, 1919-07-10
making your total operating expenses

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, 1926 and $20,749.17, or
$1,442.O9. If this construction item of
81, 53420 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 $1,534.20 more, if this
charge is a 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 s 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 &
.cyer, Of Milwaukee and the Chas.
I. 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
aachirery, or 2-10 years, which is
equivalent to practically IA per cent
on this item of s29,046.00. " o. 4
The depreciation on your distribut-
rg system is also large, due to its
s1ee; much of this wire has been there
for some time, many of the poles are
old and have been in the ground for
3one time, as well as cross arms and
many OF the transformers are Old, I'M
Ter size and practically obsolete. From
business standpoint, the depreciation
On your distributing system should be
figured at fully Is per cent, and you
viii 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 .es-.
Taking this as a basis. you will
readily see that your depreciation is
fully $500. Again, with reference
to your engines and machinery, $50
946OO, and with your vibration-an'
rom your experience in driving auto
mobiles know how the bulk OF
this material will crystalize. By APP
dying the true and correct deprec.a-
len items, say at $6,500.OO, whict
iga1es the depreciation entirely tot
low instead Of your books showing 3
profit of s1,442.G9, or after giving
you the benefit OF 81, 534.z0 adsied tt
equipment showing a benefit Of 81,
3z5 90, you actually have a loss O
23,524.0G according to your own state
,.crlt.;. This depreciation has nc
zen uied out by n1ysei; or by AM
II my owa engineers, !:u-, as abost
stated, have consulted the abov,
ugh class engineers who are proLaaf.
well known to you.
Again, these figures are also mad
'5.ithout setting anything aside tor uIl
-avoidable accidents. 1t is absotutel.
lsafe for any company to nlaintin ;
liant without setting aside a fund 70
5llis purpose. You carry insurance.
oat under your compensation act if
man is only injured you would have I
BAY a certain sum yourselves an
! from wir.d storms, cyclones and val
\ ious other causes, as well as the pul
lie, one must meet with losses. w
had to pay $4,000 besides heav
costs for child having been killed I
an electric wire, where, as matte
/ of fact, there was DO liability. fh
ea..se of accident being Lightning
/ Again, you only show loss In poe
accounts of $76.75. There nj
another company in the state OF Mil
nesota that can do a volIme II. brs
ness If something over 81, 900, vi.
as email loss as this, and ] hsfdl
shinL that vru can hope to contins
business with such small loss. =
4 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 j
plant, aside from meeting with th
loss (which ! believe to be conrsrv