Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1920-10-25

$zVV,VVV. 1ne oevelopment at SkoWe
hogan is partially completed and the
estimated amouAt in addition to that
already expended which will be ex-
pended is 100000 to 100000.
With reference to additional work
ing capital. the commission says, a
word is necessary. During the pres
| ent year the Central Maine Power Co.
has obtained control of the Andres
coggin Electric Co, the Knox County
Electric Co. and the Oxford Electric
Co. Being in control and in active
operation of these companies as we'll
j as the plants Of its own and its other
1 subsidiary companies. it must in the
i first instance see to the financing Of
any extensions or additions by any of
these subsidiary companies. It. is
also carrying on merchandising
business which will amount to about
100000 year and is now engaged
in construction work which involves
an expenditure of about $4,000 900.
Before acquiring the Androscoggin,
Oxford and Knox plants, the company
did a central station business of
little more than LOCO, 900 a year and
will now increase that to about 3d.
4 100000 year. All of the expenses
of it's merchandising and construction
business have of course increased,
and the necessity for some increase
III it's working capital is apparent. If
d working capital of $15000O was
sufficient a year or two ago. much
larger amount is now necessary, in
view of circumstances just mentioned.
At the hearing and during some of
the conferences which have been held
since, the commission raised the point
that a working capital used for con-
struction purposes might result in
some complications with reference to
interest during construction and with
reference to the uses which an ordi-
. nary working capital might properly
be put to. The auditor of the COM
pany and our own chief accountant
now feel confident that the books of
the company can and will be so kept
and audited that no such complica-
tons will arise. The amount of
,s250.000 additional working capital is.
Yin our Judgment, not excessive or I'M
reasonable, and will be allowed, with
the undefsta nding that there may and
probably will arise the necessity for
a reduction thereof when the present
construction being carried on by the
company has been completed and
when costs and prices are reduced as
we all hope and expect they will be.
The company has been selling its
preferred stock. at st07.5O per share.
For the past year and half or more
1t has been conducting the sale of
tn s stock inside it's own Organiza-
ten. In other words, it has built up
a security selling organization and is
not placing it's stock for sale in the
hands of bankers or brokers, but is
selling all of it's stock through the
efforts of it's own statesmen. In the
beginning of it's selling campaign. of
course, the expense per share was
relatively large and exceeded the
$3.50 excess above par at which the
stock was being sold. Lately the
selling campaign having gotten well
under way. the expense has decreased
and 1t is probable that from now on
the expense will be less than $3.50
per share. With the per cent. stock
already sold and that which we shall
herein authorize, the company will
have issued and sold to the public at
s107.50 per share more than 100000
worth of stock. The proceeds of this
stock have all been used in what is
termed original financing, that is,
none OF it has been used to refund
: existing obligations Of the Central
Maine Power Co. Although the COM
pany has received in money or it's
equivalent for each share of stock
sold only approximately 800 and the
balance of the selling price, namely
company feels and urges that the full
amount of s107.50 per share should go
upon its books as representing the
cost to the company of the facilities
or properties created or purchased
and that this amount, rather than
approximately 800 per share. should
be regarded by this commission as the
amount which the company has in
vested in capital expenditures. The
commission has given this matter
careful consideration. In one other
instance we have been asked to con-
s.der and determine a somewhat SINH
lar matter. In the earlier instance
in the case of original financing bonds
Of company were issued and sold at
less than par and we were asked to
allow. and did allow the par value of
the bonds to stand upon the books OF
the company as the actual capital ex-
pentliture. upon the theory that the,
company had issued a definite gross