The news scimitar. (Memphis, Tenn.) 1907-1926, 1920-09-09

proposition. At the present time prae.
ticslly so per cent OF the gas and cleo
trio company's coal requirements are
being obtained from this mine"
Capital expenditures for 1921 and i@a2.
which win be necessary. the report
shows. will include the construction Of
an electric generating plant, which
might he completed within two years,
at an estimated cost OF $4,000, 900. while
improvements In the electrical dlstribu-
ton system and extensions would add
another S225,000. or a total for the cleo
tric system alone Of $S,990,0o0 for tho
two years.
Expenditures for the gas system for
1921 and 1922 would probably reach a
total OF $3.50, 900, or grand total eN-
penditure for the two plants for two
years OF IS, ssa, 600 These expenditures
from newly invested capital, but return
or interest on the investment plus prop
cr allowance for renewals and replace.
ments will be an operating charge
against the property the report SAYS,
However with the rapid growth Of the
city the new business connections
should take care Of the interest and
renewal and replacement charges"
Proutt's Conclusion.
In concluding his report Mr. Proutt
has summed up his conclusions as fol"
lows.
First That the property is now be-
ing operated at "A very heavy loss,
Second--ThAt due 20 present very
unsettled market conditions it is i'm.
possible to forecast future operations
accurately; we can only use our best
Judgment with present facts before us
IN deciding what the deficiencies may
be during the coming year. But II
the matter Of assisting this company
be considered favorably bv the mayor
and commissioners OF the city of Mem-
phis, assistance should be given by thu
raising of rates such as will take care
~ a deficit Of SS26,2l4.55. and II this
be done. II will establish credit for
the receivers which should enable
them TO handle the affairs Of the com
pany in such n way as will properly
take care OF the needs of the commu.
"Third-The erection OF the coal gas
plant was an error only insofar nj
II failed 10 function. due 70 faulty
construction. Had the construction
not been faulty a saving I'm manufac-
turing cost due TO its operations would
have been ample to Justify the invest
ment.
"Fourth-~The investment Of the gas
and electric companys money in q
coal mine would probably he justified
from an economic standpoint were con-
ditions such that II could be operated
at hngtHllE Inc lNS capacity, Inc tAll-
ure OF the railroad TO furnish cars has
of course had much to do with the
failure Of the coal company up to the
present time to make any reasonable
returns on the investment A change
in the car service situation may heir
matters and help the coal mining com.
pany to get on n reasonably safe basis
But unless better financial results arr
obtained In tho future than in thu
past there is great danger of the note
holders who loaned money to the min
ing company calling for payment OF
the notes, and having the property
sold to meet the same. In which case
OF course. the value OF the gas com.
pany's stock in the mining COMPANY
would be a very poor asset
"Fifth--Thc difficulties under which
the company and later the receivers
have operated are due in Ereal
measure 70 uncomfortable circum
stances, but II the company be nj.
lowed such returns on the investment
as would warrant the spending OF
more money on extensions 10 the prom.
erty, there is no reason why the pres
ent difficulties may not be surmount.
ed and the property put in such con.
dition as win make II fully meet al
the needs OF the community"