Indiana daily times. [volume] (Indianapolis [Ind.]) 1914-1922, 1921-08-26

A-0AAAhuc0 AoAAA a ~eN N-N-t
sale Of the Merchants property without
"a complete valuation.
These s-atemants were followed by .
detailed statement Of the taxable valua-
lions Of the utilities involved. Including
real estate, which total only S12.11096s
In a statement to the commission. Mr.
Ashby said he would not oppose any
thing which would tend 10 increase quail
ity Of service or decrease costs. but he
did object 20 the authorization OF secur-
titles IN excess Of the actual value Of the
properties. lie declared valuations for
taxation and for rate making purposes
should be identical In conclusion he said
the commission has no power 10
authorize the issuance Of securities in eN-
cess Of property valuation
Fred Bates Johnson, former member
Of the public service commission. repre-
sentfng the city of Kokomo. objected on
the same grounds. declaring there Is no
way for the commission TO escape making
a detailed valuation He declared on
the face Of the cemPany's own uEuFes
the proposed capitalization Is S204010
in excess of valuation.
Mr. Johnson read from 10 morandum
in which he detailed the law on the sub
3ect and presented valuation 1gures I'm
detail. His data showed the company is
valuing the property 81 the utilities in
volved at total OF S19I1l.ot that the
reconstruction new valuations estimated
by the commission is S11.+s+.=+2; that the
present value Of she property as Fixed Toy
the commission is Sat5tJl and that ihf
tax boards valuation exclusive of real es-
tate is S11.1l25S1
Following Mr. Jackson. NIr. Ashby made
a brief statement ohieeti1E To lump val
nations on Iha ground they would com
plicate rats questions.
William T. Wider. representing the city
Of Elkhart, asked about valuations of th"
EIkha-t property and voiced objections
similar To those Of AIr- Johnson and Mr.
Ashby.
William L. TAYLOR. represent" I'M
diananoMs power users. expressed the
fear that capitalization VIII have some
bearing on rates. despite the require
ments u the law and rhe attitude of the
public service commission
MONEY NEEDED
APPRONINATELV sIs.O0O00O.
AT this point Charles Mcpherson. an-
other attorney for the corporation, made
It plain the company is asking that rates
be not involved I'm tine commissions or
der and declared the amount of proposed
securities IS not iu conflict with the law
He pointed out the securities probably
would not sell at par and the actual
amount of money probably would be far
below the paper capitalization. He said
the proceeds Of securities should be 10
per cent to Il per cent above the prop
erty value and the actual amount Of
money needed Is between S1S,OO0.09O and
$40 1000, 600. He said the corporations
contention IS that securities reasonably
necessary may be legally Issued and Il
believes the proposed securities are rea-
sOnably necessary.
The first witness for the corporation
was William J. Hagenah. Chicago, util-
itv expert. He testified he made an in
ventory Of the property of the Merchants
Heat and Light Company in 1917 and
this inventory on the basis of the aver
age price Of materials between 1914 and
1920 shows a valuation OF Sll. +sOOuO
This valuation, he testified, is exclusive
of working capital and intangible values.
but does contain Il per cent overhead
construction estimates and that nothing
has been deducted for depreciation. MI
Mcpherson explained II is the company's
theory that going value Offsets depre-
citation.
EXPERT VALUES
MERCER COMPANIES.
On the basis OF natural trend
prices. he said the property OF the Elk
hart company. using the same theory as
USED IN tue tdSt Vi tAN t'A--N--'--N@ 80
pany. is So59.3S5. He said. using the
1914 to 1870 average prices the property
would be worth SS06.SSO. on the same
basis he said the Valparaiso property Is
worth s2s3. 21T. or S315 S64. according to
the prices used for calculation.
on. cross examination. Mr.. Haganah
said additions to the Merchants company
s1ncs 1917 amount TO 81 10000. making
the present valuation on the basis Of his
calculation SD $4,000. In answer to n
question by Mr. johnson. lie said 1t
would have cost only ST.GT9, 43I TO repro
duce the property on a basis of the aver
age cost Of materials for the three years
preceding 1917. He said the actual re-
production value today would be 10 per
cent higher. or sS44T3S0. The property
is listed by the corporation in its petit
sfoD "a worth 81 10000