South Bend news-times. (South Bend, Ind.) 1913-1938, 1921-09-01
AIR MERGER PLANS
OF UTILITIES AT
SERVICE HEARING
Would Give Securities as Pay
ment for Seven Electric
Corporations.

INDIANAPOLIS, Aug. 31-Evi-
dence tending to show that the new
Indiana Electric corporation would
acquire seven public utility COM
panies it proposes to combine for
which would be in securities Of the
new corporation, was developed
Wednesday before the close Of tes-
timony at the public service COM
mission hearing on the proposed
merger.
After considerable questioning it
was learned from Charles McPher-
son, counsel for the corporation,
that the approximate proposed pay
ments IN securities for the Merchants
Heat and Light Co., of indianapolis,
would be S11,5OO,OOO; for the Elk
hart Gas and Fuel Co, sS55,OOO, and
for the Valparaiso Lighting Co..
1927, 900.
The common ownership of these
three companies and the new cor
poration by the Joseph H. Brewer
interests was said by Mr. MoPher-
hon, who Is a director in the various
companies, not to require more than
an exchange of stock. The control
Of the Indiana Railway and Light
Co., would cost a total OF $5,163,105,
according to exhibits also produced
by the corporation. This amount
would be part cash and part Sc
curities, and with the stock exchange
value placed on the three brewer
companies. would make a total of
SIT, 100.
Ferret Out Details.
Samuel Ashby, corporation coun-
sci for Indianapolis, developed in
examining Mr.. Mcpherson that the
S11, 500, 900 price on the Merchants
Heat and Light Co., included
s6.5s6, 900 Of bonds and notes that
would be assumed by the new cor
poration, thus reducing the approx
mately 100000, the amount that
would be paid in securities for the
company's properties.
who gets the $1,000, 00O?" Mr.
Mcpherson was asked.
The common stockholders Of the
Merchants Heat and Light Co." he
replied, adding in reply TO other
questions that all the common stock
was held by the Merchants Public
Utilities Co., and the American Pub
lie Utilities Co., of which Mr.. Brewer
is president.
Cash that is to be used in the
transaction for the acquisition OF the
combining companies was said by
Mr.. Mcpherson to be expected to be
obtained from the sale of first re-
funding bonds at about 81, one year
notes selling at 96 or 81 and pre-
fsrred stock Of the new corporation
selling at par.
Issue SIC, sos, 900 In Securities.
Before closing his testimony, Mr..
Mcpherson in reply to Commission
er Barnard said that the corpora
TONS program required the issuance
of s16.665,OOO in securities. and that
no less amount would be sufficient to
carry out the project.
With the closing Of the evidence,
an agreement was made by counsel
in the case 70 complete arguments
Thursday one hour and a half be-
ing allotted TO counsel for the cor
poration and two hours for the cities
and power consumers participating
IN the hearing.
Before aoing into the financial
side OF the project. the hearing
Wednesday conferred IN the testi-
mony OF Harry Garman, chief en-
gineer OF the public service COM
mission, who placed an estimated
value OF s10,2S4,361 on the seven
companies The corporation has
sought 70 establish a value OF ap-
proNmately s19,O00,000. but much
OF the difference between this and
Mr.. Garnan's estimate was appar-
emily due to different theories IN
determining value.