The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1921-12-28

trarN has ,benefitod it in that no
advantage has been taken of the
forecloure provisions in said mort
gage on account Of the default in
| payment of interest thereon, which
would have occurred if the Balti-
more Utilities Company had ac-
tually been able to distribute the
same to investors generally.
A deduction is made for net
operating losses over the period
of the company of $12,355.4O. See
page 9. This is undertaken to be
justified on page II, where it SAYS
that lit is possible for losses sus-
tanned during the first few years
Of a public service corporation to
have n value for sale purpose, but
losses should never be considered
as an amount on which to base
rates for earnings" This is in
direct conflict with the decision of
the court vide the Kings County
Light Company case 210 n. Y. page
479 Goa n. f. Rep. 91D; the Den
yer Water Works VS.. Denver. 24G
L. $. IT'S; the Omaha Water Works
2lS u. S. $50, and the State Public
Utility Commission VS.. Springfield
Gas and Electric Company, 125 n.
r.. SJl-90O, Supreme Court of Illi-
nols. These operating losses must
be capitalized for rate making
purposes under the doctrine of the
New York case as representing de-
velopment cost of the business, or
under the supreme court cases as
representing q going concern value.
III hundreds Of rate making cases.
this specific item has been discuss
ed and considered until hardly
anything is left to be said in respect
thereof. In the Denver Water
Works case, although the franchise
had expired, and the city had the
right TO order the Water Works
company to remove it's distribution
system out of the streets OF the citv
the supreme court affirmed over n
million dollars to represent yoinp
value. Under no circumstances.
can the $12,355.40 be questioned
The accountant cannot be criticised
IN respect of his figures, but has
manifestly erred as to what the
law is or in the application there
or. We say and have ALWAYS said
that the minimum investment i'm
the plant is $l56, 900 Add to the
$13S, 714.93 GOund on page 81 the
crrOncOusly eliminated net losses.
$l2,355.40, the actual expenditures
in connection with organization ex-
( A A.
pencitures appearing on the books
OF the company for engineering and
superintendence, S2,47O.27 and YOU
reach the figure $158.532.27.
On page 10, referring to Schedule
:, the accountant states that he
mas examined vouchers in detail
and has included for cash invested
in plant and equipment $133,26l.-
20. From the eliminated items ag-
gregating Sl2l,197.12, he makes
manifest that there We're paid for
actual services rendered $2,47O.27
under the item Engineering and
Superintendence," and in connec-
ITO with "Orgaization" expense $4,-
99l.6I. These two items aggregat-
ing SAG l.94 cannot be eliminated
under any theory Of law for valu-
alton. In the Same way he cannot
eliminate the going concern value
OF $li,'35.lS for the years 1886,
nor the additional losses for the
years l917-1S-19-20 and 2l. The
supreme court of the United States
has repudiated the elimination of
going concern value in every case
Whlch has ever come before il and
such cases have been numerous.
Th' claim at the top of page II
that the S3,99l.67, attorney fees,
etc, should have been charged 10
expense is manifestly unsound.
Those services could not be charged
10 the expense of any one year, be-
cause they they were services rem
dcred in connection with matters
the benefits of which have and will
continue TO inure to the corpora
tlon during its entire life as we'll as
the entire life of the franchise and
any extensions thereof. The Sl4.
1919 we admit is not an invest
ment In plant in the physical sense.
Dut IN the economic sense il is tho
most valuable of any investment in
the plant as Il system. The Sumter
company has approximately 1000
consumers. 1t is safe to say that
the procuring of those customers
represents materially larger
item than is reflected in the going
concern value.
NO one will for moment dis
pute that if we turned over to him
the sumter Gas and Power com
panys plant and distribution svs-
TEN, with the materials and s,,n-
plies for installing services idorti-
cal with those now connected ana
with thousand meters of the tvno
now installed in connection with ito
gas system. but all stored i'm .
warehouse, that the plant could
not command even approXimatolv
the price which it will command nc
a going concern with the customers
solicited, the contracts to take gas
entered upon, the services and mo-
ters installed and the great numbor
or gas consuming appliances sold
deilVered and connected as a
source of gas consumption.
The president the cOmnonv
stated that the fair value of the
/ IN icI