White Pine news. [volume] (East Ely, Nev.) 1920-1923, 1923-07-29

peak load was on.
The former power rate had beer
13 cents and the maximum light rate
20 cents, a reduction being made OF
2 IL cents fiat in each case. Mr.
Shaughnessy advised Mr.. Smith thai
the reduction in that manne was
practically % per cen for power and
only about IL 1-2 per cent for lights,
asking if a better equalization were
not possible.
The II Lucent present light rate
was only a maximum ard users OF
larger amounts were given reduc-
tons, Mr.. Smith explained.
Mr.. Smith held that the present
value of the plant was 100000; that
owing to his policy of constant re-
placements and maintenance it had
enhanced in value and that the com
pany was entitled to increased earn
lngs commensurate with the larger
Investment. One item of enlarge
ment had amounted to $1,000,
which had been taken from the earn
ings.
But the commission had previous
ly fixed the valuation at $4,000 and
had authorized earnings of ~ per
cent thereon, allowing a depreciation
chargeoff of SIS per cent. This had
been charged Oft for ten years. Mr..
Shaughnessy understood this should
have been a depreciation reserve and
the amount used Cor requirements
and renewals instead of using it to
swell the operating costs by charg-
ing than to the operating account.
You are unduly increasing your
operating costs" said Mr.. Shaugb-
messy.
Mr.. Zurich then asked Mr.. Smith
if this depreciation account were not
ia mere fiction. Mr.. Smith Objected
to the word fiction but said the plant
undoubtedly was better than ever.
Mr. Smith said the Stone & Web
ster accounting system had been en-
ployed, to which Mr.. ZURICH respond
ed hat it was a Juggling system.
Under cross-eXamination by Mr.
Belford the contract for power be-
tween the Nevada Consolidated and
the Ely Light and Power companies
was admitted in evidence. 1t could
be terminated by either party on
ninety days notice. Mr.. Smith show
ed that the present peak load is 13J
kilowatts and his outfit a capable
of delivering ESQ. The production
of lights for McGill residents was in
"a &; -, fa1 49, - Ia "
a surplus from the reverberatory fur
naces. The light company pays taxes
on 100000 and has paid only one
dividend of 50 a share, the amount
being $4,000, The company had been
authorized by the commission to carr
$676.7S a month, and not taking
note of the depreciation it was earn
ing only SASH, and deducting the
depreciation it was earning but $1SS
The costs of production of power had
been variable. For the whole ten
years it had averaged .O6C49
Mr.. Bedford asked that the record
show that the company was willing
to increase the city of Ely light rate
from s 1-3 cents, whereby there
would be no discrimination.
Mr.. ~Shaughnessy here had an ex-
tended colloquy with Mr.. Bedford, in
sisting that the company's attitude
in not carrying a depreciation re-
serve was nnsourd and untenable.
"It makes no difference said Mr.
Bedford.
1T makes Just this difference" re-
piled Mr.. Shaughnessy. You are
setting up in your theory that the
company is earning but 3.4S per
cent on $4,000. when in fact it is
earning So per cent. You've got to
figure that depreciation account as
you are carrying il as net income
and you cant get away from it
Mr.. Shaughpessy insisted that the
company on it's own exhibits was
making a profit today of ~SS,590.32
annually. and the yearly rate of de-
probation of s3,116.40 was a dupli-
cation. He said the amount charged
Oft was $32.7IS, and there was moth
ing 10 show how much in tho form
of maintenance and requirements
had been charged TO operation.
Considerable time was devoted by
Mr.. Bedford to eliciting from the VII
ness the fact that depreciation in
unseen ways was going on all the
time.
Replying to Mr.. ZURICH, Mr.. Smith
said the company had paid out $23,-
900 from the earnings on debts that
were contracted prior to his owner
ship. some of it on the purchase of
the property. The company during
the next two months was going to
install a turbine costing $4,000 and
other equipment tctalirg $4,000 to
improve the plant.
Edwin A. Rogers, superintendent
of the power plant Of the Nevada
Consolidated at McGill, testified that
lfbo limo lncs wac dino orinpipa11y tn