The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1926-11-23
FRENZTED FINANCE

ERENZlED FlNANCE
In the race to get decision from the public
service commission before the State Legislature can
give those safeguards which experience has shown
the public needs in the way of amendments TO the
law, the men who are putting the two light COM
panies under a single ownership are showing that
they are skillful students of the art of frenzied
finance.
They brush carelessy aside that provision OF
the law which limits the capitalization of merged
companies to the total of the outstanding capital OF
the units
The petition before the commission itself is the
best evidence that the method proposed OF having
third company buy the two old companies is
trick and a subterfuge to evade this law and load
the people of this community with a burden of many
millions of securities.
They are seeking to issue more than fifty MIL
lions of dollars in bonds and stocks.
They calmly ask the guardians of public interests
to authorize them to sell thrtytwo millions of dol
lars worth Of new>>bonds.
They want permission to sell these bonds at
ninety three cents on the dollar.
There twelve millions OF bonds now~ou
standing against the two companies.
They propose to buy money at SO cents on the
dollar to pay 100 cents the dollar for these bonds
They also ask that the public make those 93-
cent dollars into 100 cent dollars immediately as is
shown by their parade of figures.
In a word the trading of these dollars on the
bonds alone would give these nancers not electrical
experts, nearly million dollars the wage for this
part of the financing alone.
There be no mistake as to the ultimate pur
pose of these men. They expect those ffty-fve mil
lions of bonds and stocks to be worth atleast their
face value.
They expect the public to pay this basis al
though the law says that when companies are merged
and thrown together they shall not be capitalized at
more than the combined capitalization. That is the
trick That is where they take millions of profit at
the start and expect to keep on taking interest for
all time on these fictitious dollars which they are
asking for permission to issue mortgage upon the
growth and welfare Of this city.
AS matter of fact, the immediate profit is nearly
four millions of dollars.
But the big grab, bigger than even this, lies in
the price which is being fixed the value of the
companies. They seeking to take now the ex
pected increase of value for at least decade.
This city is interested in having these companies
thrown together, but not at such a price for such
service.
The whole theory of public regulation Of public
utilities is based upon monopoly.
1t is wasteful to have two sets of lines running
through the streets. 1t is a waste that should be
stopped as the city grows and there is eager
competition for the business.
The people know that they must pay the cost
and the interest on extensions and improvements
That is right and just They should not be compelled
to pay interest and the cost duplicated sets of
wires and duplicated sets of machinery
There should be way of accomplishing this
without paying such extortion to the financiers who
md here pleasant and profitable field of exploita
ton.
If the theory of the law is carried out by the
commission, the companies should be combined at
/ fair price and fair valuation; not prices
md mutations that have come through effort of
any one connected with either concern.
The duplicate materials and machinery should
be discarded and sold and its burden upon the public
amortized as quickly possible
Whenever there is useless duplication it should
be eliminated and that burden lifted
Instead of such program, there is presented an
appeal for new huge burden for trading dollars
mortgage upon the future of the city,
ak upon every resident of this city.
It Is rather pathetic to listen to arguments from
not to give such permits are now asked
Just plain common honesty and decency would
suggest that the commission at once inform these
fnanciers that the law in regard to mergers
not be avoided evaded, that the companies should
at once merge according to law that wastes be elim
mated and that the people receive the benefits from
he monopoly thus created.