The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-01-12

today in reports of the comps
mission and other evidence he
This disclosure was made
in the investigation by Sher-
man Minton, public coun-
selor, and The Times, pre-
paratory to the hearing of
the commission order to show
cause why electric rates
should not be reduced. The
hearing will begin Feb. II.
In it's annual reoprt to the public
service commission as of Dec. 81,
1890. the Indianapolis Power and
Light showed the value of its CAPT.
tai stock and surplus as $4,000, 401 "a.
Yet the utilities Power and Light
Corporation, holding company of the
local light company, in its annual
report to it's investors covering the
corporations combined report, shows
on page 30, as of Dec. 81, 1880, that
the value of the capital stock
and surplus as of that date was
$19.141 ,62081
An alleged "write-up," according
to utility experts, of $17,000,000 is
shown there from the light COM
panys own report to the public
service commission.
Experts Give Opinion
According to utility experts, the
only conceivable object for such an
alleged "write-up' was to improve
the appearance of the Utility Power
and Light Company'S consolidated
balance sheet which in turn would
have a decided effect in influencing
buyers of any securities which might
be offered by the holding company,
and, at the same time, apparently
increase the value of securities al
ready outstanding.
In a later installment, The Times
will explain this alleged ''write-up"
in more detail.
Shortly after the Indianapolis
Power and Light Company filed its
1881 annual report with the public
service commission. a $2,500,00O issue
Of 6 per cent preferred stock was
put on sale. The Times learned that
subsequently, most of this stock was
sold "over the counter
Sold at 100 Par
This stock, The Times learned,
was sold at 100 par and was bought
up mostly by small indianapolis in
vestorS This issue of stock now is
being sold on the local market at
about 40, it is known.
Another issue of 612 per cent pre-
ferred stock. put on the market not
long after the merger, was under
written by bankers and is on sale
today in indianapolis for not more
than A
In 1882, when the per cent
stock first was offered for sale at
500 share the 6la per cent pre-
ferred stock was being sold at 80
and less. The Times learned.
The common stock of the In
dianapolis Power and Light Com
pany. according to utility experts.
is held in entirety by the Utilities
Power and Light Corporation of
Chicago, the holding company.
Yet according to an analysis now
in Mr.. Mintons possession, the
holding company has no money in
vested in the local utility.
Under order No. 8767 of the pub
lie service commission approved
Jan. 10, 1927, the indianapolis Pow
er and Light Company was author
lied to issue S3S0000 900 worth of
first mortgage gold bonds Series A,
payable Jan. l, 1857 and bearing
interest at per cent.
Eight million dollars worth of this
bond issue was to be held by trus-
tees for extensions to properties,
etc, The Times learned
The S30000,000 issue of bonds,
The Times learned, Immediately
was floated against an appraised
value of all the physical assets of
he Indianapolis Power and Light
Company amounting to $35.6l5,1 21.
Find No Evidence
WIFI Tic d4Ol6llItl4NlOll6Q S1Z,UOU.-
600 issue of 81 per cent preferred
stock. the total value Of bonds and
preferred stock Immediately after
the merger amounted to $4,000 900
or 1179 per cent of the appraised
physical property. according to in
formation in possession of the COM
mission.
At the end of 1882, it was asserted,
$52250 900 worth of bonds and pre-
ferred stock was outstanding
against physical property value of
the Indianapolis Power and Light
Company alleged not to exceed
S35 0O0, 900.
This method of financing does
not, or should not affect the con-
sumner. utility experts pointed out,
but it does raise the question of how
much cash the common stock
holders. the Utilities Power and
Light Corporation. have invested in
the local light company.
Although there is evidence that
100000 shares of common stock,
valued at Sl060.OO0, were issued,
there is no evidence in the reports
to the public service comm ssion
that this stock We no -c-. G. any
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