Evening star., 1938-05-18

take 9ove0GA&e OF the eAteuOeo tsAAs
and postponed . meeting scheduled
for late today until lis eastern
standard time) tomorrow afternoon.
More Advantageous Offer.
Well informed quarters said that
while the offer was more advantageous
than . prior one the company had
accepted several years ago. discussion
centered about two factors-the credit
of the City Of Knoxville and possible
action Of the Supreme Court next fall
which might place the utility in q
slightly more favorable position to
bargain.
The present offer amounted to
$7,500,O00 and would not include q
traction company or long-distance
transmission line In the deal
Knoxville city of1cials informed the
company last week that private inter-
ests would make bid for the traction
line.
American Gas q Electric Co., .
non-controlled afhliate Of Electric
Bond q Share Co., which latter owns
n per cent Of National Power b Light
common, will take over from z. B. q
s. the transmission line, running from
Waterville, on the Tennessee-North
Carolina line, to Kingsport, Tenn,
connecting with the Appalachian Elec-
tric Power Co. The reported agreed
price was $l,2o2, 900.
To Sell Revenue Bonds.
National Power & Light directors
were informed the City Of Knoxville
planned to pay for its portion Of the
purchase price by revenue bonds,
based upon revenue the city would
receive from sale Of power, and these
bonds would be purchased for cash.
by the T. v. A., out Of . So, ZOO, 900
fund available for that purpose. The
company, it was understood, would
be paid in cash.
r. v. A. would purchase from
Knoxville, for cash. all parts Of the
existing system outside the city
proper and would contract to supply
power.
The current offer IL about 81 500, 900
higher for the company than an ofier
to which It assented by contract in
the summer of 1884, but subsequently,
was blocked BY stockholders litigation.
However, company omctals said
here, since then the company has
spent about $1,000. 900 on improve
ments, 70 that the net increase to the
company amounts TO about $500. 900.
National Power q Light owns a, ,342
out Of $4,000 shares Of Tennessee
Public Service preferred stock.
Stock values Reckpned.
Company sources today estimated
acceptance Of the current o1fer would
make the preferred stock Of the COM
pany have an approximate value Of
Ss5 to SO, whereas under the 1894
contract agreed to by the company
the preferred stock would have had
. value after the transaction OF ap-
proximately $40 . share.
On April / Of this year the COM
pany paid Oh . principal amount OF
$3.50, 900 bonds Of the Underlying
Traction Co.
Tennessee Public Service was Or
sanised by National Power q Light in
1925, taking over the older Knoxville
Power & Light Co.
Chief points Of difference in the
negotiations have been:
The company wanted valuation on
the basis of q going concern. It was
not granted.
The company wanted valuation on
the cost Of building up the business
rather than replacement value. This
was not granted.
CThe city claimed 1t could replace
the properties entirely ut q cost Of
between five and six millions)
Probable Review Indicated.
The Supreme Court in Washington
Monday noted probable jurisdiction"
in the appeal Of 10 utilities from .
lower court, indicating probable review
next fan Of the entire question of the
constitutionality Of the T. v A. pro-
gram. The utilities said in . recent
petition for review that the T. v. A.
has promulgated and prescribed elec-
trio rates which are non-compensatory,
confiscatory and Discriminatory" and
alleged the T. v. A. seeks to acquire
control Of the electric power business
in the area it serves.
It was reported in financial circles
that National Power a Light directors
had discussed ct their nrst meeting
the possibility Of postponing . decision
on the Knoxville offer until after any
decision the Supreme Court might
render next fall or winter On the
other hand, 1t was pointed out, such
further delay and possibly adverse
decision would risk almost complete
wiping out Of the value Of the COM