Montana labor news., 1944-03-30

actual bona 1lde real coSti not fictitious
or spurious cost.
This real cost rises only in trans
actions where there is no affiliation OF
community of interest between the
parties who are dealing with one an
other In such circumstances, and only
such circumstances, do the safeguards
exist which warrant a finding that the
contract price is the real price Real
cost cannot arise where the parties are
affiliated and in fact are dealing with
themselves as buyer and seller, whether
it be individual capacity or through cor
porations created for the purpose of con-
fealing the true nature Of the trans
action.
In these affiliated transactions, the
profits are fictitious and unrealized.
They involve nothing more than a trans
fer from the lett pocket to the right
pocket. 1t is through these latter trans
actions, among ohers, that utility plant
accounts have been inflated and it is
the contention of the commissions staff
and commission counsel shall show that
the accounts Of this company have been
inflated through just such transactions
by approximately S50OO0OOO.
1T is further the contention of the
staff that there is included in the COM
pany's plant accounts, approximately six
million dollars Of excess over original
cost representing payments for intan-
gibles which have remained on the books
Of the company without amortization
or depreciation for as much as 30 years.
Commission counsel thinks it signifi-
cant that as Of October 26 l943. the
commission had approved or directed
disposition of write-ups aggregating in
round figures 368 million dollars with
less than one-haf dozen appeals to the
courts. Most Of these half dozen appeals
have been by companies which, like the
Montana Power company, are in the
electric bond and share system. In every
case which has been passed upon by
the courts, the commissions orders have
been fully sustained"
People Interested in
Outcome of Hea ing
The inference to the people Of Butte
and generally to The people Of the state
of Montana is that the Montana Power
has too much excess valuation
of its property and it would appear that
the government is attempting to make
a more clear determination Of values.
Organized labor has long since known
that the Montana Powes company is
illogical in some of its valuations and
notable instance according to labor rep
in the legislature, is that
this company has higher valuation for
rate purposes than it has for tax pur-
poses. Perhaps this has nothing to do
with the present hearing, yet it doesn't
make sense. It has been reported Off
cially to union heads that the preferred
here have received a dun
by the Montana Power company. 1t is
presumed that the company feels that
the stockholders should pay the expenses
Of the present hearing
A notable array Of legal talent is pres
ent at tn ehearing including, besides the
regular staff Of the company, Ed Toomey
Of Helena, Howard Toole Of Missoula,
Arthur Lamey of Billings, ]. B. c. Knight
Of Anaconda, j. A. Poore of Butte and
e. j. Stromnes Of Great Falls and Will
liam Meyers Of Butte All of these attor-
neys are supposed to represent different
or interests. The question
was raised, why hasn't organized labor or
-he Silver Bow Trades & Aabor Council
oeen asked to be allowed 20 intervene
N behalf of the people?