The people's voice. [volume] (Helena, Mont.) 1939-1969, 1944-12-22
Mont. Power
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Goldberg asserted the minutes of
the Montana Power Company will be
searched in vain for any indication
that anyone considered the plan real
purchase and sale. They reveal be-
yond doubt that everyone considered
it as nothing more than a reorgani-
cation and the putting of some tenn
porary financing and undesirable fl
nancing on more permanent basis
Goldberg stated that company coun-
sci asked the Federal Power Commits
sion and the Montana Commission to
ignore the real substance of what was
done in the power company transac-
lions and to look only at the form
of the deals.
Turning to the 1913 transactions,
Mr. Goldberg said that in 1913 Mon
tana Power Company received the sec
ond half of the stock of the Great
Falls Water Power and Townsite Com
pany and all of the stock of Thomp-
son Falls Power Company from Mon
tana Power Company's own president
and largest stakeholder, John d. Ryan.
GAS a result of that transaction,
some $16,000,000 in excess of cost to
Ryan and Butte Electric was placed
in Montanas investment account, and
in 1929 this amount was transferred
to the plant account where it is to-
day."
Goldberg charged that the 1913
transaction was lacking in all the
elements of an arms length transac-
ton" which would be required to
establish a new cost for Montana
Power Company properties. There
were no changes in ownership, no
Independent parties, no diverse inter-
ests, and the fact is that Ryan domi-
mated Butte Electric and Great Falls
Water Power e. Townsite Company
even before the transaction was con-
summated. In addition to being the
largest stakeholder, he was the GUS
toner because of his contracts to
supply power to the mines. He was
a director of the Milwaukee railroad
and as result of his inside track
there, purchased for himself the two
power sites previously mentioned. He
had the power contracts for electrifi-
cation of the railroad
Letters reveal that those who were
negotiating with Ryan had no choice
in the matter 1t was either join him
or be crushed. Coffin Zone of Butte
Electric's stockholders wrote after
the transaction that the amount they
were giving Ryan was far out of line
with any price ever paid for a water
power combined with a public utility. |
The answer to that is that it was
votes, not value, that counted in the |
There was no real change in own
ership. In 1909, you had Butte Elec-
trio holding so per cent of Great Falls |
Power & Townsite and Ryan owning |
30 per cent, at a total cost to both of |
hem of some 100000. In 1913 you
have 81 per cent instead of so per
cent owned by Ryan, and 4S per cent
instead of so per cent owned by Butte
Electric. But the company now claims
hat the cost to these same owners
who continued to hold the stock all
he way through, was at least $780,
100000 in 1913"
Mr.. Goldberg stressed the point that
he Federal Power Commission staff
loes not challenge any of the amounts
lue to ''honest-to-goodness invest
nent" and allowed every penny of
cost incurred"
He reminded the commission that
t was such abuses as those revealed
n this case that resulted in passage
If the Public Utility Act of 1885 and
'esulted in the enactment of parts
wo and three of the Federal Power
Act which embody the congressional
intent not only to correct such abuses
tut to prevent them in the future