The people's voice. [volume] (Helena, Mont.) 1939-1969, 1945-03-02

| Continued from Page One)
formerly controlled Butte Electric t.
ascertain the correct investmen
therein"
The commission found that the
write-ups resulting from the 1913 ex
changes totalled s23,636,172.SO.
In summarizing the transactions
with Ryan the commission said: I'll
brief, between 1908 and 1913 Ryar
and his associates had purchased Ger
tain power sites on the Missouri an6
Clarks Fork rivers, for which they
had paid $2,467, 1886. BY 1913, hold
ing long term contracts with Anal
gamated Copper subsidiaries of which
he was head and the Milwaukee rail
road, of which he was director, this in
vestment was transformed into So,
100000 per value of preferred stock
and $26,500,000 par value of common
stock of Montana Power. In addi
ton Ryan had received from Montana
Powers predecessor $150,000 in cash
and $1,350,000 in bonds. He had a
majority tsock control of the company
and was its president. His actual in
vestments totalling less than $780,
600 were reflected on the company's
books at $33,000,000"
Cost of Lands Is Issue
The company claimed a substantial
part of the write-ups represented cost
of power sites on the Missouri and
other rivers in Montana. AS to the
original cost of other items of prop
erty there was substantial agreement
between the company and the COM
missions staff. The company con-
tended its land and land rights on
at 39,266,245 whereas the commission
found the proper amount to be S.
092,273. The commission declared the
position of Montana in seeking to cap
'italize on its books the prospective
earnings of power sites is in direct
conflict with the federal policy applica-
BILE to water power developments
That policy as expressed in the fed
eral power act is that investment
shall not include goodwill. going value
or prospective revenues.
Initiation Recognized by Company
The commission opinion declares
1.-THE record shows that for many
years the officers of the company
have recognized the existence of the
approximately equal to the
found by the commissions
staff and that they have given con-
5ideration to writing 1t off"
The company is plant valuation
statement as of December 81, 1914
showed Intangible plant" at $51,2S4,-
,41 out of total plant valuation of
ISL, 223,018. OF the intangible total,
;47, 190,S63 was classified as water
lights, contracts, franchises, etc"
A 1913 appraisal of the company's |
properties by William J. Hagenah dis
closed a difference of approximately |
S47 100000 between the appraisal fig
Tres and the amount shown on the
books.
Letters written by company officials
old of the embarrassment the write
Fps had caused them in connection
With refunding of bonds.
Mr. f. M. Bird, now president of
Montana Power, wrote as vice presi-
lent in 1886: I'VE had our final round
With the underwriters this afternoon
There was one rather serious
itch, the old Banquos ghost =. This
discussion came up after a review of
he write-ups on Great Falls Power
Company OF course there is only
me way to fix it, that is, write it
Iown and write the capital down"
The opinion says that when, in the
instant proceeding Mr.. Bird was
lsked about this letter, he said he
vas talking about intangibles con-
erning which insurance companies,
Investment concerns and banks had
or years sought explanations from !
he company"
In 1929 in hearing before the Fed ;
raj Power Commission, Montana :,
over stated that although its books ,
effected an amount of $100,000,00 it
armed on an investment equal to only
as, 100000.
Excess of Cost over Original Cost t
The commission found that Mon s
ana Power, or its predecessors, over I
long period of time had, in arms
sngth transactions, acquired going
oncerns at a cost in excess of the I