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Show 20, i. UTAH VALLEY NEWS enatorial Investigation of Itah Power & Light Company )emanded by Municipalities mmunities Owning or Content-totin- g Erection of Power Plants Form Protective Organization At Murray Meeting Determined to free Utah municipalities from methods tactics of Utah Power A Light Company that were ribed as pernicious" and utterly intolerable", public from several cities petitioned Senator Elbert D. for an immediate Federal investigation. Thid action was taken at a special meeting at Murray week of representatives of communities that own, or t to construct, municipal power plants. Officials from er cities, who were unable to attend the meeting, exapproval of the request for Federal intervention. A copy of the petition follows: dais imas tJ5 eason Elbert D. Thomas, tyl nber Senate Civil Liberties ate Office Building, hington, D. C. rsibltl n Committee, n, i Safeguards of government and law are employed to the very objects of those safeguards. itizen committees, organized by, and undoubtedly in the of, and under the leadership of the Power Company the guise of legitimate citizen movements to spread d and malicious reports. Civic organizations are thwart-th- e into tricked and are Power the by Company wishes of the people. Direct and indirect control newspapers and of news policies by the Power Company, its own interest, nas become so effective that uncolored irsions of many civic problems fail to reach the people. 'eat So-call- ed in-e- Suits are instigated against Individuals and public as a means of crushing them and destroying their fectiveness as public servants. It has become obvious tat all persons who resist Power Company domination are of-cia- to attack. I - g. re-ass- ert We believe that Congress should take cognizance of the lituation and take steps to end the threat to orderly and pnfettered citizenship in Utah. (signed) Mark Anderson, Mayor, Provo City. G. R. Berger, Mayor, Murray. John N. Whimpey, Mayor, Lehi. J. C. Stocks, Mayor, Bountiful. J. C. Brown, City Engineer, Ogden. ANOTHER MEET CALLED FOR OCT. 27 Following the adoption of the petition the meeting instructed City Commissioner Clifford Hansen of Murray Jto invite intermountain communities to send official representatives to a meeting at Murray on October 27th for the purpose of effecting a permanent organization of those cities that now have or contemplate erection of municipal power pany. negligible role in the power trust hookup. From the outset all four companies have been under the effective control and supervision of Electric Bond A Share, and, of course, have paid innumerable fees for such supervision to the parent concern. It is impossible here to follow the intricate merger anil financing transactions step by step. To do so would require infinite statistical study and compilations. And since, for the most part, the transactions followed the same pattern, and all appeared to have but one purpose, namely, to add to the revenues of Electric Bond A Share Company, we cite only a few examples of the numerous and fully authenticated transactions, and we quote excerpts from the report of the Federal Trade Commission. That report was filed with the Secretary of the United States Senate on July 15, 1932, and is known as Senate Document No. 92, part 45. The report covers the period from organization of the concerns under discussion to December 31, 1930. However, scrutiny has been directed toward certain policies and tactics of Utah Power A Light Company that appear to le inimical to the public interest. The results of such study and observations will be presented. FEDERAL TRADE COMMISSION REPORT DISCLOSES UTAH POWER INFLATION Records unearthed by the Federal Trade Commission are replete with outlines of transactions whereby Utah Power A Light Company paid, directly or indirectly, to Electric Bond A Share Company, or an affiliate, a commission, a fee, or other consideration, for more or leas fic-titious services in financing, construction, organization, and to a degree, even in engineering. Probably the most flagrant of such transactions is discussed in the Federal Trade Commission summary relating to financing Utah Power A Light Company. We quote irom the summary: Those features are not included in the Government report. State and Federal sources give little or no information as to the intrinsic or replacement value of the properties merged into Utah Power A Light Company during the merger period. Nor does the company itself volunteer to the public any material information. Probably the most candid and frank admission ever made by the power company as to the value of its physical assets, is contained in its report to stockholders for the year 1938. We quote from that report: In December, 1912, properties costing Utah Securities Corporation $6,480,708.82 in cadi, 1. e. $6,460,000 at receivership sale on November 18, 1912, plus subsequent interest adjustments of $20,808.32 were written on the books of the Utah Power A Light Company on December 6, 1912, at $22,100,000, or an excess amount over cash cost to Utah Securities Corporation, of $15,619,291.68. In its early treatment of local plant owners the power group adopted the grand manner. Instead of giving little for much, it gave much for little. It was wholly orthodox Subsequent acquisitions of properties from in its public relations and helped to create, and naturally or through Utah Securities Corporation, including observed strictly, the customs and usages of that day. Its both properties acquired by purchase and propersponsors, spokesmen, and legal staff 'vociferously upheld ties constructed by affiliated interests, were the theory at least in public that only the public welfare POWER COMPANYS CAPITALIZATION charged to fixed capital account of Utah Power A Light Company at amounts totaling $9,610r CONTAINS HEAVY WATER CONTENT mattered; that the program of the group invariably coin828.49 more than their cost to Utah Securities Corcided with righteous public policy. poration. Thus the total Inflation in the fixed The ledger value of plant, property, and Guileless westerners who observed its progress and capital account-o- f Utah Power A Light Company does not purequipment, (including intangibles) accepted its pretensions came away with the deep assurover cash cost of the properties to the Securities port to represent present realizable values or reance that here they beheld the perfect fruit of industrial, was $25,230,120117. Corporation cost. placement financial, and even Christian democracy. Not all assets acquired by Utah Power A As a matter of fact the disparity between the actual It made its predecessors in ownership happy with Company at prices in excess of their cash Light compensation for more or less antiquated cost of the companys physical plant and the ledger value cost to affiliated interests were of such nature as local power plants. It added materially to the chest exit has carried on its hooka is enormous. Indeed, it is doubtto be chargeable to fixed capital account Consepansion and hat sizes of local big shots, who were accorded ful if the actual physical worth, of the concern equals the quently not all of the inflation in its accounts was included in the $25,230,120.17 of inflation in fixed daces on its boards. It put life and vigor into civic affairs bond and preferred stock debt against it. For that reason capital. The total amount of inflation established its and was and iued a deft hand in building up service clubs. It the company cannot, without losing face, confessing ia $34,330,246.00 accurate statement make men an and g its best manipulations, highly conspicious for its benevolence, were assigned to lead organized charity drives. of the relationship of physical assets to capitalization As of December SI, 1930, this total inflation career of $34,330,246. was equal to all of the book value essential to became of a Its nod of approval that is unless Electric Bond A Share permits, or the of common stock outstanding amounting to We wonder successful public service. It was zealously courted by Government compels complete dehydration. (all of which waa owned by Electric aspiring politicians. Editors looked upon it benignly and just how much of intangible values" in its capitalization A Light Corporation) and to $4,830,246, Power account is set up as a capitalization of its rather efficient quoted freely from its publicity releases. Educators or 16.8 per cent of the total book value of preferred economic vied with and theories political control, which, in the final analysis might be usestock outstanding. In previous years when the espoused its exploitive Civic leaders ful for rate making, and is undoubtedly very useful othereach other in accepting its employment total of preferred stock outstanding waa less, the percentage thereof represented by inflation was joined bankers and industrialists to give its arrival in Utah wise. correspondingly greater." a hearty handshake, It is generally understood in Utah that during the How did all this come about? What magic did Electric merger period local utility owners, for the most part, were It will be seen from the foregoing that after the Utah Bond A Share possess that its offspring should thus lead treated handsomely" in the consolidations. At that time Power A Light Company had been in operation approxithe parade of the elect with such wholehearted acclaim? the word consolidation" seemed to carry with it the exall of its common stock and mors Could it have been the new experience in Utah of intimate pectation of vastly increased earnings, and the farmer mately eighteen years, cent than sixteen per (16.8 per cent) of its preferred stock association with the fabulous wealth of the power trust? owners felt that under the circumstance they were entitled less more or impure water, or hot air, which We confess that some of the reasons remain obscure. But to share in the golden harvest of immense profits that represented vehicle with which to extract used as the been had turn seemed so certain, and that did follow. Electric lighting in Here ia the story. let the reader judge. consumers. What intermountain from dollars of millions and power were then at the threshold of an era of tremenas of situation actual the is today? It took a Federal dous expansion and the small fry, the local pioneers of UTAH POWER & LIGHT ORGANIZED BY unearth the facts and present to Government investigation ELECTRIC BOND & SHARE COMPANY the industry, were taken into the merger camp on terms nine conditions Obviously another true ago. years were highly attractive to them and for amounts the last nine years Utah Power A Light Company was organized and in- that the made be should covering investigation usually much in excess of the original investment. By such should include closest scrutiny of corporated under the laws of the State of Maine on Septemthat and investigation generous treatment the merger syndicate obtained with ber 6, 1912, by Electric Bond A Share Company, 71 Broadcivic activities of the Utah Power A Light each acquisition of plant, an enduring ally. Accordingly, the political and That of a member as syndicate. managing i way, New York, . Company. we may take for granted that no small amount of water syndicate was comprised of associated bond and stock had Government investigation the As indicated before, already filtered into the utilities when their acquisition manipulators, and heavyweights in the expanding power from of organizadate covered the period of eighteen years by an Electric Bond A Share affiliate became an accomto industry. The company began to function as a going conand A Power including tion of the Utah Light Company plished fact. cern on December 6, 1912. have we date 1930. that only From fragmentary, Its generosity cost Electric Bond A Share nothing. the year During the latter part of 1912 and early in 1913, somewhat unreliable information and inconclusive, local out have a When a it it acquired passed may plant Electric Bond A Share, in the same capacity, organized activities of to judge the actual, three other companies, namely, Utah Power Co.. Utah pint or two of water golden water to the seller aa a Utah Power A Light Company and its affiliates. The. Securities Corporation, and Western Colorado Power gesture of munificent good will. But immediately thereown reports ta after it set up a system that took from electric consumers, companys general run of publicity and its Company. All of the above companies were organized for that they efforts so stockholders are propaganda clearly the express purpose of merging various electric- utilities in not only the dribble of golden liquid so magnanimously lack any basis at all for factual studies. i the intermountain region, and to facilitate the launching bestowed, but in addition whole rivers of financial water we the If by past. only Consequently affiliates. and may itself for judge A as a Light Company and operation of the Utah Power Thus, on September 25, 1912, Electric Bond A Share, Electric Bond A Share succeeded in loading its local subcollector of revenue in. Utah, Idaho, Wyoming, and Colorado million dollars of water with more than thirty-fofor members of the syndicate, principally Electric Bond A as syndicate manager, received for the account of the sidiary in the first eighteen years, what may we expect in the syndicate $8,498,200 in aggregate par value of the securiShare and its affiliates. t nine years? last or eight Utah Securities Corporation, which subsequently was ties of Utah Power Co., in consideration for properties should be added it However, that regulatory bodies it $2,975,091.85, or an excess of $5,523,108.35. reorganized as Electric Power A Light Corporation, ap- costing at from their torpor and to awake have, long last, began in Ultimately that excess was charged against Utah Power A peared to have but few functions, and but one object to frown on indirect and with the expectation, victimizing of conlife. It served as the owner of $30,000,000 of common Light Companys fixed capitalization, sumers electrical of increase That in efficiency in to would have power. pay for it, or stock of Utah Power A Light Company, all of which stock that consumers of electricity hss tended to restrict to public the exuberance supervision for current would would rates have that pay rather, represented inflation, or just plain water. On that watered sustain financial of the in the and modern a playboys excess illustration industry the bring them capital charge stock it collected approximately seven million dollars in and their banker associates appreciably nearer to earth. into water or gold. of and transmuting commissions turning collected other also It cash dividends. Therefore we may feel confident that the industry is apAgain, from 1917 to 1925, Utah Power A Light Comdiscounts of large proportions from Utah Power A Light proaching a more rational basis in the matter of rates and a $831,-2Securities of Utah total to Corporation pany paid Company. structure. Nevertheless the water and fee system capital for for a commissions in A 89,200 finding" purchaser About the only discernible service Electric Power still is and parcel of Utah Power A Light Companys A part stock. Power Utah shares of Light Companys preferred Light Corporation rendered to anyone, aside from provid- The and, sa long as it remains, will continue to background in instance Electric found" was every purchaser ing an additional avenue for collecting extra financing unwholesome condition for Utah and interan present of which owned A Bond Share course, company, Company, charges for Electric Bond A Share, was to introduce, both of the others. mountain consumers. Electric to periodically, the Utah Power A Light Company The Utah Power A Light Company is justly famous Bond A Share Company in order that the former might UTAH POWER & LIGHT DRAINED BY number of qualities, including a canny habit of knowa for A Light obtain loans from the latter, with Electric Power ATROCIOUS FEES AND DIVIDENDS or ing how and where to hustle money. It is known to possess Corporation sitting in between to obtain a commission unusual portion of worldly" wisdom. Its legal staff discount on each loan, the ultimate benefits of which would an The people of this Btate might not have been affected and its personnel are distinguished and have marked talent. A accrue to Electric Bond Share. to any appreciable extent, by the heavy water Therefore Utahns acquainted with that background of adversely, Utah Power Co., in the final consolidation, was owned content in Utah Power A Light Company stock, had it not the company will be astonished to learn of its comparative been for dividends by Utah Power A Light Company. Its function appears paid on that stock dividends collected cominnocence, unsophistication, and inability to know its way from the another still corporate to have been that of providing of this region through excessive rates. people will not know what to make of a situation mission taker through which Electric Bond A Share might around. They to December Up 31, 1930, according to the Federal company finds it necessary to call in Trade Commission further exploit the organizational phases of the mergers. wherein the power introduce report, the Utah Power A Light Comit to its very own corporate With Electric Power A Light Corporation (nee Utah Secur- another concern to Electric to Power A Light Corporation as divipany paid needs a little ready money, particularly ities Corporation) it furnished a screen behind which grandaddy when it on common stock a total of $6,150,000. Additional dends exercises such efficient supervision Electric Bond A Share might pump additional water into when that grandsire dividends were reported to have been paid in cash to the consolidations and collect additional tolls as it pumped. over its pet grandchild. Electric Power A Light Corporation on common stock in That situation moves us to suggest that next time 1931 and Western Colorado Power Company was, in turn, owned by 1932, so that we may fairly assume that Utah Utah Power A Light Company has occasion to borrow Utah Power A Light Company, and, so far as Utah conof introduction from PSCU (Continued on next page) sumers are concerned, has always played a more or less money that it procure a letter us stock-jobbin- $30,-000,0- 00 I The Company spends large sums of money to. influence gislators and voters to the extent that it almost amounts In short, the menace to representative 'eminent has become so great and so utterly intolerable, t we petition you to send your committee investigators ito Utah forthwith, to supremacy of constituted eminent, and to bring to the people accurate and immediate information now unavailable. vote-buyin- M- ls million Dollar Racket Thirtq-Fo- ur Not the least amazing of the notorious transactions originating at 71 Broadway, New York City, in the good old days" before SEC put on the brakes, was the organization of the group of corporations in 1912 that brought forth, in dubious fashion, the Utah Power A Light Com-- " ultra-genero- Pernicious activities of Utah Power & Light Company to break down local self government in communi-- i of the intermountain region, has reached a point where (may no longer hq tolerated. Cities of Utah are beset and harassed with intermin-litigatiocalculated to destroy the morale of the ople should they, perchance, refuse to continue under Company domination. Innumerable initiative and jferendum elections are sought, not to ascertain the will the voters, but to delay, confuse, enmesh, and thwart will of the electorate. ibject Qlic Friday, October 20, 1989 to Electric Bond A Share Company, avoiding the old intermediary, Electric Power A Light Corporation. A little money might be saved, which could (? ? ?) be passed on to consumers, or, as an alternative suggestion, possibly a bettei; one, it might use the savings thus effected to take a healthy swat at radicals" and wicked advocates of public ownership, or critics of private exploitation. plants. expected that at this meeting a thorough organization of al! cities engaged in the fight being waged upon them by Utah Power A Light Company, will be effected. Other advantages of close cooperation of the cities in operating electric plants will likely be discussed, according to reports from the Murray meeting. It is booklet written, t.'WTOR'H XOTK The following la ho text of City. It PubllNhHl and dlNtrlbnted bjr F. Jen Hen of Salt k late contalne aperlfic information as to the political operations of the I'tah Power A light Company in this state. Wo hold no rex pon nihility for the statements and allegations wale by Sir. Jensen. Our only reason for reprinting the booklet Is that the people of Proro City may be Informed regarding those atatements and allegations. If theae things are trne then surely the people of thin city should be aware of them before November I. If they are untrue the Itah Power A light company should immediately refute them. by-whic-h behind-the-scen- es - . ur stock-jobbi- 00 ng |