Answer. The Mohawk Hudson Power Corporation, $1,300,000, and Question. That is the immediate parent company? Answer. The immediate parent company; and the Niagara Power Co. had advanced $1,200,000, or a total of $2,500,000. Question. What interest did this company pay to those companies? Answer. Six percent per annum. Question. Under current liabilities, what items make that up? Answer. That was an item due to affiliated companies of $71,335 and others $387,959, or a total of $459,384. Question. Do you know how it came about that this company had so many small accounts with various other companies in these groups? Answer. There were advances made by these other companies. Question. Arising out of what? Answer. Operations with companies in various ways; intercompany operations. Question. Say what kind of intercompany operation you mean. Answer. I am afraid I connot answer that question. These are current accounts and are settled monthly. Question. The biggest item here, $42,000-isn't that a company from which it purchases current? Answer. Yes. Question. Well, then, it may arise out of that? Answer. These transactions are all settled currently and monthly; very seldom accumulate. Question. And these happen to be the amounts of the accounts open at December 31, 1931? Answer. Yes. Question. The next item I want to call your attention to is the "other" current liabilities item, amounting to $387,959. What is that made up of? Answer. That is made up of current accounts payable, $153,666; consumers' deposits, $71,131; dividends payable, $110,000; subscriptions to stock purchase fund, $53,162; or a total of $387,959. Question. "Accounts payable" means ordinary open account? Question. "Dividends payable"; does that mean dividends payable on that date or was that defaulted dividends? Answer. The dividend was declared on January 1. Answer. The dividend was declared on January 1 of the following year. May I be permitted to correct that? Question. All right. Answer. My recollection of the transactions in the handling of these accounts is that the company accrues its dividends monthly and this represents the accrual of the dividends on the preferred stocks as at December 31, 1931. Question. Now, the next item is accrued liabilities, made up of what? Answer. Of taxes in the amount of $209,354 and interest in the amount of $130,611, or a total of $339,965 as of December 31, 1931. Question. Reserve accounts; state what that means. Answer. $2,157,258. Question. How was that divided? Answer. And was represented by retirement reserves. Question. All right. Answer. $2,112,503; pensions, $306; extension deposits, electric, $5,480; extension deposits, gas, $4,602; contributions for extensions, electric, $28,633; and contributions for extensions, gas, $5,734. Question. The pension account seems to be very much depleted. Next is the surplus account, amounting to what? Answer. $2,960,371. Question. In your examination did you find out how the surplus was made up in this company? Answer. The surplus of this company was accumulated almost entirely from earnings. Question. That is what I want to know. Let us pass over to chapter 4. You are dealing here with the fixed capital and the retirement reserves, are you? of Answer. Yes, sir. Question. The fixed capital on this date first being the assets side your balance sheet on page 15 was divided how, between electric and gas? Answer. Electric fixed capital, $24,413,715.40. Fixed capital, gas, $9,971,325.53, or a total fixed capital as at December 31, 1931, of $34,385,040.93. Question. And we have found already that at the time of the organization of the company this fixed capital account stood at a little. over $4,000,000? Answer. Yes, sir. Question. At that time it was not divided between gas and electric, was it? Answer. It was not, sir. Question. So that the increase amounted to what in the period from 1902 to 1931, inclusive? Answer. $30,228,429.68. Question. Summarized into what different items? Answer. Property acquisitions, $1,498,045.66; additions and betterments (net) during that period, $28,592,088.42; unfinished construction, $138,295.60; a total of $30,228,429.68 in fixed capital at December 31, 1931, as compared with 1902. Question. And these acquisitions that took place between the date of 1902 and 1931 are those charged on the chart 2-A that you have referred to? Answer. That is correct. Question. As taking place from 1902? Answer. That is correct. Question. Tell me what the tabulations on pages 25 and 26 show. Answer. The tabulations on pages 25 and 26 show the fixed capital charges to the classified accounts as prescribed by the Public Service Commission of the State of New York during the years 1926 to 1931, inclusive, divided between electric and gas. Question. Being the electric on page 25, and page 26 being the gas? Answer. That is correct, sir. Question. All right. Let us examine the electric table for the moment. How much of the fixed capital on the electric side came from organization expenses after the year 1926? Answer. There was charged to organization expenses accumulated as at 1926, $366,734.01. Question. Between that and the end of the year 1932, were there any additions to the organization expenses? Answer. There were. Question. What was the figure? Answer. An increase of $74,066.10, or a total of $440,800.11 at December 31, 1931. Question. At the end of 1931 what stands in the franchises account? Answer. That account was transferred on orders of the public service commission from franchises to miscellaneous, in the amount of $4,333.23. Question. In other words, there is a franchise item in the miscellaneous of the previous year? Answer. That is correct. Question. That made a total of intangible fixed capital at the end of 1931 of what? Answer. $445,133.34 in the electric. Question. I am only talking about the electric. Answer. All right. Question. At the same date, what was the total tangible fixed capital? Answer. $24,301,146.97. Question. Adding the unfinished construction to that? Answer. It made a total of $24,413,715.40. Question. The first item under tangible fixed capital is what? Answer. Land. Question. Standing, at the end of 1931, at what figure? Answer. $2,757,123.24. Question. Do you know what that consisted of? Answer. That consisted of lands which had been acquired by the company, including the consolidation of the companies, and the acquisitions during the period from organization to that date. Question. Were you able to get records to show the cost of these lands at any of the periods when these companies acquired those lands? Answer. There were certain records in existence, but it was difficult to determine the cost of a piece of property or a land acquisition, for the reason that these land acquisitions consisted of many parcels of land, and the net amount that was eventually charged to fixed capital, which is represented by this figure, is after having given consideration to the sales of unusable lands by the company. A major portion of these lands, of course, are in connection with the hydroelectric development. Question. Well, then, how does your answer stand now as to whether you are able to say what the cost of these $2,700,000 of land actually was? Answer. I am not able to state it all, except this, that during 1915 an appraisal was made of the physical assets of the company. Question. Of course, an appraisal would not tell anything about costs. Answer. No, sir. Question. That is all that I am asking you about at this time. Question. Now, this account is supposed to stand as only lands used and usable in utility business? Answer. That is correct, sir. Question. Not lands that have been paid for and found not usable after that. Answer. No, sir. Question. That is in another account? Answer. Yes, sir. Question. All right. Your next tangible fixed capital item is structures. What does that consist of, the main plant? Answer. No, sir. Question. What is that? Answer. That is structures; that is buildings used in the company's business, exclusive of plant. Question. Including this office building? Answer. No, sir; no; that is plant buildings and other buildings of every nature, kind, and character that the company has in use. Question. Where is the office building carried? Answer. That is carried through the Kanata Realty Co., a subsidiary. Question. But does it not come in here? Answer. No, sir. It comes only into this company through its ownership of the entire outstanding capital stock of the Kanata Realty Co. Question. The only thing that comes in here is this company's investment in Kanata? Answer. That is correct, sir. Mr. MACHOLD. It would not be in fixed capital. It appears in the investment account. By Mr. CHANTLAND: Question. That is right. In other words, there is nothing in this fixed capital account, shown on this sheet, having to do with the Kanata property? Answer. Nothing, sir. Question. Well, I have to find out yet what these structures consist of. Answer. They are the structures used by the company in connection with the electric and gas business. Question. I am talking about page 25 now. Answer. Those are the structures used in the electrical part of the business of the company, including buildings, plant buildings, and such other structures as necessary substations and things of that kind, substation buildings. Mr. Chantland. This is off the record. (There was a discussion off the record.) By Mr. CHANTLAND: Question. In other words, any structure; you mean the building shells? Answer. That is correct, sir. Question. Following that, under the head of "Generating plant", both steam and hydro, you have machinery? Answer. And equipment. Question. Now, your steam generating plants aggregated what at this time? Answer. $2,981,737.38. Question. What part of the building structure would be allocatable to this steam? Do you know what part of the $2,900,000? Answer. I am unable to determine. Question. Your hydro generating plant account stood at what? Answer. $2,454,629.12. Question. Now, then, the next title, "Transmission and distribution and substation equipment", was what? Answer. $8,847,497.35. Question. Besides that, in this fixed capital account, they carried a number of other items. Just name them. Answer. In addition to that there was street-lighting equipment, $255,752.97; general equipment, $624,536.84; miscellaneous tangible capital, $54,362.75; making a total of fixed capital, electric, including intangibles, $21,596,890.13. To this there was added $2,259,123.50 in overheads of various kinds. Question. Divided into what items, with the amounts? Answer. Engineering and superintendence, $961,172.23; law expenses during construction, $2,308.12; injuries and damages during construction, $145,820.58; taxes during construction, $55,762.05; interest during construction, $679,645.83; miscellaneous construction expenditures, $414,414.69. Question. Which of these amounts-each of the amounts that you have just now enumerated is discussed later? Answer. Yes, sir; under overhead. Mr. CHANTLAND. This is off the record. (There was a discussion off the record.) By Mr CHANTLAND: Question. Recurring now to the question which I have asked you, do you want to tell me now the approximate amount, how much of the $3,621,250 of structures is allocable to the steam-generating plant? Answer. Yes, sir. Fifty percent of this amount is applicable to the Harbor Point steam plant, which carries a charge for structures of $1,753,045.20. Question. And that is the big steam plant? Answer. That is the main steam-generating plant of the company, located in the city of Utica. Question. Then the other half goes against hydro and other structures to take care of substations and things of that sort? Answer. Oh, yes. Question. Can you tell me what was in Trenton Falls? Answer. In addition to the amount just mentioned as applicable to structures, $486,443.27 can be allocated to the Trenton Falls hydroelectric plant. Question. That is over on the hydro side? Answer. Yes, sir. |