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EXHIBIT No. 10.-Reduction in residence rates OLD RATES (AS OF DATE ACQUIRED BY AMERICAN GAS & ELECTRIC SYSTEM) Wildwood, N. J. (population, 5,330), | Scranton, Pa. (population, 143,433), 1925;

1907: 20 kilowatt-hours at 15 cents.

All energy at 1242 cents. 30 kilowatt-hours at 12 cents.

Discount, 10 percent. 250 kilowatt-hours at 10 cents.

Minimum, $1. 300 kilowatt-hours at 9 cents. Marion, Ind. (population, 24,496), Balance at 8 cents.

1907: Minimum $1.

All energy at 10 cents. Moscow, Pa. (population 892), 1927: Minimum, $1.50.

100 kilowatt-hours at 15 cents. South Bend, Ind. (population, 104,100 kilowatt-hours at 124 cents. 193), 1922: 100 kilowatt-hours at 10 cents,

50 kilowatt-hours, at 8 cents. Balance at 8 cents.

150 kilowatt-hours, at 7% cents. Minimum $2.

200 kilowatt-hours, at 7 cents. Woodburn, Ind. (population 493), 1919: 200 kilowatt-hours, at 6 cents. 25 kilowatt-hours at 13 cents.

Balance, at 5 cents. 25 kilowatt-hours at 12 cents.

Minimum, $1. 50 kilowatt-hours at 11 cents. Benton Harbor, Mich. (population, 50 kilowatt-hours at 10 cents.

15,434), 1922: 50 kilowatt-hours at 9 cents.

27 kilowatt-hours, at 12 cents. Balance at 8 cents.

Balance, at 7 cents. Minimum $1.50.

Discount, one-half cent per kil. Hartford, Mich. (population 2,625),

owatt-hour (6-room house). 1930:

Minimum, $1. 30 kilowatt-hours at 10 cents. Roanoke, Va (population, 69,206), 1924: 30 kilowatt-hours at 6 cents.

100 kilowatt-hours, at 8 cents. Balance at 4 cents.

1,400 kilowatt-hours, at 5 cents. Minimum $1.

Balance, at 3 cents.
Jackson, Ky. (population 2,109), 1926: Minimum, $1.
All energy at 15 cents.

Charleston, W. Va. (population, 60,Kingsport, Tenn. (population 11,914), 408), 1923: 1925:

0 to 12 kilowatt-hours, at 10 25 kilowatt-hours at 10 cents.

cents. Balance at 8 cents.

13 to 25 kilowatt-hours, at 9 Minimum $1.

cents. Gate City, Va. (population 1,216), 26 to 100 kilowatt-hours, at 8 1926:

cents. All energy at 12 cents.

101 to 200 kilowatt-hours, at 7 Minimum $2.

cents. Oak Hill, W. Va. (population 2,076), 201 to 400 kilowatt-hours, at 6 1926:

cents. 100 kilowatt-hours at 12 cents.

401 to 800 kilowatt-hours, at 5 100 kilowatt-hours at 11 cents.

cents. Balance at 10 cents.

Over 800 kilowatt-hours, 442 cents. Discount 10 percent.

10-percent discount. Minimum $1.

Minimum, $1. Leipsic, Ohio (population 1,571), 1920: Wheeling, W. Va. (population, 61,50 kilowatt-hours at 15 cents.

659), 1907: 50 kilowatt-hours at 14 cents.

All energy at 15 cents. 50 kilowatt-hours at 13 cents.

Discount, 10 percent. 50 kilowatt-hours at 12 cents.

Minimum, 50 cents. 50 kilowatt-hours at 11 cents. Canton, Ohio (population, 104,906), Balance at 10 cents.

1907: Discount 10 percent.

All energy at 11 cents. Minimum $1.

Discount, 10 percent. Atlantic City, N. J. (population, 66,- Minimum, $1. Present rates 198), 1907:

March, 1935. All energy at 16 cents.

Wildwood, N. J.: Quantity discounts:

30 kilowatt-hours at 772 cents. $1.50 to $5, 25 percent.

40 kilowatt-hours at 672 cents. $5 to $10, 30 percent.

420 kilowatt-hours at 3 cents. $10 to $20, 35 percent.

Balance at 2 cents. $20 to $40, 40 percent.

Water heating, 1 cent per kilowattOver $40, 50 percent.

hour. Minimum, $1.50.

Minimum $1.

Atlantic City, N. J.:

30 kilowatt-hours at 7% cents.
30 kilowatt-hours at 6% cents.
420 kilowatt-hours at 3 cents.
Balance at 2 cents.
Water heating, 1 cent per kilowatt-

hour.

Minimum $1.
Scranton, Pa.:

30 kilowatt-hours at 6% cents.
40 kilowatt-hours at 5 cents.
Balance at 3 cents.
Water heating, 1 cent per kilowatt-

hour.

Minimum $1.
Marion, Ind.:

30 kilowatt-hours at 6% cents.
30 kilowatt-hours at 44 cents.
390 kilowatt-hours at 24 cents.
Balance at 2 cents.
Water heating, 1 cent per kilowatt-

hour.

Minimum $1.
South Bend, Ind.:

30 kilowatt-hours at 6% cents.
30 kilowatt-hours at 4%, cents.
390 kilowatt-hours at 22 cents.
Balance at 2 cents.
Water heating, 1 cent per kilowatt-

hour.

Minimum $1. Benton Harbor, Mich.:

Moscow, Pa.:

30 kilowatt-hours at 69 cents.
40 kilowatt-hours at 5 cents.
Balance at 3 cents.
Water heating, 1 cent per kilowatt-

hour.

Minimum $1.
Woodburn, Ind.:

30 kilowatt-hours at 642 cents.
30 kilowatt-hours at 4%, cents.
390 kilowatt-hours at 242 cents.
Balance at 2 cents,
Water heating, 1 cent per kilowatt-

hour.

Minimum $1.
Hartford, Mich.:

30 kilowatt-hours at 642 cents.
30 kilowatt-hours at 4%, cents.
390 kilowatt-hours at 24 cents.
Balance at 2 cents.
Water heating, 1 cent per kilowatt-

hour.

Minimum $1.
Jackson, Ky.:

25 kilowatt-hours at 6 cents.
50 kilowatt-hours at 4 cents.
225 kilowatt-hours at 3 cents.
Balance at 2 cents.
Customer charge, 35 cents.
Water heating, 1 cent per kilowatt-

hour.

Minimum $1.
Kingsport, Tenn.:

25 kilowatt hours at 6 cents.
50 kilowatt-hours at 4 cents.
225 kilowatt-hours at 3 cents.
Balance at 2 cents.
Customer charge, 35 cents.
Water heating, 1 cent per kilowatt-

hour.

Minimum $1.
Gate City, Va.:

25 kilowatt-hours at 6 cents.
50 kilowatt-hours at 4 cents.
225 kilowatt-hours at 3 cents.
Blance at 2 cents.
Customer charge, 35 cents.
Water heating, 1 cent per kilowatt-

hour.

Minimum $1.
Oak Hill, W. Va.:

25 kilowatt-hours at 6 cents.
50 kilowatt-hours at 4 cents.
225 kilowatt-hours at 3 cents.
Balance at 2 cents.
Customer charge, 35 cents.
Water heating, 1 cent per kilowatt-

hour.

Minimum $1.
Leipsic, Ohio:

30 kilowatt-hours at 7 cents.
40 kilowatt-hours at 4 cents.
230 kilowatt-hours at 3 cents.
Balance at 2 cents.
Water heating ,1 cent per kilowatt-

hour. Minimum 50 cents.

30 kilowatt-hours at 6% cents.
30 kilowatt-hours at 472 cents.
390 kilowatt-hours at 2% cents.
Balance at 2 cents.
Water heating, 1 cent per kilowatt-

hour,

Minimum $1.
Roanoke, Va.

25 kilowatt-hours at 6 cents.
50 kilowatt-hours at 4 cents.
225 kilowatt-hours at 3 cents.
Balance at 2 cents.
Customer's charge, 35 cents.
Water heating, 1 cent per kilowatt-

hour.

Minimum $1.
Charleston, W. Va.:

25 kilowatt-hours at 6 cents.
50 kilowatt-hours at 4 cents.
225 kilowatt-hours at 3 cents.
Balance at 2 cents.
Customer's charge, 35 cents.
Water heating, 1 cent per kilowatt-

hour

Minimum $1.
Wheeling, W. Va.:

25 kilowatt-hours at 6 cents.
50 kilowatt-hours at 4 cents.
225 kilowatt-hours at 3 cents.
Balance at 2 cents.
Customer's charge, 35 cents.
Water heating, 1 cent per kilowatt-

hour.
Minimum $1.

Canton, Ohio:

Canton, Ohio-Continued. 30 kilowatt-hours at 64 cents.

Water heating, 1 cent per kilowatt40 kilowatt-hours at 4 cents.

hour. 230 kilowatt-hours at 3 cents.

Minimum 50 cents. Balance at 2 cents.

Comparative cost-old v. new rates

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49

Percent

Percent

15. 40 250. 500.

$2.25

5. 40 26. 60 49. 60

$1. 13

2. 90 9.90 12. 60

50 46 63 74

$2, 25

6. 00 32. 50 53. 50

$1.00

2. 45 9. 35 12.05

55 59 71 77

$1.95

5. 05
25. 25
45. 25

$1.00
2. 40
8. 05
10. 70

52 68 76

Hartford, Mich.

Jackson, Ky.

Kingsport, Tenn.

Kilowatt-hours

Old bin

Present

bill

Decrease

Old bil

Present

bill

Decrease

old bin

Present

bill

Decreaso

Percent

15. 40. 250 400.

$1.50

3.60
12. 40
22. 40

$1.00
2. 40
8.05
10.70

Percent

33
33
35
52

$2.25

6.00
37.50
75.00

$1. 25
2. 45
9. 10
11.80

59
76
84

$1.50

3.70
20.50
40.50

$1. 25
2. 45
9. 10
11.80

Percent

17 34 56 71

Gate City, Va.

Oak Hill, W. Va.

Leipsic, Ohio

Kilowatt-hours

Old bill

Present

bill

Decrease

Old bill

Present

bill

Decrease

Old bill

Present

bill

Decrease

15. 40 250 500

$2.00

4. 80
30.00
60.00

$1. 25
2. 45
9. 10
11.80

Percent

37
49
70
80

$1.62

4. 32
25. 20
47.70

$1. 25
2. 45
9. 10
11. 80

Percent

23 43 64 75

$2.02

5.40
29. 25
51. 75

$1.05
2. 50
9. 10
11. 80

Percent

48 54 69

Atlantic City, N. J.

Scranton, Pa.

Marion, Ind.

Kilowatt-hours

Old bill

Present

bill

Decrease Old bill

Present

bill

Decrease old bill

Present

bill

Decrease

15.. 40.. 250. 500.

$1. 92

4. 48
24. 00
40.00

$1. 13
2. 90
9.00
12. 60

Percent

41 35 59 68

$1. 69

4. 50
28. 12
56. 25

$1.00
2. 45
9.35
12. 05

Percent

41 45 67 78

$1. 50

4.00
25. 00
50.00

$1.00
2. 40
8.05
10.70

Percent

33 40 68 79

South Bend, Ind.

Benton Harbor, Mich.

Roanoke, Va.

Kilowatt-hours

Old bill

Present

bill

Decrease oid bill

Present

bill

Decrease old bill

Present

bill

Decrease

Percent

15. 40. 250 500

$1. 20

3. 20
18.75
35. 25

$1.00
2. 40
8. 05
10.70

Percent

17 25 57 70

$1.73

3. 95
17. 60
33. 85

$1.00
2. 40
8. 05
10. 70

Percent

42 39 54 68

$1. 20

3. 20
15. 55
28.00

$. 120
2. 45
9. 10
11. 80

217923

41 58

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Brief statement regarding the American Gas & Electric Co.-Their financial structure

and policies In his testimony of February 22, 1935, Judge Robert Healy was kind enough to say of American Gas & Electric Co. system that it was integrated and coordinated, that it constituted a real contribution to the electric light and power business of the country, that it has been admired by engineers and that he would not want to see it broken up. This may not be quoting him verbatim, but at least the record will bear out that in effect he said these things.

The judge continued, however, to the effect that he could not say as much for our financial policies and structure.

It may be that the great amount of detail which he has reviewed in connection with these matters has confused him

as to the facts regarding our financial policies, particularly as our system was the first one reviewed by the Federal Trade Commission over 5 years ago.

In any event I would like to outline our financial policies and clear up all possible questions regarding them.

1. Our securities and those of our subsidiaries are backed by real values: Fixed capital of all subsidiary companies.---

$394, 932, 541. 28 Less for the purpose of this memorandum only all “write-ups”. 42, 500, 000.00 Total.

352, 432, 541. 28 Other capital invested in business related to the principal business.

3, 657, 761. 10 Cash and cash items and other current assets.

28, 683, 488. 60 Prepaid items.

524, 418. 15 Unadjusted debits covered by reserves (restricted bank deposits, salvage, etc.)-

1, 067, 325. 36 Deferred interest in the form of unamortized bond discount.. 13, 279, 374. 04 Total..

399, 644, 908 53 Now against this our subsidiary companies owe Bonds.

207, 131, 900.00 Current liabilities (accrued taxes, accounts payable, pay rolls, etc.).

14, 720, 080. 62 Other liabilities-not current.

1, 817, 228. 14 Unadjusted credits..

900, 819. 98 Total.-

224, 570, 028. 74 Leaving applicable to reserves and surplus and capital-stock issues.-

175, 074, 879. 79 The subsidiary companies have reserves set aside for depreciation, bad debts, etc..

43, 528, 839. 82 Leaving for capital and surplus.

131, 546, 039. 97 Of this preferred stock consisting of 783,644 shares would represent.--

78, 364, 400.00 Leaving to represent the common stock..

53, 181, 639. 97

Now briefly the foregoing shows after deducting every dollar of alleged "writeups” that there is real value back of all securities including the common stock, that cash and current assets are nearly twice current liabilities and that the conservative policy practiced has created fair and ample reserves.

Just a few words as to "write-ups” so-called. These "write-ups" are the result of a company stating on its books the value of property as of the date it acquired it, rather than stating it at the so-called “historical cost” as shown by former owners.

I can see only two ways in which this could be harmful to investors or customers and these are based on "write-ups" being unwarranted.

1. If securities were sold to investors based on these unwarranted "write-ups”, and

2. If such "write-ups" were used as a basis for determining rates.

We cannot be charged with either of these two things. The foregoing figures show over $53,000,000 left for common stock after deducting the write-ups which is assuming that all these "write-ups” are unwarranted which in our case is not true. The record shows that we have never asserted these “written-up" values as a basis for determining rates.

In all fairness these points should be brought out in connection with our companies.

Now as to American Gas & Electric Co. itself.

1. Do its assets consists solely of some shares of common stock of operating companies for which the holding company had paid little or nothing?

The answer to this is most certainly not.

Here is a condensed list of its investments: 1. Bonds of operating companies (at cost)..

$56, 491, 760. 00 2. Preferred stock of operating companies (at cost).

29, 447, 508. 67 3. Loans and advances and other accounts due from subsidiary companies (at cost).

2, 968, 941. 30 4. Miscellaneous investments (at cost)...

1, 946, 371. 70 5. Cash and curret assets (including $6,827,869.59 in Government securities)

21, 524, 343. 69 6. Miscellaneous accounts receivable.

1, 656. 32 7. Deferred items consisting of unamortized discount and expense on bonds.--

5, 861, 491. 68 8. Common stock of subsidiary companies (at cost).

54, 342, 352. 51 Total.--

172, 584, 425. 87 Now against the above

American Gas & Electric Co. owes1. Bonds (due in 2028)

50, 000, 000.00 2. Current liabilities.

873, 919. 91 3. Liabilities-Noncurrent.

1, 655. 00 Total.-

50, 875, 574. 91 Leaving for reservesCapital stock and surplus...

121, 708, 850. 96 The reserves for income taxes, contingencies, etc. amount to..

2, 686, 307. 17 Leaving for surplus and capital stock..

119, 022, 543. 79 There are 355,623 shares of preferred stock..

35, 562, 300.00 Leaving for common stock and surplus.---

83, 460, 243. 79 Note the company's current position. Current assets over 2142 million dollarsCurrent liabilities less than 1 million dollars.

Now the subsidiary company statement showed us unquestioned value (after deducting all “write-ups"') for their bonds and preferred stock with over 53 million dollars left for their common stocks. Let us see how the holding company shows its interest in these securities on its books.

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