702 ECONOMICAL ASPECTS 



5. What reserve of profits will be retained before divi- 



dends are to be declared? 



6. If preferred stock is offered, is it cumulative, does it 



vote, when is it redeemable, and at what price, 

 what sinking fund provision is made for redemption 

 and are any peculiar provisions attached? Do any 

 bonds or other obligations take precedence of the 

 preferred stock? 



7. If bonds are offered, what interest is paid, and when 



and where; upon what property are they secured 

 and when and how are they paid; is the trustee 

 or trust company of repute; under what conditions 

 are the bonds foreclosable; when, and how are they 

 or may they be redeemed; are there any other 

 securities taking precedence, and are there any 

 peculiar provisions in deed of trust? 



VIII. General 



1. What is the previous history of the enterprise or 



the property or undertaking on which it is based? 



2. If inventions enter prominently, what is the pre- 



vious record of the. inventor? 



3. By whom are the statements made and is the party 



making them reliable? 



4. Are there any contracts or obligations not now effec- 



tive by which the enterprise will subsequently be 

 affected? 



COST OF HYDRO-ELECTRIC POWER PLANTS 



The cost of water power depends upon a great variety of 

 factors, the essential feature of the design of the plant being to 

 keep the cost within reasonable limits, so that the fixed charges, 

 which constitute by far the greatest part of the power cost, shall not 

 be excessive. The allowable cost of a water power can obviously 

 not be more than the cost of producing the same amount of power 

 by some other means, usually steam. The cost of generating the 

 power should, furthermore, not be confused with the cost of power 

 delivered. Besides the cost of producing the power in the gen- 

 erating station comes the expenses involved in distributing the 

 same to the customers, which often amount to several times that 



