Steam for Duluth

Since the summer of 1929 Duluth has hoped to have a steam corporation, one whose central plant would supply heating to the business district of Duluth just as New York Steam does in Manhattan.* In 1929 a franchise was obtained and P. W. Chapman & Co., Manhattan bankers, contracted to raise the needed $1,800,000. Market conditions made it impossible. In the autumn of 1930 the Chicago investment house of Haskell, Scott & Byrne pondered the matter. Partner Russell Wilfred Geyer investigated, found that market conditions were still impossible. But he had a smart idea, and last fortnight ground for Duluth Steam Corp.'s plant was broken. Partner Geyer realized that many construction firms have much cash, no business. The root of his plan was selling $1,500,000 worth of one-year 6% notes to the companies who would do the construction work and supply equipment--in other words, paying them in paper. At the end of the year market conditions may make a public offering of bonds possible. At least, it would be easier to sell bonds in a finished plant than in a construction project. But even if the bonds cannot be sold the contractors will not have to sue Duluth Steam for their money. Ninety thousand of the company's 100,000 shares of common stock have been trusteed and if the notes cannot be met the stock will be distributed among the contracting firms, who feel they will surely get their money back as owners if not as creditors. For their financing, Haskell, Scott & Byrne will keep 10,000 shares.

*Last week New York Steam, despite Depression and the warmest year on record,, reported 1931 earnings of $2,019,000 against $1,703,000 for 1930.

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