upr000300 27

subject to redemption at any time after five years after August 1, 1916 upon the payment of a premium of 2c/» and the accrued interest thereon. As stated above, the bonds amounting to $5000.00 mature August 1, 19El, At that time the moneys in the sinking fund, if theprovisions of the deed of trust are carried out, should likewise he applied to redemption of bonds. Thereafter it will be observed that $3000.00 of the bonds mature annually and an additional a-mount of bonds of approximately #2000,00 will be subject to redemption through the operation of the sinking fund. rest Elverside Canal Company desires authority to issue |66,000.00 face, falue of bonds and sell $60,000.00 thereof at not less than 97 per cent of their face value plus accrued interest, In as much as the sale of $60,000,00 of bonds will yield the company sufficinet funds to % mee- t, ; «SP|| its present needs, I am of the opinion that there is no he* cesslty to authorize the issue of the remaining $6000.00 at this time. Of the proceeds obtained from the sale of the bonds, the company proposes to use $25,000.00 to purchase the canal system and $31,353.81 for the following purposes: To pay notes, representing money borrowed to reconstruct canal,..... ..$15,000.00 | To pay bills payable , representing cost of material used in reconstructing can­al *•?***«•»,»*•.•»•».»••**»»»»•»••*•*•*••• 10,303.81 For proposed improvements.................. 6,150.00 #31,353.81 The evidence submitted in support of these applications shows that applicant will he called upon to expend ap­proximately #3,500.00 in addition to the aforementioned #25,000.00 to obtain ta sleair title to the canal. It desires authority from the Commission to obtain this additional money by issuing its note for a term of one year or less and to secure thepayment of the note by pledging stock of the la 6