Kingsbury County independent. (DeSmet, Kingsbury County, S.D.) 1894-1929, 1906-08-24
Sherman Morse in American Magazine for
,

oOOl after the ulSCON cry VI oil
gas near Indianapolis the common
counci of hat city adopted an or
dinance limiting the price that could
be charged. 1t was known that the
supply or gas was very great, II at
the time 1t was supposed TO be mex
haustible. Almost the only expense I'M
Owed in delivering gas to
was for the laying of mains, and 1t
was determined that the people of the
city should receive at least their share
of this free gift of nature.
But such a limitation of their profits
was by no means included in the plans
Of the men who maintained a monop-
oily of the manufactured Illuminating
gas industry of the city and OF those
who had piped the natural gas from
the wells TO the city lire. Demand was
mad hat the rate for natural gas as
fixed by the ordinance be doubled, un-
der threat that otherwise indianapolis
would be left to shift as best it could
with coal as fuel, while other towns in
the gas belt were forging ahead because
of the cheapness and convenience OF
gas.
In this extremity the people deter
mined to fight. Various plans were
discussed, and there were many who IA
Vored the building of a plant by the
city, but against this proposition was
llle lllSupCIdDlE ODJCIAIOil ld Az NV
limit of the city would not permit the
Raising of the money necessary Cor the
enterprise from the public funds. Pub
lie sentiment was, moreover, strong
against any action which would deliver
over to either political organization the
spoilS which necessarily accrue 10 the
operation of a municipality owned plant.
Protection Against a Sell-Cut.
Out of this discussion was gradually
evolved the plan of the Consumers Gas
Trust company. 1t was recognized that
If an independent company was or
ganized on the usual lines, h existing
Corporation, with it's great wealth,
would almost certainly buy II out, TO
preserve tine monopoly. For this rea-
son., ii was determined that stockhold-
PRS in the new company must be de-
priYed of the power TO sell 1t out, With
out at the same time so restricting
their rights as to cave no inducements
for investment. 1t vas provided that
subscribers must place their stock In
The hands Of trustees who had irrecov-
able power, or proxy, TO vote II for di-
tectors. While the holders of the stock
thus remained, the actual as well as
nominal owners of the certificateS and
could transfer them at will, they had
no control of the operations of the COM
Sany. Opposing interests might buy
up the entire issue of stock, but could
not by reason OF such purchase elect
a single director in the independent
company. Special Inducements, how
ever, were offered for subscriptions to
The stock by the promise of 8 per cent.
dividends and the redemption of the
entire issue at par as soon as the
profits of the company would warrant
1t.
Having the interests Of the public
and not their own pockets at heart, the
promoters of the enterprise sought to
fix the fairest possible charge for gas,
and the exactly fair charge is, of
course, at cost, after a reasonable re-
turn has been made to investors, in any
enterprise which it is sought to direct
solely in the interests of the public. No
ground is then left to complain of the
taking of excessive profits, nor is there
occasion to reduce efficiency in order
to squeeze out an extra dividend for
purpose of stock manipulation. With
no capital stock on which to pay divi-
dends, there should be no motive for
seeking TO make a profit from the BUSH
ness.
The Public's Share Of Profits.
This was an extreme reversal of the
usual method OF organization of cor
porations. Instead of paying email
dividends out of large profits and Great
ing a surplus fund to form q basis for
watering lilc SIOGh lOI sptCuldlINe puT-
poses, the profit, according to this plan,
could not fail to go to the public in the
reduced price for the service, as soon
as the investors had had returned to
them the full amount of their invest
ment.
There was, Of course. the chance that
the investors would receive no returns.
either IN the form OF dividends or in the
repayment Of their capita, but so capable
was the management of the company that
in fact, dividends were paid promptly, all
other expenses were met and within a
dozen years all hut s per cent. Of the org
inal capital had been redeemed. Since that
time extra dividends have been declared
until now there has been paid 10 per cent.
bn the original investment, in addition TO
8 per cent. dividends as long as any GER
~tiicates were outstanding. and only the
failure of the supply Of natural gas three
years ago prevented the complete con-
summation of the project as pianned-the
seduction of the charge for the service to
the actual cost of delivery.
So much for the interests OF the invest
prs in thG enterprise. There being no other
disposition possible of the profits arising
from the sale CT the company's property,
the holders of the stock VII eventually
deceive at least twice tie amount invested,
in addition TO dividends twice as great as
they would nave been likely TO Obtain
from ordinary investments. There &c q.
was any complaint IN Che rert OF tn
stockholders that q ey were ret rcce ,tig
fheir entire due; on the contra ", fic. e.
mand for the stock was 50 gresr th.f.
much of II was borght In fy = ne. q
ment company crgal zec ~ i :
pose. the pror-o.ers ~ Z Dis Ne
their Torcy.
Nor 81. - gSile - : .i-ni ~ ,ss..
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