Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1909-05-04
Special to rimes-Republican.

Special to Times-Republican.
Des Moines, May 4.-The supreme
court today affirmed the Cedar Rap
Ids gas case, involving the right of the
city to fix the rate on gas. This is the
famous case in which Congressman
Good made a record of standing by the
people, which record sent him to con-
gress. The court sustains the lower
court in holding that the city has a
right to fix the gas rate. and also the
right to declare the 90-cent rate is suf-
ficient; but holds that the question of
the rate being confiscatory may be de-
termined after lawful trial at the lower
rate. Other cities of the state and ma
tion have been watching the case with
interest
History Of the Case.
On Dec. 81, 1906, the city council of
the city of Cedar Rapids passed an
ordinance limiting the price which
could be charged for gas, to 80 cents
per LOCO cubic feet, or 81 per thou
sand If the bills were not paid by the
10th Of each month. This reduced the
rate from the $1.15 net rate which had
been in operation for number of
years. Before the ordinance was pub
lished or signed by the city recorder,
an action was commenced by the Ce-
dar Rapids Gas Light Company to en-
Join the enforcement of the ordinance.
A temporary injunction was issued
by the district court enjoining the en-
tforcenent thereof. A motion was
made to- dissolve the injunction, also
for modification thereof. The court
modified the injunction by requiring
$4,000, instead of the bond of $4,000
previously given. The court also or
dered that as a condition of said bond
the gas company should give two re-
ceipts. one receipt for the amount col
lected in excess of the ordinance rate
of 80 cents per 1000 cubic feet, with
a promise to repay same together with
interest thereon at per cent from
and after the date of fIsuch payment, in
the event the ordinance should be
found reasonable and valid.
Books Ordered Produced
The city answered the injunction
petition Of the plaintiff and attached
to their answer a large number Of in
terrogatories, calling for information
with regard to the books Of the gas
company. From the objections of the
plaintiff, the company was ordered by
the court to answer the interrogation
les. The next step taken was to secure
an order for an examination of the
plaintiffs books. This application was
resisted, but the court ordered that the
books be produced.
The case proceeded to trial in the
district court of Linn county on the
18th day Of November, 1907, before
Judge e.. 70. ellison.
The attorneys for the city were
Congressman (then city attorney
James W. Good, and Jamison g.
Smyth. The attorneys for the gas
company were John N. Hughes and
James II. Trewin.
The principal witnesses for the city
were Prof. Edward W. Beenis, Of
Cleveland, o., and James Hall, Of the
Arm Of Warwick, Mitchell & CO., Of
Chicago. The books of the gas COM
pany were examined under tne direc-
tion OF Mr., Hall and his evidence
showed that the average cost for five
years. 1992-1906. inclusive, for manu-
featuring gas, was 1858 cents per 1000
cubic feet; that the average cost for
said period for distributing gas, In
Guiding leakage, was 24.51 cents, or an
average cost of manufa cturing and
distributing for said period Of 64.O4
cents per 1000 cubic feet OF gas sold.
This included an average charge of
1871 cents per 1000 cubic feet for re-
pairs and renewals or depreciation.
Given Valuable Franchise.
In the trial Of the case 1t was de-
veloped on cross examination, that the
capital stock Of the Cedar Rapids Gas
Light Company was $15O.000; that the
bonded Indebtedness was $4,000: that
nothing was paid for the capital stock
at the time It was used, but that the
said stock was divided among the IN
corporators Of the company, for the
franchise which had been voluntarily
given by the city council.
The evidence also showed that the
gas company claimed its property was
worth $50e000. $lOO,00D of which was
the value OF the franchise, and the iesr
represented the value of the physical
property The evidence also showed
that during the five years. 1902 2-19Os,
inclusive, the company spent about
$l50.00 for new equipment and ex-
penses, all Of which was paid out Of
the earnings, and in addition the COM
pany paid q dividend OF per cent upon
its capital stock and interest on its
bonded Indebtedness.
Paid Big Dividends.
The evidence also showed that there
wonld be available for dividends, after
tf1esPayTneT,ttD on the mortgage indebted
ness 1c ne year 1907. 323, ,7O0.1O, or