The daily Gate City. [volume] (Keokuk, Iowa) 1855-1916, 1909-05-06
CITIES CAN FIX PRICE OF GAS.

CITIES CAN FIX PRICE OF GAS.
The state supreme court in a decis-
ion rendered on Tuesday affirmed
case from Cedar Rapids involving the
right of the city to fix the rate on gas.
The opinion was written by Judge
Laid, The court sustains the lower
court in holding that the city has
right to fix the gas rate, and also the
right to declare the 30-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
ton have been watching the case with
interest.
The court dismisses without preju-
dice the petition of the Cedar Rapids
Gas Light company for an Injunction
restraining the citv of Cedar Rapids
from putting into effect the ordinance
fixing the price of gas at fiat rate OF
80 cents per thousand feet.
In substance, the court orders the
gas company to comply with the city
ordinance and sell its gas at 80 cents,
with the understanding that If, upon
fair trial, this rate is found to be not
sufficiently remunerative, the case may
be reopened and a remedy applied.
Since Jan. /, 1907, when the 9O-cent
ordinance was to have become erect
live, all money paid above this rate has
gone into the hands of trustee, as
lordered by the supreme court, and Will
now be paid back to the company's
patrons. Before and since that date
the rate has been $1.15, with 10 cents
additional for failure to make prompt
payment, although the company was
selling as low as 80 cents to large con-
sumers. After citing the facts In the
case the court says:
"The power of municipality to reg
ulate rates of gas is not questioned,
save that these may not be so reduced
as to deny the company fair return
upon the. property used in the service
of the public.
1.-THE sole inquiry is whether the or
dinance if enforced will operate to de-
lprive the company of fair compensa-
Ition for the service to be rendered.
THE act of the municipality in fixing
rates is purely legislative, and, as 1t Is
by authority given by the legislature
lis presumed to have been in the proper
Exercise of the power conferred.
For this reason the rate establish
ed by the ordinance assailed Is pre-
Isumed to be reasonable and this court
can only declare it otherwise upon
finding that it is so low that its adop
To q cn4f1nn
plaintiffs property
Three questions of fact, bearing or
whether or not the 80 cent rate would
be confiscatory are then entered into
by the court in great detail. These arr
the fair value of the plant; how mucf
gas was being furnished, and what wa'
3 the cost per thousand cubic feet o
(, gas.
In reviewing the evidence of the ga
: company tending to show the value o
: the plant the court finds that IN man,
a instances the company's estimate
! we're exaggerated, and considerabl
i fault is found with the manner Il
which the company arrived at the Walt
alton.
AS one element of value the CON
}. pany urged that it was going cor
e Germ" which the court holds is onl
q another way Of giving value TO goo
n will" Good will, says the court, is nc
!, to be taken into account as an asse
l. where the company is granted m'
u nopoly.
= The court also holds that the con
pany overvalued It's pipes and main
y and the opinion discounts the con
al pany's contention that these have Il
IN creased in value because the stree
80 have been paved since they were la
IT. and the mains could not be replace
&c for what they originally cost. TT
~ the plant and improved with dwellir
~ houses are also thrown out by tt
,d court as an element of value to
ne court holds that mains could be la
ID with new pavement or along the par
o. ing.
40 Lots purchased by the company ne
us reckoned with in fixing the rate of ga
'u ut will not do" said the court, !"
~ burden patrons Of today to provi
on land for future needs"
nut The court estimates the value of Il
Sc plant as between 100000 and $3.50, OF
is as compared with the company's es
he mate of s36S,0oo and the defendan
re- estimate of s27S,621eo. The tot
u, "a amount of gas sold during 1907
n found to have been 1o3,o79,190 cub
ol. feet, which at 30 cents thousa
would have yielded s92,771.1O- T
he cost of manufacturing, DISTRIBUTE
is and making collections is estirhat