The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1910-03-09
Adjustment Of the
Artificial Gas and Wafer
Works Situation is now Re-
ga,ded Possible, and it is
Believed Provisions of Fran
chises viii be Fair TO Cor
pOrQtiOnS and Citizens.

Palladium has been fighting for in the
last year. Tonight the committee on
franchises and contracts of the city
council, together with the board of
works and the city attorney, will go
over the water and gas situation. Pos
sibly the public service corporations
will be represented.
Whether they are or not, the water
company has made overtures to the
city authorities toward securing
settlement of the question. The Rich
mond Natural Gas Company, repre-
sented by r. G. Hibberd, was told that
the administration was willing to con-
slider proposals for an artificial gas
franchise at any time, but as both the
franchises will be of a general char
acter they probably will be settled at
the same time. as many of the men are
interested in both companies.
Modern Franchises.
The stand taken by the administra-
tion is that franchises should contain
a real provision for buying in case
municipal ownership is desired by the
citizens. Not only that, but it believes
valuation should be put on the
plants and business right now, SO that
the increase of the business will not
make the price prohibitive.
The administration is considering
methods of obtaining the following
modern provisions: Participation in
profits, the right to buy stock, stopping
the "unearned increment"
City Attorney Gardner has been
working hard to devise an equitable
arrangement by which these things
may be accomplished, and the appar-
ent present disposition of public serv-
ice corporations is friendly toward the
propositions which they at first con-
sidered undesirable.
A Way Seems Clear.
At present 1t seems likely that a
fair and satisfactory way out OF the
tangled situation will be arrived at
This does not mean that. the public ser
vice corporations will not seek to OBJ
tain all that they can get for them
selves, but it means that they appar-
emily recognize that the people are de-
termined to have the franchise along
modern lines and will not sit back and
see old conditions repeated. 1t also
seems to indicate that there is a much
better understanding generally of the
fairness to all parties, citizens and cor
porations like the famous Chicago
street railway agreement.
1t is Just along these lines that
the administration has been working.
All three of the fundamentals of the
newer thought on aspects Of public
What First Step Is.
Briefly the first step is to agree
on, a present valuation OF the busi-
ness. This will stop what is common
" called the "unearned increment
and give the city the right to pur-
chase the franchise and the business
at its present value-rather than at
what it will be worth years hence. In
further explanation 1t needs to be
said that all extensions of the busi-
ness will be considered by themsel-
yes and will so in at cost. Therefore
II the city should accumulate enough
money to buy the water works in
twenty years it would buy at the price
set now. plus the actual cost Of the
extensions made during that time.
Further than that, the city will
have the right at any time to buy the
stock which is to be issued to present
the extensions. AS this stock will pay
dividends it will, it is now thought. be
a better investment than putting the
money in a sinking fund.
In the case of the water works. the
fact there is no way of forcing the
individual holders OF the old stock
to sell, the fact that the state law
only provides for the buying of ma
jority of stock. and the still better
reason that the city has not enough
money to purchase outright. will pre-
clude any immediate control of the
company.
Power Of Legislature.
However, the legislature may easil,
give cities and towns the right to buy
stock In corporations in lesser quan
titles. in which case. stock may be
bought at private sale in sufficient
quantities to give the city control ev
entually with that stock which i
takes in on the extensions.
So far the plan deals with purchase
and unearned increment The res
CONSIDERS paruclpatlOn III tue pTOlitS
The company is to be granted oper
ating expenses. including interest OF
bonds. The salaries are to be equita
bly, adjusted to both parties. city ant
corporation, the company to keep III
the plant-which leaves the net prot
its. The exact division of profits ha'
not Of course been settled. but afte
a certain per cent has been allowed
to the corporation the remainder will
be divided between the city and th'
company This is the feature Of tn,
Chicago street railway franchise.
The safeguards. such as requirin,
reports, representation on board o
directors. limiting salaries, controllin,
extensions. proper distinction betweel
repairs and extensions, ETC.. canno
be definitely formulated until th'
whole plan is put in its trial form.
II IL this line Of thinking whicl