The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1912-10-10
Its Financial Condition Known
to Attorney General.
STATE WILL WATCH CASE
VIII Oppose Effort of Receiver
to Raise Price of Gas.
Story of Gas Co. Formation
and It's Present State Affairs.

That the state OF Kansas will keep
a close watch on the receivership suit
of the Kansas Natural Gas company
was indicated today by Attorney Cen
eral John S. Dawson, who urged the
public utilities commission to order a
transcript of the evidence to be ta-
ken in the hearing set for October 81.
Dawson was not surprised when the
Kansas Natural gas people, through a
stockholder, sought the protection of
a receiver and stated that he himself
had only evaded an application for a
receiver for the gas company in his
recent suit, fearing that the corpora
ton would consent and thereby burden
the state with the heavy expense of
carrying on the business
Last week the federal court appoint
ed a commissioner to take testimony
in an action looking to an investigation
of the gas supply. This action was
brought on behalf Of a number OF
towns in which the Kansas Natural
holds a franchise and included such
cities as Kansas City, Kan, Topeka,
Leavenworth, Lawrence and other
towns affected by the shortage in the
supply. Then came the receivership
suit in which it was alleged that the
big corporation is unable to pay divi-
dendS on the present rates based on
the gas supply from the southern
Kansas and Oklahoma fields. It also
seeks to raise the rates to consumers
On that proposition of an increase
in the rates to consumers, Dawson
declares that the courts have no power
to order an increase in these rates
and indicates that the state will pro-
badly contest any attempt to secure
a change in the present prices He
urges that this is legislative power
alone and that relief from the present
rates cannot be given by the courts.
Dawson Tells of Case.
''The voluntary application of the
Natural Gas company for a
receiver does not surprise me-" said
Dawson. Il have had a dozen lawsuits
against that company, and know some
thing of its financial and other trou-
bles. In my suit against the company
last week 1 was afraid to ask for a. re-
ceiver for fear the company would
it, and the state would have
the burden of running it's business and
finding the money to do it, and find
ing the gas to supply the people this
winter. 1 thought Eugene Mackey,
able to wrestle with that problem than
the state. Evidently Judge Pollock
thinks so, too for he has appointed
President Mackey receiver.
"I doubt if the court can give the
company the relief it seeks. 1t wants
% raise it's rates to so cents per thou
sand feet and asks the court to order
he company to cease furnishing gas
20 industries. I doubt the power of
he court to do that. The making Of
-ates is a legislative and not a judi
,ial function. So, too. the disposi-
ion of the gas product. 1t might be
good public policy to devote the gas
exclusively to domestic uses; but
courts cannot make public policy.
That, too, IS the exclusive province OF
he legislature, within the limits pre-
cribed by the people in their consti-
ions"
Dawson himself expects to attend the
hearing to investigate the gas sup
,ly This investigation will be held
n Independence and a number or
owns in the gas field. 1t promises to
)e lengthy affair and transcript
If the evidence from the hearing will
De very expensive. But the attorney
general feels that a record Of this tes-
imony will be of great value to the
tate and will urge that a copy be
provided for future use.
which the Kansas Natural is now do
ng business will be urged to send
heir local city attorney to attend at
east a portion of the hearing. Thus
he interests and rights of the state
md the affected cities will be pro-
ected and state kept in close touch
With the progress of the commission
RS Investigations
About the Kansas Natural.
John Kinny, of Pennsylvania is
bringing the complaint against the
Kansas Natural Gas company.
The company was incorporated
April. 1904, under the laws of Della
ware with a capital stock Of $6,00O,oOO,
vhich was doubled the next month and
livided into 12O, 900 shares of par value
It 800 each. The gas mining lands
we're situated in several Kansas coun-
les, aggregated over 165,0O0 acres ana
,roduced gas in paying quantities.;
hough the rock pressure was low, the
7olume was enormous. and the drilled
vells were believed to be capable OF
Producing sufficient gas to supply
Western Missouri and eastern Kansas
With light, fuel and heat They were
-alued by experts at several million
Iollars and extended in a southwest
rly direction from Anderson county
In July, 1904, the Kansas Gas com
,any purchased all oil and gas lands
or the sum of S12. 100000, giving in
,avrnent capital stock amounting to
~. .OO0, 900, and 300 mortgage bonds.
The gas company then piped the vol
me of gas to several cities In Mis-
ouri and Kansas, including Kansas
.ity. St Joseph Joplin, Topeka, Law
ence, Leavenworth and Atchison, and
lnanced the scheme itself.
Field a Disappointment.
Soon after it was discovered that
What had been supposed to be a gas
ieId was in reality a series of contin-
Ious pools; they produced gas in large
Quantities, but waned rapidly; COM
ressing stations were erected. and
nore gas companies were bought out
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