The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1913-07-09
Kansas Natural Gas Company
and the Receivers
Accused of Dealing Unfairly
With People of Kansas.
MORRISON FILES HIS REPORT
Made Investigation for the
State Utilities Commission.
He Makes a Number of SenSa-
tiOnaI Allegations.
SAYS HUGE SUM WAS DIVERTED
For Purpose Making a Show
ing of Insolvency.
Finds Company Has Plenty OF
Gas and Money.
SAYS HUGE SUM WAS DIVERTED
For Purpose Making a Show
ing of Insolvency.
Finds Company Has Plenty OF
Gas and Money.

Sensational charges concerning ques-
tionable business operations both on
the part of the officials of the Kansas
Natural Gas company and the receivers
appointed for the company by Judge
John C. Pollock. are contained in
bulky report filed today with the pup
lie utilities commission by T. F. Nor
rison of Chanute, special gas expert
appointed by the commission to lnVes-
tigate the conditions in the Kansas
Oklahoma gas fields. Morrison
charges proved the opening wedge for
a probable new line of investigation
into the affairs of the gas corporation
by the Kansas commission.
In half dozen instances, Morr1-
son charged. the gas company has been
guilty of bad faith with the public and
the courts. He charged specifically that
not less than a quarter of million dol
lars of the funds of the Kansas Natur-
al was diverted two days before the
federal receivership suit, in an effort
to esta blish the insolvency of the COM
pany One instance shows that $780,
900 was used to pay notes which were
not due. Then Morrison quotes from a
cipher telegram to the gas company
treasurer instructing him to divert $780,
600 in funds to a bond fund for which
surety had already been provided
Questionable Dealing Charged.
But the dealings of the Kansas
Natural Gas company to make a show
ing of insolvency and to secure an in
crease in gas rates did not stop here,
Morrison charges. He insists that there
is at present an ample supply of natur-
al gas available, that more than 300
producing gas wells have been drilled
in the mid-continent field this year and
, that this gas is now at the disposal of
the Kansas Natural people. Yet the
gas company has neither contracted
for the purchase of this gas nor shown
evidence that they intend to take ad-
vantage of the increased supply. Furth-
er the Kansas Natural has misrepre-
sented their available supply, according
to Morrison, and have made an effort
to deceive the public by the statement
that it could not supply more than five
billion cubic feet of gas during the
present year. Yet information which
Morrison has gathered in the gas field
is to the effect that the company's sup
ply has not diminished and that 30
billion cubic feet of gas can be sup
piled this year and that records show
that two and one half billion cubic feet
is now being pumped through the COM
pany's mains each month
His findings summarized are as fol-
lows:
..First-That there is an available
supply of natural gas and enough to
fully tax the capacity of the Kansas
Natural Gas company's mains during
the coming winter, provided steps are
taken to procure new purchasing con-
tracts for more gas.
''Second-That nothing is being done
at present to secure new contracts for
purchasing more gas.
''Third-That unless something is
done toward the adjustment of the al
fairs of the Kansas Natural Gas COM
pany, that the people dependent upon
the company will suffer more than the
company.
"Fourth-That-i it makes no difference
how much gas the Kansas Natural Gas
company may have in extreme cold
weather, it is a physical impossibility
to supply all of its consumers because
its mains are inadequate"
Are Receivers Dodging.
And the report states that the fed
eral receivers who now have charge of
the property of the Kansas Natural
Gas company contend that they have
no power or right to make new con-
tracts to purchase gas for the coming
winter. Mr.. Morrison adds:
During the summer is the time to
make contracts for the purchase of gas.
and unless the federal courts advance
the hearing OF the case, the innocent
public will be the sufferers when cold
weather comes. I have reliable infer
abundance of gas to sell and who would
be willing to contract for their entire
output with the Kansas Natural Gas
company. but because of legal techni-
caities standing in the way of the re-
ceivers making contracts. these pro-
ducers have to seek purchasers else
where The only question now is will
the jurisdictional question be settled
in the federal courts in time to enable
one set of receivers to go out ard
make new contracts for the purchase
of gas before cold weather comes. The
people of Kansas should not be made
to suffer because of the shortcomings
of a corporation
New Gas Wells.
Reports show that since January 1,
1913, there have been 31T gas wells
completed in the mid-continent field,
of which 1S2 are in Oklahoma and 135
in Kansas; and that the activity in de-
velopment has not abated. 1t is said
that IT Is not unusual for these new
gas wells to start off with a daily
open flow capacity of twenty to thirty
five million cubic feet, and during the
past few days. two gas wells were
drilled in, within a few miles of the
Kansas state line, with daily capaci-