The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1913-04-01
Utilities Commissions Decision
in Famous Case.
Finds That No Cause Exists to
Raise Rates.
KANSAS NATURAL s BIG PROFIT
Commission Doubts Financial
Stress and Gas Shortage.
Paid $6,50O,O0O on Bond Ac-
count and Charged to Expense.

Gas rates in Kansas will remain at
rs cents per one thousand cubic feet
under the decision today of the public
utilities commission, which concluded
the so day hearing regarding the ap-
plication of the Kansas Natural Gas
company for a mandatory increase in
rates to individual consumers. In ad-
dition to denying the increase in rates,
the commission questions seriously
either the financial stress or the in
adequate supply of gas as pleaded by
the Kansas Natural and from the vol
umes of figures finds that the big cor
poration should be in a fairly healthy
condition. Forty Kansas towns and
cities are affected by the decision
More than 5000 words are contain
ed in the opinion in the case. And
from the hearing which dragged
through eight weeks, more than TO-
900 typewriter pages of evidence was
taken. From this massive document.
the utilities commission holds that it
has jurisdiction in the case and that
in view of the evidence the Kansas
Natural and it's subsidiary companies
are not entitled to an increase in rates.
Throughout the decision is a clean cut
verdict against the gas company.
1t was after the Montgomery coun-
ty district court found that the Kansas
Natural, the Kansas City Pipe Line
company and the Marnet Mining COM
pany were acting in violation or the
anti trust laws that receivers for the
Kansas Natural were named by Judge
John c. Pollock of the federal court.
Following this action, the receivers
sought an order from the utilities
commission granting them the right
to increase the rates to consumers to
a price between so and 65 cents
thousand feet for the same gas which
had previously been sold for 25 cents.
No Cause for Complaint.
But the commission finds that prior
to December 81, 1912, the gas COM
pany had no real cause for complaint,
although it was in the hands of re-
ceivers and sending out distress sig
nails The commission admits that tho
stock of the company does not repre-
sent any real value at this time. Yet
the company issued $14,745,0OO in
bonds for which it received $13,4O4,-
$50 and that these bonds fall due in
installments covering a period OF ten
years.
And then, there is that alarming
finding of the commission. 1t reveals
the fact that Sc, 900 has been paid
on the bond account and charged by
the gas company to operating expenses.
"Such bookkeeping is unusual" says
the commission in it's decision, land
is accounted for by the gas company
upon the grounds that the natural gas
business is hazardous and of tenn
invested must be paid back during the
life of the business. Admitting the
contention, it follows as a matter OF
bookkeeping that the assets of the
company, when the capital has been
returned, belongs to the income ac-
count. In other words, when the $14.-
745,000 of bonds are paid, there being
no other investment on account OF
capital, the assets will be clear profit
and under the system of bookkeeping
adopted by the gas company, must go
to that account"
In Good Financial Condition.
The commission then points to the
fact that at the end of ten years the
gas plant of the Kansas Natural will
be worth four million dollars-salvage
value-and that already 51,45 per
company has been cleaned up. So,
the commission figures thus: $2,O5S,-
900, as 51.45 per cent of four million,
should be carried in the profit account
at the end of the present year. Added
to this is sinking fund which now
to $466,916.6S, which gives a
balance of $3,493,458.16 of receipts
over expenditures at the close of the
that this is not an unsatisfactory
showing, and intimates that it is hard
ly one on which to base an application
for increased rates.
Again The Kansas Natural state
ment shows four million in first mort
gage and three million in second
mortgage DonuS But the commission
points to the fact that the statement
doesn't say one word about the money
realized from the sale of bonds of the
City Pipe Line company nor
does it mention money realized from
Marnet Mining company bonds.
Then the commission calls attention
to the fact that in nine years the COM
pany has sold gas in the amount of
1923, 1878. The total revenue
omitting sale of bonds-totalled $685.
341, ,024.S9. For the sale of gas alone
the revenue was as follows:
For wears 1904 and 1909. AAa 900 10