The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1914-02-02
$850,000 new BOND
ISSUE REQUIRED TO
CHECK FORECLOSURE
Utilities Commission Says 1t
Voted Increase to Safe
guard Holders.
MEMBERS PERPLEXED
OVER GAS PROBLEM
'DO Not Condemn Us for
One Mistake" Says
Duncan.

do not condemn u.s. for one mis-
take! just keep your eye on us and
see if we do not do the right thing
before we get through with this ques
ton"
This was the statement of chairman
Duncan of the public service commits
sion Saturday afternoon after the COM
mission refused to reconsider its &C
tion in approving the sS5O,000 bond is
sue on the property of the r. l.. III. q
p. Co.
The statement was made after May
or Robbins and City Attorney Bond
had argued for two hours that the
commissions action had established a
minimum valuation on the company S
property, and had put itself in po
sition of being compelled to con
slider that valuation as a basis OF
rate making if a petition for an in.
creased schedule of natural gas rates
was ever submitted.
Duncan 10 Frank.
Chairman Duncan bluntly remarked
that If the commission had refused to
authorize the bond issue it would have
spelled financial disaster for the L. III
& p. He also said that he considered
the local company to have holdings to
falling in value the amount of tbs
bond issue, but he said the commits
sion would not consider such a valua
ton as a basis for rate making If a
petition for rate increase was ever
submitted.
Chairman Duncan. speaking for the
<,r,v ,s.-ci cnr@ hot ha
pany has bonds to the amount of $500.
600 which came due January /, and
had 100000 in notes. which would
come due March Is, and there was nc
money in the treasury to pay the
notes. The company claimed that the
bonds had been bought in by the hold.
ing company to keep the original hold
ers of the bonds from foreclosing and
throwing the company into the hands
of a receiver.
There is no disputing the fact that
the problem in Richmond is a very Sc
rious question" said Mr.. Duncan, but
the commission did what it thought
was best under the circumstances
The company had entered into con.
tract to supply the city with natural
gas and its contract must be carried
out. We believe that since the com
pany's experts had placed a valuation
of over $1,20O,0O0 on the plant that
they would not miss the figure more
than 25 per cent. and therefore bond
issue of $3.50, 900 would be justified"
Bond Against Step.
The city attorney argued with the
commission that the amount of the
bonds and notes now falling due did
not represent the real value of the
plant for a great part of this amount
was water" Mr.. Bond said that this
water" would have to be squeezed out
some time and that now was as good a
time as any.
The chairman said that the commits
sion had ruled that it would have no
power under the law to inquire into
any corporation transa ction which had
been made previous to the passing OF
the law and, therefore, it has no au-
thority to inquire into the facts con-
cerning the actual value of the L. II.
& p. company's bonded and note in
debtedness. Mr.. Bond took exceptions
to the ruling but was informed that
the commission would not reconsider
the action it had already taken.
City Attorney Bond argued that the
action of the commission in approving
the bond issue would mean to the in
vestor that the commission had placed
it's approval on the bonds with the un'
derstanding that there was that much
property there, and later when it came
to value the property for the purpose
of rate making the valuation of the
plant would be reduced: that the pur-
chasers of the bonds would then be in
the position of being defrauded out OF
tt,p
commission would have been a party
to the action
Defines Action.
To this the chairman replied that
the action of the commission should
not be construed to mean it had put
an $3.50, 900 valuation on the property
and if investors purchased bonds with
that idea they would be doing so al
their own risk.
Chairman Duncan said emphatically
that the commission would not grant
an increase in natural gas rates: tha,
if the company could not pay the in
terest on the bonds and its operating
expenses at the present rates, the com
pany must go into the hands of a re
ceiver, because the commission viii
not permit the company to borrow
money to meet its interest obligations
Chairman Duncan made another i'm
portant ruling on the valuation ques
ton when he said the company would
not be allowed to put in it's artificial
gas plant as part of the valuation OF
the natural gas plant.
According to the inventory filed with
the commission the company has plac
ed valuation of $264.764 on the arti
fetal gas generating plant.