The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1916-09-16

This property constitutes the pro-
duclng or generating system for the
production of artificial gas
The history of the petitioner is set
forth in the petition, as herein men
toned, and is not controverted by the
City. We assume the historical state
ment to be true. Natural gas, prior to
1910, seriously affected the revenues
OF the Company. For the twenty-five
years ending December 81, 1914, the
Company earned a gross income of
$306.736.22. This would be an aver
age annual earning of less than per
cent on s250,O00.0O. However, from
1899, to 1909, the highest annual in
come above operating expenses, in
any one year was s7,659S6, or but
per cent on about s125,OoOoO. For the
eleven years last above mentioned the
revenue above operating expenses. ag-
gregated but s50.032.S7. This would be
an average annual revenue for that
period Of $4,54S.44, or a return of
per cent per annum on about $4,000
90. Following the purchase of the nat
ural gas competitor in 1910, the earn
ings rapidly increased. The four
years following, 1910 to 1913, show an
earning of $170,S12.75, or an average
annual return of $42.7031S, above
operating expense. This abnormal
earning for four years was far above
a fair return on the value of the prop
cray used and usefor the convenience
of the public. While the total return
for the twenty-five years was $306732.-
%, and was not far below what it
should have been. it will be noted that
$170812.75, of that $306,732.22, was
earned in the four years period fol-
lowing the taking over by the petition
er Of its natural gas competitor in
1910. For the year ending December
81, 1913, the earnings above operating
expenses were but $1,5S6.30, or a re-
turn of about s per cent on an invest
ment of about 100000 For the fol-
lowing year the return was $10,5S570
Assuming Mr.. Taylors valuation of
about s3OO,OOO00, to be correct, and
allowing but 2 per cent for deprecia.
ton, the result shows a net balance
of $4,5S570, available for returns on
the investment. This would be but
~ per cent return, on a valuation of
s3O0OO000 This rate of return is
confiscatory, and if continued, must re-
sui III d refusal vi INVESTORS 10 put
more money into this utility The
rights of the people are not affected
by over capitalization, unless it reach
es point where the fixed charges are
such as to break down the service
The capitalization is given but little
consideration in determining the fair
value of the property.
Natural gas has been a continual
menace and destructive competitor
of this property, from 1899 to this date.
except for the years, 1910, 1911. 1912
and 1913. When natural gas had, as
witness says, again knocked at the
city's gates, there was nothing to do
but bid it enter. How long it will re-
main is not capable of definite deter.
mination. When it was found in In.
diana in abundance, our people be-
lieved the supply was both constant
and unfailing. It's subsequent behavior
defied scientific demonstrations. 1t
vanished as it came, literally unherald-
ed and unannounced The West Vir-
ginia supply is being no doubt more
intelligently husbanded. Yet, no man
can forecast the time of its duration.
Those who have money invested In
a utility ought not to be required to
carry the entire hazard of an invest
ment. that from time to time may be-
impaired as science unlocks the store
house of nature. If this plant had been
owned by the municipality the pub
lies investment would have suffered
the same distress as has the invest
ment of the private citizens in this
utility. II 1t had been built with the
proceeds Of the sale OF bonds, the
bonds would have been there and the
city's credit would have been behind
them.
In any event. whether this reason
ing be correct or otherwise, we are not
disposed to throw all the loss arising