The Oskaloosa herald. (Oskaloosa, Mahaska County, Iowa) 1885-1919, 1917-08-02
RATES ON UTILITIES
REASONS ser FORTH BY COM.
PANY FOR iN3UNcTioN

II
topic of discussion today among tas
payers and citizens upon learning o.
the temporary restraining order ISSUED
against the city council and the pur
pose of the gas and electric companies
to apply for an injunction to restrain
the city from putting in effect the pro
posed new gas and electric rates, Hear
ing upon application for temporary
injunction will be held in Des Moines
before Judge M. ]. Wade, who granted
1.-THE temporary restraining order, next
Saturday morning at 10 o'clock Hear
ing on the permanent injunction will
be held in Ottumwa, Aug. II.
Officials of the local gas and cleo
trio company declare that this is the
Isecond time in the history of the Him
OILS Traction System, the parent com
pany which operates in the neighbor-
hood of forty local utility properties.
that litigation against a municipality
has been resorted to- They declare they
have been willing to arrive at some
compromise with the councilmen but
that they decided that TINS course was
useless, particularly after the ordi-
nance reducing gas and electric rates
had been passed. These proposed rates
the company declares, are not only
confiscatory, but also unreasonable,
unconscionable and oppressive
| . Cut Takes All Profits.
In its prayer for relief the Oskaloosa
& Buxton Electric Railway, which
owns the stock and leases to the Os-
kaloosa Traction & Light Company,
states that in 1916 gross earnings from
the sale of electric light, power, hot
water and steam was 1852, 1851. Oper-,
ating expenses and maintenance
amounted to i$97. 404.62, exclusive of
taxes. Net earnings, after paying taxes
were S4S.s75.41 or less than 10 per
cent on 4 replacement valuation of
the property set by the company at
$500, 100000.
BY applying the proposed new rates
to the business done in 1916 the COM
pany shows that the net earnings
would be reduced to approximately
$25. 900 out of which it would be com
PEELED to pay $4,000 depreciation al
lowance, leaving an actual net of but
$4,000, 900. -ne company states that it
has issued an outstanding more than
$2U0, 100000 in first mortgages and $780,
900 in general refunding mortgages
bearing interest at 5 per cent and by
application of the new rates in 1916
there would have remained one-half
sufficient amount to pay interest on
its bonded Indebtedness and nothing |
to pay return as profit
The company further calls attention
to the fact that it has from time tol
time made reductions in its electric
light and power rates; also mat it fur
nishes a large amount of current and
heat, even more than is provided for
by franchise, to the city without
charge.
Coal Cost Hits Gas Company.
In its plea for relief the Oskaloosa !
Light and Fuel Company, the Gas Com
pany, protesting against the new gas
rates, alleges that 1t finds itself in ev.
en- a sorrier plight than the electric /
company. The high cost of coal, coke,
and oil, which enter largely into the
manufacture of gas, has hit the COM
pany hard. 1t sets forth that in the
year 1916 the cost of manufacture was
so great that, after reasonable allow :,
ance for current depreciation, there
was left insufficient earnings to pay
interest on the bonded Indebtedness or
upon the investment. The company
also shows that by reason of steadily
increased cost of materials the cost OF
making gas for the year 1917 will show
a material increase over its cost in
1916. 49,.
The company also calls attention to
it's original ordinance granted by the
city of Oskaloosa permitting 1t to
charge $3.50 per thousand cubic feet,
which it has not taken advantage OF,
having maintained a rate of $3.50 per
900 cubic feet, with discounts from
10 to % cents, or an average of about
|$1.35 per 1000 feet paid by its custo-
mers during the past year. 1t also stat.
es that it has always paid interest on
bonds but has never paid and divi-
dends on it's capital stock. The COM
pany also further refers to the fact
that an ordinance passed by the city
council in 1913 attempting to regulate
the price of gas was enjoined by Hon.
Smith Mcpherson, of the United Stat
es Circuit Court. and that prior to the
hearing on the injunction the city, OF
Oskaloosa passed an ordinance re-
pealing the former ordinance and the
action was dismissed. s.slr
Yearly Profit of 20 Cents.
/ The company. by way of illustrating
what the proposed new gas rates
would mean, states that in 1916 Its
gross earnings were $25.0S7.o- with a
met return of S7,001.23 and that by ap.
plying the proposed new rates to the
1916 business of the company its gross
earnings would have been cut to $lS.-
086.32, leaving profit of only % cents
- H.. 49,