The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1927-09-26
TRACTION BID
FOR BUS Line
FACES COURT
Street Railway Attorneys
Seek Approval of Sale
For $500, 900.

Approval Of the purchase of the
Peoples Motor Coach Company by
the Indianapolis Street Railway Co.,
for 100000 and assumption of $92,-
900 Indebtedness was being sought
by traction attorneys in Marion
Circuit Court today.
1t was the first appeal from a
public service ruling to be heard in
the courts, as provided by an act of
the 1927 Legislature.
The deal failed of contamination
last spring when the commission re-
fused the street railways petition
to purchase the capital stock Of the
bus company for a half million dol
lars, assumption of the Indebtedness
and issuance of 100000 notes to
bear 8 per cent interest. The re-
fusal, based on the finding that the
price was unreasonable, was virtual
ly reiterated when the commission
denied a rehearing.
Commission Not Represented
A formidable array of street car
attorneys, headed by Dave E. Wat
son, carried their appeal to Circuit
Judge Harry o. Chamberlain. AL
though the calendar listed ATTORNEY
General Arthur L. Gilliom as "de-
PENDANTS counsel" neither Gilliom
nor any of his deputies were on
hand. The attorney general ex-
planned that the 1927 act under
which the action is brought does
not make the commission a party
to it.
In giving resume of the case
to the court Watson said the evil
dence would show the purchase
should be permitted because the
price Of 100000 is not unreaSon-
ablee and single operation Of the
two companies would improve serv-
ice to the public. He contended the
plan would enable the street car
company to reduce its annual deficit
and show fair profit.
Watson found fault with the COM
missions edict on the grounds that
the commission had placed too
much Importance upon the fact that
the tangible property of the bus
company Is estimated at only from
$3.50, 900 to $3.50 900. He said $358,OoO
actually had been invested in the
bus lines and that the value Of the
capital stock, considering it's earn
ing capacity, was 100000.
Assails Depreciation Value
He likewise found fault with the
commissions having figured the bus
company's annual depreciation as
80 per cent, which reduced the COM
missions figures of its 1926 earn
ings to $15,500, instead Of some
$4,000 as they would have been
on a is per cent depreciation charge.
Annual savings under single opera
ton would amount to about $197, 900
annually, Watson argued.
Frank D. Stalnaker, president In
diana National Bank, witness, was
guarded in estimating the fairness
OF the terms of the proposed deal.
He thought 8 per cent to be paid
ON the bond issue too high, but be-
lleyed the purchase would be for
the betterment of service and elm
mate unwarranted duplication of
service on some lines.
Albert E.. Metzger, vice president
Fletcher Savings and Trust Com
pany, thought the terms of the pro-
posed sale were fair.
Fares Too High
City Corporation Counsel, Schuyl-
er Haas, said the city wanted tie
deal to go through and did not
think 100000 was an unreasonable
price; but that if "the bus COM
pany was able to build up $780,
900 business from $4,000 In two
years there should have been some
reduction in fares"
Judge Chamberlin characterized
as peculiar" and Of doubtful
practicability" the 1927 act under
which the action was brought. 1t
provides that appeal from public
service commission rulings may be
carried to the circuit court. If the
court upholds the order, appeal may
be carried to the State supreme
court. If the court reyerses the
finding Of the commission, it must
notify the commission of its action
and give the commission opportunity
to change its ruling. If the com
mission refuses to weaken, the court
may, If 1t chooses, go ahead and
grant the appeal, authorizing the
transaction.