The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1927-12-29
BROKER SCORES
STOCK PLAN OF
CITY GAS FIRM
State cOpbmi8sioner Hears
Plea; ByIIesby Hand
SeeA in Move.

Reluctance bf the Citizens Gas
Company to entertain bid of Gavin
L. Payne &c CD, investment securi-
ties, on its cd ntemplated s1OOO,OO0
preferred stocA issue, was interpre-
ted today as "a continuation Of its
effort to remain beyond the control
OF H. M. Bylle$by 81 Co, large east
ern utility operators.
Gas company Officials we're subjected
to sharp criticism by Payne for not
having submitted the new stock issue
to competitive bidding when wit
nesses were heard before the public
service commission this morning.
Draws Sharp Rctorts
Payne, who has represented the
Byllesby company in previous eff
forts to acquire controlling inter
ests in the local utilitys common
stock, drew heated retorts from
Gustav A. Efroymson. gas company
treasurer, and Henry H Hornbrook,
director and counsel for the utility,
in taking the company to task for
its action.
No mention, however, Of the Byl-
lesby company was made in the dis
CUsSions.
Payne contended he had been ig-
nored in the bidding and declared
his firm would pay "at least par
for the issue, as compared with the
81 bid of the Union Trust Company,
and 96 by the Fletcher American
Company.
Payne produced certified checks
for $4,000 which he offered to post
as guarantee that if competitive
bids were received and opened in
the presence of bidders his firm
would bid at least par and divi-
dends.
Claims Good Faith Offer
Stating the position of the gas
company, Efroymson said: 1--WE tried
to find the best price we could get.
In good faith we have entered into
contract with the Union Trust
Company for the sale of this issue,
subject of course to the commits
sion's approval, and we would like
TO go through with it"
Commissioner Howell Ellis, in
charge of the hearing. reminded
Efroymson that such tacit agree
ment or contract would have no
bearing upon the commissions de-
cisiOn
John W. Hoffman, corporation
counsel. expressed his confidence in
gas officials and said he believes
they are working in the best in
terests of the company but that
Paynes higher offer for the stock
should be accepted, with commission
approval, for it would save the
company approximately 100000.
Board Backed Directors
Rumors that the gas company
directors had acted without the con-
sent of their board of trustees was
set at rest when LuciuS Swift, a
trustee, said the board was salts
fed with the directors action.
Ellis said at conclusion of the
hearing it is his desire to have the
matter decided las early as possible. y
Commissioners John w. McCardle
and Harvey Harmon sat with Ellis,
but took no part.
Ellis frequently found it neces-
sary to quiet outbursts between
Payne and Hornbrook.
The gas company is seeking au-
thority to issue $1,00O,000 (55 per
cent? preferred stock that would re-
place the outstanding issue bearing
7 per cent.
The utility asked per cent
margin for financing charges and il
was this feature that precipitatec
today's objections, because of the
evident merit of the securities
Payne's offer was indication thai
financlers believe the issue to bt
marketable at par or higher.
Costs of the company's refinancine
plan, it was said, would amount tt
approximately $1O2,500. Retirement
OF its present preferred stock at 6
call price of SOS share would cost
$4,000 and a per cent financing
margin on the new stock would ado
another $50, 500.