The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1927-01-12
GAS CHARGE
CUT AIDED
BY CHARTER
Citizens Company Forced to
Action by Pledge in
Original Charter.
RETURN TO CITY, PLAN
Past Few Years Prosperous
for Firm.

Unless the Citizens Gas Company
reduces its rate, or expends its
present earnings In extensions and
refrains from further large dividends
on it's certificates, it soon will auto
matically wipe out the value of it's
certificates under it's pledge to return
The property to the city when certifi-
cate holders shall have received the
face value of their investment and
10 per cent interest.
Only per cent more in dividends
must be paid to bring the total
dividend payments up to the
promised return of 10 per cent a
year. In 1925, 13 per cent was paid
above the regular 10 per cent.
Purchase Provided
The original incorporation COM
pany provided for a method by
which the plant should eventually
become the property of the city of
Indianapolis.
One of the provisions on file in
the office of the secretary of State
reads:
when said certificate holder shall
have received by dividends or other
wise upon said certificates an
amount equal to the face value
thereof together with interest there
on at the rate of 10 per cent per an
mum payable semi-annually, then
said certificates issued to said sub
scribers shall be deemed fully paid
and Cancelled and it shall be the
duty of the trustees and directors of
said company to convey said gas
plant and all property belonging to
said company to said city Qndian-
apolis) to be owned and operated or
leased by it, and all the rights, title
and interest of said company or its
certificate holders, stockholders, of.
ficers, directors or trustees shall be
deemed to be fully paid and extin-
guished."
In 1923 the above article was
amended adding preferred stock to
the membranes to be taken care of
before the property is turned over to
the city.
IS Prosperous Recently
Under this provision, attorneys
have declared that by payment, at
any time, of the face value of the
certificates, which represent the COM
mon stock ownership of $4,000, 900,
the city could acquire the property
of the plant by assuming or other.
wise providing for the bonded in
debtedness and the investments in
preferred stock.
For a number of years the COM
pany did not eaI enough profits to
Fay the necessary 10 per cent return
after caring for the interest on its
funded indebtedness.
The past few years have been
prosperous ones, and the report for
1925, which soon is to be filed with
the public service commission, is ex.
pected to show as high earnings as
were made in 1925, when 23 per cent
was paid on the certificates.
The gas company stands in a DIFF.
ferent relationship to the city than
other utilities in that it has a def.
AiANS piNNAoiOi AOl iIluillClpdl OWIltI-
shop written into its charter.
Cut Demanded
1t Is for this reason that attorneys
investigating the conditions Of the
gas company have declared that
there should be an immediate reduc.
ton of rates or some effort made to
meet the conditions under which the
original franchise was granted. The
franchise was surrendered when the
public service commission was Gre
ated.
The rates at present are based on
a valuation of $4,000. 900. reached
after a controversy in Federal Court.
'rhe assets as filed with the commits
sion total about $11, 100000.
Because the language of Article
10 is somewhat ambiguous, persons
interested in the gas company
sought opinions of two of the city's
leading law firms. Both delivered
opinions that the agreement is bind.
ing and that the city must pay the
face value of the common and pre-.
ferred stock and assume indebted.
ness in order to take over the com.
pany when common stock dividends
have edualled 100 per cent.