The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1931-12-17
Farley GIVES
HOPE FOR CUT
IN LIGHT RATE
Utility Chiefs Are Willing to
Confer Further on Re-
duction Request.
SULLIVAN POINTS WAY
Mayor Shows How 0perat-
ing Costs of Company
Can Be Sliced.
BY DANIEL M. KIDNEY

Indianapolis Power and Light
Company officials came into the first
rate reduction conference with city
officials and citizens today in a con-
ciliatory mood.
They didn't say yes; they didn't
say no; nor did they even say maybe
the rates will be reduced.
But they did agree to furnish all
data requested, and carry on fur
Their conversations, with the idea of
an exchange of viewpoint and hope
Of some settlement.
Earlier in the week, the Indian
apoliS Water Company officials at
tended a similar conference and a
flfteen-page statement of their po-
Sition was read, which meant,
nothing doing for reduced rates"
They also agreed to hold further
meetings, however.
Sullivan States Position
These conferences, arranged by
Commissioner Harry K. Cuthbert-
son of the public service commits
sion, are being held in his Office at
the statehouse.
Cuthbertson suggested trying the
conference plan of compromise
after the city administration,
south side civic clubs and groups
of interested citizens filed petitions
for electric and water rate reduc-
tions.
Mayor Reginald H. Sullivan stated
the position of petitioners at the
opening of the session with the
light company this morning.
He pointed out that all other
commodities have come down in
cost to the consumer, but light
rates remain at the peak of pros
perity years.
Shows Ways to Reduce
He then pointed out four possible
points for cutting operating ex-
penses of the company.
Coal is being purchased by the
company through subsidiary COM
pany at cost of 100000 above the
market price in 1880, the mayor
said.
Another $35O000 was expended
for purchase of current above that
which it would have cost the COM
pany to manufacture it.
Salaries of officials now are STA
$40, while in 1927, before the merger,
the two electric companies paid but
$57,940 in officers salaries.
Average cost per customer in gen.
eral expense in 1880 was 1914, while
before the merger it was but $2.96.
Made Up by Rate Payers
A 100000 loss was recorded for
the merchandising business of the
company between 1927 and 1880.
This had to be made up by the rate
payers.
Mayor Sullivan also contended
that the book value of the two COM
panies was approximately $780,
1863 80 and, in the absence of an ap-
praisal of plant or equipment, it was
boosted to $4O,0OO,OOO by the merger.
This resulted in an increase of ST.
1915 above the book value of the
combined properties, he pointed out.
Following the merger, authority
was given to issue 100000 shares Of
no par value common stock to rep
resent an equity o. $1,060,000, the
mayor asserted.
High Dividends Paid
On this stock dividends of Is per
cent in 1927, So per cent in 1928,
48 per cent in 1929 and so per cent
in 1880 have been paid, he said.
ITO pay this so per cent dividend
in 1880, it was necessary to draw
On the surplus the sum of $780,
343.47," Mayor Sullivan concluded.
These enormous dividends on
common stock were paid after meet
ing all operating expenses, taxes,
depreciation, interest on outstand-
ing bonds and dividends on pre-
ferred stock"
President C. L. Harrod of the
company replied to these charges by
declaring that the mayor and Pc
titioners didn't get the proper pic
ture."
Harrod to Give Figures
He will paint for them at future
meetings, first of which was sched-
uled for next Tuesday, when it was
agreed they will discuss the price
Of coal.
A lease prevents abandoning the
business at Daylight Corner" be-
fore May, 1888, and the company
must purchase current from insult
under a contract made in 1925 for
a ten-year period, Harrod explained.
He also contended that the hold
ing company method of coal pur-
chase is a necessary protection on
supply, and that over a ten-year
period the cost will be below an