The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1931-10-02
ruling PAvES
| WAY TO SLASH
UTILITY RATES
Commissions Decision in
VincenneS Water Case
Is Revolutionary.
BOON FOR CONSUMERS
5 Per Cent Return Is Held
Fair, Instead of Old
7 Per Cent Profit.
BOON FOR CONSUMER

VI ONttA WIZ
Public service commissioners
themselves today paved the way fol
relief from excessive utilities rates
in Indianapolis and elsewhere
throughout the state.
BY a vote of three to two they
adopted an order reducing rates OF
the Vincennes Water Company ano
establishing new principles of rate
making, the most revolutionary or
der in commission history.
Here are some of the points de-
veloped that will mean salvation
for the consumer:
That valuations set by courts in
the last have no effect under pres
ent-day economic changes and fall
ing price levels of both labor ano
materials.
5 Per Cent Return Set
That the United States supreme
court decision setting per cent as
a fair return is unfair today and
a guaranteed return of 5 per cent
now is just and ample.
That utility owners no longer can
declare low valuation for taxation
and triple it for rate making.
All these points have been stressed
for months by The Times.
Today's order was written by
Co11a cci IN on. IIoxYyafI T1II;r o1oS 49,.
Cured in by commissioners Frank
Singleton and Harry K. Cuthhert-
son.
Chairman John W. McCardle and
Commissioner Jere West dissented.
West spent more than thirty years
as a circuit court judge before be-
ing appointed commissioner by
Governor Harry G. Leslie.
Denies Rate Boost
The vincennes order is double
barreled. 1t upholds petition OF
the city for reduced rates and de-
MES an increase petition filed by
the company. It sets a valuation
of 100000 on the property, based
on audit of commission engineers
and accountants made in January
of this year.
Turning down the idea advanced
by ]. Clyde Jones, company attor-
ney, that the commission never
could go back of the 81 ,032, 900 valu-
alton given the company in the fed
eral court of appeals in 1928, the
order sets out:
mo court perpetually can enjoin
the public service commission from
operating its legislative functions in
matters of this kind"
The company had sought ST.
100000 valuation, based on alleged
improvements and betterments made
since the court valuation was set.
Old AppraisaIs VaIueIess
Citing present price trends, the
order pointed out that appraisals
made by Stone and Webster in 1928
are valueleSs now.
THE Stone and Webster appraisal
of May l, 1923, reflects no present
day conditions and is entitled to
little weight dn determining fair
value now" the order states.
1t points to the testimony of
bankers and other investment
authorities to show that a guaran-
teed 5 per cent return is first rate
at the present time and as Just as
Z per cent several years ago. The Z
per cent idea was injected in a
United States supreme court deci-
sion in 1929.
Dealing with the matter of low
tax values and high rate values. the
order charges that company officials
have played DR.. Jekyll and Mr..
Hyde with the state tax board and
the public service commission"
Difference Is Remarkable"
1t points out that Benjamin Park,
an official of the company, testified
before the state tax board on March
l, 1881, that the valuation of the
property was $516,400. To this Ellis
added $68,60O in local assessments
at Vincennes, making total for
tax purposes of $685., 900.
He then shows that on June 4,
1881, George H. Alexander, vice
president and general manager of
the company, Swore that the valua-
ton was $1,517810 at a rate hearing
before the public service commits
sion.
This difference the Ellis order
terms indeed remarkable"
He also criticised Alexander for
being an official and owning one
third of the stock and then appear
ing as an unbiased expert on ap-
praisal when he is not even a
licensed engineer.
Under the new rates, Vincennes
citizens will procure 500 cubic feet
a month minimum of water for
$3.50, while previously it was $3.50
for 400 cubic feet.
Fire protection for the CITY will be
S72 a year hydrant, instead of
S99, which was the highest hydrant
rate for any fourth-clasS city in the
state.
HatAAam- 800 49,