The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1931-05-19
CITY SPEEDS
PLAN TO TAKE
OVER UTILITY
Mayor to Call Conference
for Acquisition of Gas
Company.
FACE FINANCE PROBLEM
Entry of Natural Product
Into Field Also Raises
Difficulties.

Difficulties.
Citizens Of Indianapolis today
prepared to become the owners OF
their first utility-the Citizens Gas
Company. Last legal barrier to-
ward acquisition of the company
was removed by a United States SUI
preme court decision late Monday.
Two problems, however, confront
ed the city administration: How
to finance the transfer of the COM
pany and what disposition should
be made to meet the problem pre-
sented by the arrival Of natural gas
in Indianapolis.
These problems will be the sub
1ect Of a conference to be held in
Mayor Reginald H. Sulliyans Of
flee at Wednesday afternoon. Di-
rectors and trustees Of the city's
utility district will attend the con-
ference.
The supreme court Monday re-
fused to grant a review Of the fed
eral court decision unfolding the
city's claim to take over the COM
panys property under the 1905
charter
VIII Rush Action
Every effort will be made to rush
the necessary acquisition steps,
. Mayor Sullivan said, although the
many problems of financing pro-
cedure to be solved probably will
delay actual title transfer for six
months or more.
Before the transfer can be con-
summated, the city must arrange to
retire common and preferred stock
and first mortgage bonds against
the company, amounting to more
than $6,400,O00. Value of the Citi-
zens Gas Company has been esti-
mated at from $10000,000 to $15,-
100000.
At present, two methods of A.
nancing the acquisition are being
considered: one, that the city float
q bond issue to cover the outstand-
ing stock, and the other that the
gas company take a second mort
gage to meet the face value of the
stock.
Operation Provided For
The company will be operated
under the city utility district
authorized in the 1929 legislature for
the express purpose of operating the
utility.
City utility district trustees are
Thomas G. Howe, Sterling R. Holt,
George j. Marriott, A. D. Hitz and
w. j. Mooney. Directors are Henry
L. Dithmer, Brodehurst Elsey, Ed
ward A. Kahn, Eli Lilly, Almus G.
Ruddell and Guy A. Wainwright.
Gas company trustees are Thorn
as l.. Sullivan, the mayors father;
Henry Kahn, c.. A. Schnull, Otto
Lieber and Frank c. Daley Direct
ors are James 1. Dissette, G. A.
Efroynnson, Edgar H. Evans, j. H.
Hooker, H. H. Hornbrook, w. H.
1nsley, G. L. Kirk, Franklin Vonne-
gut and John R. WEIGH.
Details Of the acquisition prob
ably will delay decision on introduce
ton of natural gas in the city until
the city acquires title to the Citizens
company.
Natural Gas Rights Sought
AT least two companies are pre-
pared to bid on supplying natural
gas to the Citizens company, to be
mixed with artificial gas to be dis
pensed to local consumers.
One of these, the Kentucky
Natural Gas Company. has contracts
with twenty-six local industries for
supplying natural gas and has
petitioned the city for right to lay
gas mains to these plants.
A campaign against the use Of
natural gas here on the basis that
its lower cost would reduce the use
of coal and thus add to unemploy-
ment among Indiana coal miners,
has been started by local union rep
resentatives.
In the franchise granted the
Citizens Gas Company in 1905, it
was agreed that within twenty-five
years the city might acquire the
company. stock after it had been
retired and stockholders had re-
ceived a certain income on the stock
they held.
Claim City Lost Right
In 1929 the city began steps to
take over the property and two
federal court suits contesting the
citys claim to the company were
fled by Newton Todd and John j.
Cetter. stock certificate holders.
They claimed that when the city
permitted the gas company to sur
render its franchise to the public
service commission in return for an
indeterminate permit. the city lost
Its right to acquire the firm.
The city'S claim was upheld by
Federal Judge Robert c. Baltzell and
on appeal the decision was sus-
tanned by the United States circuit
court Of appeals.
The supreme court was asked to
review the case. but removed all
barriers when it denied the request.