The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1931-12-15
NO RATE CUT,
CITY TOLD BY
WATER CHIEFS
Fight to U. S. Supreme
Court Against Slash Prom
ised by Utility Officials.
SULLIVAN SWINGS LASH
Public viii Get Its Rights,
Mayor Declares, in
Heated Statement.
BY DANIEL NJ. KIDNEY

First compromise meeting on In
dianapolis water rates resulted in
reduction of the size of the COM
promise committee.
Unless Indianapolis Water Com
pany officials undergo a complete
change of heart this is the only re-
duction that will come from the
compromise conferences, it APP
peal|d today.
At the first meeting in the Office
of Commissioner Harry K. Cuth-
bertson of the public service COM
mission Monday afternoon, H S.
Schutt, vice-president of the water
company, announced the utility'S
stand.
Boiled down from tho fifteen
page statement which Schutt read,
it is briefly this:
1--WE will fight to the United
States supreme court any rate
change resulting in reduced reve-
nues."
The United States supreme court
is in high favor with Indianapolis
Water Company officials. Under
the late Chief Justice Taft, the high
tribunal approved a $l9,000,000 val
uation for rate-making purposes as
of 1924. The court would approve
valution now of between $28,00O,-
900 and $4,000 900, officials contend.
Civic Leaders Present
Mayor Reginald H. Sullivan and
delegation of twelve representa-
tives of the city administration,
south side civic clubs and citizens at
large we're on hand to hear these
contentious and try to get rates cut.
Cuthbertson, long a lawyer before
becoming commissioner, pointed out
that the United States supreme
court had given the company
100000 more valuation than had
the public service commission.
Then Mayor Sullivan exploded
and issued an Isaiah-Iike prophecy
for utilities in general and the wa
ter company in particular. He
propheSied that some day the peo-
pies rights will be considered and
justice done, regardless of courts
and commissions.
Decision in the Indianapolis Wa
ter Company case, where the court
advanced the replacement new de-
preciated theory of valuation and
upheld a minimum of 7 per cent re-
turn, he compared with the famed
bred Scott decision.
Remedy With People
Twenty years after the bred
Scott decision, upholding the prop
erty right in Negro slaves, every
slave in America was free" Mayor
Sullivan declared. Through these
legal decisions, we have gotten
clear away from the original pur-
pose of the utility law, which was
to provide a fair return on a mo-
nopolistic enterprise.
In the water company case, 1
believe the record was erroneous.
Surely when they make a Is per
cent profit during the worst depres-
sion in history, the valuation is ex-
ceSsive.
But the people will not be i'm
posed upon forever. With them
lies the remedy"
After the session, the mayor ex-
planned that several avenues of
escape from high-handed utility
domination are open. Return of
control to the cities and public
ownership we're cited.
High Returns Cited
In opening statements of their
case for reduction, both the mayor
and Taylor E. Groninger, attorney
for the South Side Civic Clubs, cited
returns on common stock of the
water company as being u per cent
in 1926, 10 per cent in 1927, 20 per
cent in 1928, Is per cent in 1929,
and Is per cent in 1890.
Company officials explained that
these returns represented the pre-
viouS years business and that of
1890 included 1929 profits also.
UpShot Of two hours discussion
was the decision to meet again with
a smaller committee.
Cuthbertson said that, despite the
apparent deadlock at the first meet
ing, he believed something might be
accomplished. He urged a definite
program and offered commission ia
cilities in the fact finding.
Rates must be based on value and
operating costs and the return on
common stock does not count, he
agreed with Joseph Daniels, water
/ company attorney.
Another Meeting Thursday
The city and citizens committee
for future meetings is the mayor,
Groninger. A. H Moore, city engi-
neer, and Walter c. Rothermel,
South Side Clubs committee chair
man.
They will meet with Schutt, Dam
iels and Walter S. Morse, manager
Of the water company.
A similar compromise meeting
will be held Thursday at 10 a. m.
with indianapolis Power and Light
Company officials.
These meetings were suggested by
Cuthbertson after the city and
south size citizens filed rate reduc-
ton petitions with the commission.
PonetO Ind) Bank Closes