The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-11-19
Trends
Municipal Direction
of Public Utility
Advanced Here.
BY VINCENT ;. LYONS
lines Financial Editor


1HAYOR-ELECT JOHN W.
wi KERN'S visit last week 20
washington 20 discuss. among
other matters. the proposal 70 have
the ritv take over the properties
Of tho Citizens Gas Company IS
one more evidence OF the national
trend toward municipal ownership
q public utility properties.
Like 4 beacon-ught the Tennes-
see valley authority project stands
out 10 the progress made along
these lines The sharp slashcs
which have been made in utility
rates in that area since the en-
trance Of the government upon the
scene undoubtedly has furthered
the agitation for the extension Of
the program 70 other municipal
ties throughout the country.
The city Of indianapolis is one
step ahead 81 many other COM
mlnities. Tor when the franchise
was granted 20 the Citizens Gas
COMPANY a clause was inteTpOlated
IN the contract. known as the
charitable trust agreement, which
permits the city 70 assume title 20
the c0mpanys property by giving
% stockholders OF the private en-
terprise the price paid for their
stock. plus accrued dividends.
TN other munlCl1 allties scattered
Il thr0uChOut the country no such
clauses or agreements are in exist
cnce with the result that when city
authorities contemplate entering
the public utility business. the final
say rests with the electorate. The
voters can decide whether they
want municipal ownership or pri-
waite ownership Of public utilities.
In the recent election several
such projects in widely scattered
regions Of the nation were put IN
the hands Of the people. Memphis,
Tenn. Overwhelmingly decided 70
issue bonds for the erection Of a
municipal distribution plant. Van
Couver. Wash, frOWned on a sim
liar plan. Sacramento CCaJ vOt-
crs approved a Sl200000O bond
scheme 70 erect a power plant TO
compete with a private company.
s.. Cloud. MINI. and Creston, Ia,
voted against municipal purchase
Of a power plant and waterworks,
respectively.
Indianapolis impediment 10 mu-
niciPal ownership Of public utility
services has been financing. The
contract between the city and the
Citizens Gas Company provided
the handy vehicle with which the
community could enter the bust
ness. but the manner in which the
transfer could be completed was
the barrier.
ID ECENT conferences Of Mavor
N Sullivan and county commits
si0ners with the Users Gas Com
panv on the latter's petition for an
exclusive gas franchise have been
somewhat productive. The mayor.
along with other city officers. in
vited the company TO submit a
proposal for financing the City'S
acquisition Of the Citizens Gas
Company. This invitation was
extended after the attorney for the
Users Gas Company declared that
his company was willing 10 finance
the transaction.
incidentally. Mayor Sullivan pre-
sented some strong arguments
against granting a franchise to the
new enterprise. II the county COM
misSioners act favOrably on the
petition. both the city and Marion
county viii forfeit valuable rights
and enable a private company TO
reap the benefits. he said.
Pointing out that it is his under
standing that the city. when. as
and II It takes over the Citizens
Gas Company. will have the right
to serve gas to residents of the
county within a five-mlle radius Of
the city limits. Mayor Sullivan de-
clareS that this privileges would be
abrOgated If the county commits
siouers we're 10 grant the new
franchise.
FURTHERMORE, the mayor
II AYERS that II the Users company
were 10 obtain the franchise. Indi-
annapolis would have 10 purchase
its natural gas from that company.
no matter whether its price was
cheapest or not and the citizens
would have 10 pay the added cost.
Taking a lOng-term outlook. Mr..
Sullivan further contends that in
the event the city should extend
rs limits a conflict would enSue as
two utilities would be serving gas
within the city hmitS-a private
corporation and a publicly owned
utility.
T. seems that in view Of the fact
that indianapolis is giving serious
thought 70 the idea OF municipal
ownership Of a public utility. the
entire scheme can not be placed in
jeopardy az the outset by calmly
pushing aside the mayors set Of
logical objections. Hearings on the