The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-01-10
COAL RACKET
ISCHARGED TO
CITY LIGHT co.
Paying so Cents Ton More
Than Market Price,
Is Claim.
CONTRACT IS REVEALED
Holding Firm Grab Hint
Is Dropped by PrOberS
in Case.
RY BASIL GALLAGHER
Times stan Writer

BY BASIL GALLAGHER
Times stan Writer
The indianapolis Power and Light
Company is alleged to be paying 90
cents a ton for coal in excess OF the
market price, investigators charged
today.
Tie coal. it was learned, is bought
by the light company through a
subsidiary organization of the Utlli-
ties Power and Light Corporation
of Chicago.
A ten-year contract, The Times
learned, exists between the local
utility and the United Galleries
Company, Inc, the aforementioned
subsidiary.
Sherman Minton, public counselor
before the public service commits
sion, told The Times that he found
a similar coal situation in the re-
cent hearings which were conducted
on the light rates of the Public
Service Company of Indiana.
Paid S2.O5 a Ton
During this case now awaiting a
ruling by the commission it was re-
vealed that the utility which serves
several hundred towns in the south
ern section of the state paid sos
for coal from a mine operated by
the company.
r. Hartley Sherwood coal author
ity of Indianapolis, testified that
coal was selling on the market in
1929 for S1.79 a ton for mine run
and $1.13 a ton for screenings" In
1882 according to Mr.. Sherwood,
mine run coal sold on the market
for $1.20 a ton and screenings"
for 81.
Utility experts assert that this is
another instance" of the, alleged
peculiar and complicated business
procedures which have led to the
issuance of an order by the public
service commission to show cause,
Feb. l, why electric rates in Indi-
annapolis should not be reduced.
Incorporated for Profit
Corporation records in the Office
of the secretary of state reveal that
the United Galleries Company, Inc,
was incorporated under the laws of
Delaware as a corporation incor-
porated for profit"
The main Office of the company
is located at 327 South La Sale
street, Chicago, which also is the
address of the Utilities Power and
Light Corporation, holding company
of the indianapolis Power and
Light Company.
Engineers interviewed on the sub
iect Of fuel for the operation of the
indianapolis Power and Light Com
pany assert that the company can
use a good grade of screenings" to
advantage. All coal above screen
ings" in size, they point out, must
go through crusherS to reduce it to
screening size.
Experts Give Opinions
An investigation by The Times
diScloses that high-grade fourth and
fifth screenings" have been offered
on bids to large buyers at from 70
to 80 cents a ton. Mine run coal,
fourth and fifth vein, has been
offered at S1.10 to $1.25 a ton at the
mine. No. shaft screenings
have been offered at from 65 cents
a ton up, it was learned.
Assuming that the indianapolis
Power and Light Company had a
free hand in the purchase of coal
unhampered by the influence of the
holding company, experts on the
coal situation say the firm could
buy half of its tonnage in high
grade screenings and half in a
similar quality of mine run"
This method. according to experts,
would average the cost of the coal
purchased to about 81 ton at the
mine. On this basis the Indianap-
oils Power and Light Company could
have saved a sum considerably more
than million dollars during the last
five years and eleven months.
Affects Rate, Is Claim
Had such a saving been effected
and listed in the reports of the
light company to the public service
commission it should have had con-
siderable effect in bringing down
the present high electric rates in
indianapolis, utility experts assert.
But this, of course, would not have
been to the advantage of the United
Collieries COMPANY, Inc, the Utili-
ties Power and Light Corporation,
nor any of the other subsidiaries of
the big Chicago utility enterprise, it
is charged.
Taking two years of the SiX-year
operation Of the indianapolis Power
and Light Company as an example,
the following records of the coal
bought at the mine, the tonnage and
the total cost are taken from re-
ports of the light company to the
pubic service commission:
For the period ended December,
1929. for example, the indianapolis
Power and Light Company bought
505,l7S tons of coal. Price at the
mine averaged s1.307S a ton, max
ing a total of S658.911.
Alleged Excess Computed
In 1882 the light company pur-
chased 328,40l tons at 81 1852 a ton,
making a total of S438.S24
An accountant for The Times has
computed that an alleged excess
charge Of s252.5S6. figuring the coal
at so cents a ton, was made in 1929
An excess charge of Sl97,041 at so
cents a ton was made in 1882. it is