The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-05-04
TWO BIDS ARE
MADE TOC|TY
ON GAS BONDS
Firm Reputed to Be Allied
With Cyrus Eaton Puts
in One offer.

Two bonaf1de bids on the $8,OO0,-
900 issue of revenue bonds with
which the city intends to acquire
the Citizens Gas Co. were received
at City Hall today.
One bid was rendered by Otis &
Co., Cleveland institution with
which Cyrus S. Eaton is reputed to
be connected, and the other was a
joint offer by G. w. McNear g. Co.
and A. G. Allyn & Co., Chicago
houses.
When the bids were opened at
noon, officials of the City Utility
District, Mayor John w. Kern and
Walter G. Boetcher, city controller,
went into executive session to study
the offers.
In addition to these two tenders,
which were accompanied by checks,
there were three other propositions
made in regard to the disposal of
the bonds. AS these propositions
were not accompanied by any
checks no action was taken on them.
Rate Cut Unlikely, Kern Hints
Prior to the opening of bids,
Mayor Kern, in a statement Clarity
ing the citys position in the trans
action, declared that while the &C
QUESTION does not anticipate lower
rates to gas consumers it is expected
to make possible the introduction of
natural gas into Indianapolis.
"a great many years ago." Mayor
Kern stated, "a movement was
started in Indianapolis looking to-
ward municipal ownership of a gas
company, and this finally culmin-
ated in 1905 in the formation of the
Citizens Gas Co. under a trust
agreement whereby the city was
given a beneficial interest in its
property, and would have the COM
plete legal title after a number OF
years, and upon the retirement OF
the stocks and bonds representing
the monies invested by private
capital
Under this agreement, as con-
strued in recent years by the Fed
eral Circuit Court of Appeals, and
recognized by the Supreme Court
of Indiana, the city stands in the
position of a trustee with reference
to the gas consumers of Indianap-
oils, for the purpose of providing
them with gas at cost, and the
directors of the Utility City, rep
reSenting the city in this trustee
capacity, are under not only a
moral, but also very real legal
obligation, to carry into effect, if
at all possible, the charitable trust
in the Citizens Gas Co. property as
construed by the courts, and any
lack of diligence on their part would
expose not only them but the city
to grave criticism and legal action.
Lower Rates Not Anticipated
"It is not anticipated that the mere
acquisition of the property by the
city will result in lower rates to con-
sumers but it is anticipated that the
acquisition will make possible the
introduction of natural gas through
municipally-ow distributing
system, which, it is hoped, will mean
that the consumers, and not any
private capitalists, will have all the
advantages of this cheaper and bet
ter fuel, safeguarding themselves
against exorbitant rates of natural
gas companies, and against the pos
sible depletion of the natural gas
supply, by maintaining the equip
ment ready for the manufacture OF
artificial gas.
while no definite and immediate
benefits may result to the consumer
by this acquisition, with the excep-
ton of the hopes and anticipations
referred to, it should be borne in
mind as a most important consider
alton what might be the result to
local consumers if the city should
fail to carry out this trust.
The first result would be that
the entire property would revert
free from the equity of the city
to private ownership; the next re-
suit would be that the city would
not be in a position to resist the
introduction of natural gas by pri-
vate concerns, which, under the
present laws, would not be subject
to the usual regulations of public
utilities, and the ultimate result
would be that the supplying of gas,
whether artificial or natural, would
be not only in the hands of pri-
yEtely owned utilities, but also
probably in the hands of the natu-
raj gas trust, now the subject of
Senate investigation, and the po-
tential savings to consumers to be
made possible by the introduction
of natural gas would be diverted
to the profits Of the privately owned
utilities"