The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-03-13
HUGE PROFITS
NOT COAL OF
GAS FOUNDERS
Firm Was to Allocate Its
Surplus to Retire Com
mon Stock.
Continued From Page One)

fL00Ll0ueQ EIOu1 6SC OhCJ
should be placed in the hands OF
five trustees who should be stock
holders resident in the city. These
trustees are to hold the stock and
vote it and annually elect nine
directors. Any trustee who be-
came an employee or holder Of the
securities of competing company
or who moved out of the city au-
tomatically would be disqualified as
a trustee.
Stock to Be Retired
Disposition of the earnings, I'M
der the terms of this agreement,
was to be as follows: /. Payment
of matured debts and operating ex-
penses; 2. Payment in semi-annual
installments of the 10 per cent divi-
dend and all accrued dividends, and
3. Payment for extensions and bet
terments ordered by the Board of
Works, the excess to be applied to
the payment in whole or in part Of
the amounts subscribed for stock.
This would seem clearly to es-
tablish the point that the company
was not to accumulate any surplus
as such, but was to allocate all
earnings after matured debts, OPP
Grating expenses, dividends and eX-
tensions and betterments to the re-
tirement of the common stock in
WHOLE OR IN PART.
The United Supreme Court, about
this time, decided that the city sue
ceeded to the rights under the
franchise with the Consumers Gas
Trust Co. and for a small conSid-
Grafton the city assigned and trans
ferred to the new organization the
franchise and its option to pur-
chase the property of the Consumers
Gas Trust Co.
10000 Shares Sold
The embryonic Citizens Gas Co.
thereby acquired the property of the
defunct enterprise, chiefly its dis
tributing lines, for S406,0O0. With
this as the nucleus the Citizens Gas
Co. was created.
The preliminaries attended to, an
intensive campaign was launched to
sell the 10000 shares of capital stock,
which was to be the initial capitali-
cation of the company. People we're
invited to buy the securities not on
strict investment basis but on the
proposition that their contribution
would help to prevent the city from
being confronted with an increase
in gas rates. Persons in all walks
of life became stockholders. To J..
D. Forrest, general manager of Citi-
zenS Gas, earned the distinction of
owning certificate No. /.
More Stock Issued
That particular term of the con-
tract between the two parties rela-
tive to rates was made more secure
the following year when the State
Legislature passed law which
made it unlawful for any company to
charge and collect more than so
cents thousand cubic feet for gas
in the city of Indianapolis.
The Prospect plant of the Citi-
zens Gas Co. was completed and
put in operation early in 1908. The
plant produced gas, coke suitable
for use in foundrieS and steel mills,
ammonia, benzol, coal tar and oil
tar. Within a short time, however, it
was discovered that 600 British
Thermal Units of heat could not be
extracted 50 water gas plant was
installed to strengthen it.
In 1911 the company displayed its
first signs of growing pains by SELL
ing an additional 10000 shares of
common stock. This was sold at
auction and yielded premium of
S420, 1856 or more than 40 per cent
above the $25 par value of the
shares. However, by this time it had
beer. pretty well established that the
common stock, because of the 10
per cent annual return it afforded,
was an attractive investment.
TomOrrow-The Indianapolis Gas
Co. lease.