Indianapolis Times, Indianapolis, Marion County, 21 July 1939 — Page 9

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orfY BULOING ‘GROUPS PONDER |

CODE CHANGES |

Fors Predicts Banner Year

In Construction, Says Home Costs Drop.

Recodification of the City Build-

ing code has been completed and |

will be submittéd to. construction

groups tomorrow for study and crit-|. icism, George R. Popp Jr, City

Building Commissioner, announced today. The new code, which will bring building regulations up to date, was prepared to meet. changes in construction methods since 1925, when building regulations were codified, Mr. Popp- said. months would elapse before the new code is submitted to Council. A prediction that 1939 is slated as a banner year in building was made by Mr. Popp at a meeting of the Construction League of Indianapolis yesterday. 2 He said that the total valuation of construction and remodeling per- _ mits issued up to July 15, this year, is only $2,225,000 below the total for all of :1938. . The average ‘cost of Home build“ing is dropping, he said, and is now under $5000 exclusive of plumbing, heating and electrical fixtures. Increased building activity this year will necessitate additional inspectors inthe building department, he said.

* PLEAD NOT GUILTY TO STOCKS CHARGE

MARION, Ind, July 21 (U. P.).— Pleas of not guilty were entered. in Grant Superior Court today ‘by Henry Behrens,’ 31, Arcadia, Mich., and Victor A. Erickson, 32, Chicago, charged with violating the State Securities. Act. Bond was fixed: at $5000 each but no date .was set for their trial. Behrens and Erickson are accused of attempting to raise funds for a proposed - nonexistent distillery plant. :

He said several |

City Marking Ti ime in Plan to Buy Water Co. After Slim Crowd Hears Views Argued at Public Hearing)

A “fine audience as far as quality, bat disappointing in size” . .. said Mayor Sullivan. ; ay

] (Continued from Page One)

man; Floyd C. Hoffman, public accountant, and Otto Ray, former Marion County sheriff.

Four persons in the audience also .

spoke briefly and asked questions of Judson C. Dickerman, Federal Trade

‘Commission utilities engineer who

appraised the property for the City and recommended purchase of the common stock at $4,500,000.

+ Mr. ®ickerman found that

.1 $3,500,000 was the “justified” price

for .the company’s common stock, but advised the City that it could ill" afford to |turn down the property” even at| the $4,500,000 figure, asked by the |C. H. Geist Estate. - Mayor Sullivan opened the meeting with an explanation of the proposed ‘ purchase. ‘He said his only ‘interest ih it was “as a citizen of Indianapolis where I-have always lived and where I expect to dwell

the balance of my days.” “I am looking to the future,” he

LAFAYETTE TO VOTE ON GYM-AUDITORIUM LAFAYETTE, Ind, July 21 (U. P)—A special election to decide

whether to add a gymnasium-audi-torium to" the high school under

construction’ ‘will be held in West

Lafayette today. ‘ The vote will decide whether to

_ {establish a park district. If the decision is

vorable, & gym may be

. | constructed ‘under terms of a new

Times Photo.

said, “If the water plant had been

purchased 40 years ago, Indignapolis |* today would profit by that act. If the plant is bought now, Indianapolis in 40 years will, in all probability, profit by our act.” He explained that the law firm of Thompson & Rabb had advised the City that revenue bonds are a lien only upon the earnings of the property and cannot be a charge in aly way upon the taxpayers. If the City should condemn the property, the Mayor said, it would mean prolonged and bitterly contested litigation “which might. last for years.” Referring ‘to proposals for a public referendum, he said there is grave doubt that this is legally possible, adding that “we are waiting for a final -opinion.” He compared the. proposed purchase by the City to a young couple deciding to buy the house they had been renting, getting it on payments no higher than the rent they had been paying.

“H i. MAYER nc

Mp-$ UMMER SALE of...

JULY and AUGUST STORE HOURS: 8:30 A. M. to 5 P. M. DAILY

“| figur

In opening the forum, Mr. Deery asked that the speakers refrain from “acrimonious statements.” “This is an important question and it should be approached in a spirit of fairness characterized by sincerity,” he said. “The men who have served on this committee are well known in our City as men of unquestioned integrity, honesty and ability, and their judgment on this question merits impartial consideration. This is equally true of those who tonight will disagree with them.” ; Mr, Hoffman, the first to speak following "the Mayor, declared that if the “water utility is priced right and if it is not to be converted into a political swimming pool,’ I have no real objections to the purhase.” He indicated he believed a-private purchaser would not pay more than $17,500,000 and said the common stock, in his opinion, was not worth the paper it is printed on.” He charged the present rates are excessive and should be reduced 145 per gent, asserted that the “housewife and the health of our

; citizens ‘have .not. been, highly" re- | garded ‘by the management of: the|.

Citizens Gas & Coke Utility.” Mr. Hoffman said natural gas would eliminate “most, if not all, the smoke nuisance that is having such a ghastly effect upon the health and lungs and on the pocketbooks of our people.” * He contended Mr. Dickerman had allowed far too little for deprecia-

- | tion of the property and referred to

Mr. Dickerman’s mention: of the possibility of inflation as a “delirious dream.” In concluding, he challenged the Indianapolis Star and The Times to print his 2000 word speceh “word for word, line for line and figure for e. ” Mr. Marott said the City Admins istration should not “force this purchase at a price above its (the utility’s) actual value.” He asked if it were not true that the owners had taken excessive

-»

b | profit out of the company in the

% form of excess dividends which

“should have been put in a sinking fund for réplatements and main-

| tenance.”

He’ suggested that the City “ask

:|the Federal Government to assist

=| Indiana in. financing a waterway from the lakes to provide the state

with an adequate water supply “instead of the nasty supply of water from White River which is poison water until chemically treated to make it possible to drink.”

Visions Depreciation

Mi: Marott suggested that con-

| struction of the proposed. Oaklan-

don Dam might reduce the flow of Fall Creek to a point to low that the “present sewage connections

=| will cause - great depreciation to

:= | property and the true. value of Fall

E present circumstances,

Creek as a scenic water way.” Mr. White, for many years a civic leader, declared he believed purchase of the utility now is “an aet ‘of sound expediency under the though to me some features of the market-

= able setup are strongly: repugnant.”

He said he objected to the hold-

E ing company bonds. being “loaded

into the debt structure of the Indianapolis. Water Co. through the manipulations of a holding com-

=| pany by the owner.”

The “excess values reflected in the

= proposed price,” he said, probably

would not ‘“overreach the final cost of condemnation proceedings.” Referring to the company’s capital structure, including ‘debt, he said this had been approved and justified by the U. 8. Supreme Court. “However strongly any of us may believe that much of this valuation

§ | is so fictitious in character as to bor-

der on pure exploitation,” he said, “they are values, nevertheless, which are at this time sanctioned by the laws and courts of the nation, and therefore not te be répudiated.” He declared he was firmly con-

ing “into this situation the insidious suspicion that parfisan politics will have something to do with the management of the water company when put under the control of the Utility. District.” Law Sets Politics Aside He said the law specifically provides against such political intrusion, and cited the management of the Citizens Gas & Coke Utility as “distinct proof that no such po-

£| litical policy prevails.”

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Mr. Groninger, who as a former City corporation counsel took ‘an active part in a water rate fight 15 years ago, said the present owners invested $4,000,000 in the utility’s common stock in 1912 and since then have taken cash divi-

| dends of $12,000,000, including $1;-

240,000 last year. He said the price approved by Mr. Dickerman is greatly in excess of the actual dollar expendi-

=| tures for physical property, found

by Mr. Dickerman to be $16,700,000. The actual cash expenditure as of last Dec. 31, he said, was $18,200,-

=(000. He estimated the actual value

‘saving for the City. There are peo-

\Joperated more efficiently and give

vinced there is no reason for inject-.

of the utility at somewhere between $16,700,000 and $18,881,900. Another objection to the proposed purchase, he said, is_that it means continuation of present water rates which, if calculated on investment rather than on reproduction value, are too high.” * “With a couple more replacements on the U. 8. Supreme Court,” Mr. Grorfinger said, the ‘fair value’ rule may be changed to investment as a measure of value, with the cost’ of the money used in the business as the measure of the rate of return. With such change, the water consumers might expect a very appreciable cut in rates. “It seems to me,” he continued, “that: the seller is the only imme-

interest rate, since - the ‘reconsidered’ purchase price gives to the seller. an added million dollars over the ‘justified’ price.”

i Convinced of Saving

Mr. Wetter warned the audience, which by that time was thinning rapidly, that unless the City “buys the. company, you'll have ‘a rate raise.” “I'm convinced, ” he said, “that the company would be a real money

ple at the head of the opposition to this proposal that never believed in municipal ownership and woudn’t want the City to have the scompany as a gift.” Mr. Smith said the consumers will continue paying for water service whether the company is in private or municipal hands. The. djfference; he added, is that “now. the money paid goes into: private hands.” “The record in Indiana Shows” he said, “that municipal utilities are

better service at lesser cost than private utilities.” Following Mr. Smith's talk, Mr. Deery announced that Mr. Dickerman was ready to answer questions from the gudience. ; «= Mr. Ray, a candidate last year for the Democratic mayoralty~naomination, arose and laughed a vigorous broadside against the company and its proposed purchase. “I am in favor of municipal ownership,” he said, “but I'm not in favor of being robbed.” He offered to give $100 to start a fund to employ an expert to “represent the taxpayers, not the politicians.” “This expert,” he said, referring to Mr. Dickerman, “doesn’t know the price of the pumps. What does he know about the mains that have been in the ground 40 or 50 years?

‘I'm Going Back to Work’

“They taught me I wasn’t much of a politician so I'm going back to work. I've been pretty successful

a thing like that.” Several persons in he audience spoke briefly. Eugene Fife Jr. asked Mr. Dickerman what the company had been assessed for taxes. The latter replied that the figure in 1936 was $15,054,820; in 1937 it was $15,278,850, and last year, $14,813,130. =

man if he thought the price in his

all concerned. Mr. Dickerman replied: “I think that it is definitely.-the fair value and I still stand by it. In spite of that, I know we can't buy the company - for that because of the higher market value. T'm not saying the City should pay more just because of the low interest rate, out merely that this low rate makes t possible for the City to buy.” Dr.: E. R. Rebout, chiropractor, asserted the proposed price is “way too high.” John Downey, retired telegrapher;

“it now seems that |

diate beneficiary of the 21% per cent|f .

in business, but I wouldn’t go into

H. W. Daake asked Mr. Dicker-| original report was a fair price to

State law.

PLANT WILL ADD 200[SE

Co. will start production of cream separators. at the Richmond plant Aug. 15, company officials announced today. - They. said that more than 90,000 square feet of factory space had been cleared for the new division and that the entire cream manufacturing division would be moved from the Milwaukee, Wis., plant. They said about 200 persons would be added to the payroli.

RICHMOND, Ind, July 21 (U.| P.).—The International Harvester}

MILL STRIKE ENDS

‘SEYMOUR, Ind, July: 21 . P) ~The Seymour Woolen Mill was closed down today preparatory to resumption of full operations Mons day after settlement of a two-wee

strike by a new contract with Local

21367 of the A. P. of L. : 1 The new contract” was signed by = company and union’ officials last | night. Details were not disclosed. 4

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