(1

UNIVERSITY?”
PENNSYLVANIA
LIBRARIES

 

 

:2 can

 

 

‘jdhs'w .c,l(;i63h\a- Vflunxgiga eafiugfl

\"

1

35'2. 1:173 ,3 13A 0 2:2

I,
Some. further. @onstberations

Municipal 311639116

71052.,
imaging the @318 Works

HE United Gas Improvement Company has had its proposi-
tion to lease the Gas Works under consideration for several
years, and its engineers have been at work for months

going over the Works in detail. If this Company, according to
its own admissions, has given so much time and careful thought
to the propositibn, should not the city, through its representa—
tives in Councils, give it equally careful and thorough consider—
.ation, involving, as it does, millions of dollars, extending over
a gene1ation and touching the comfort and convenience of a
community of a million and a quarter inhabitants?

The Municipal League has observed with great regret the
manifestations of undue haste on the part of certain members of
the Committees of Finance and Gas, whose public action savors
more of concern and anxiety for the United Gas Improvement
Company than for the interests of the City. The League is of
the opinion that in a mattei of such grave importance there '
should be the fullest and freest discussion of eve1y line of the
proposed 01dinance. The value of such a coulse ‘has already
been amply demonstrated. 7 I
‘ When the o1iginal ordinance was first introduced it was
praised as a model of fairness and liberality by citizens of the

' standing of the Hon. John Wanamaker and Rudolph Blanken-
, burg, Esq.; one of its advocates going so far as ”to say that he 7
did not see how the Company: could carry out such agenerous j

i V\
14v-

2

offer at a profit. Notwithstanding the testimony of these high
authorities and the assertions of the company that the ordinance
was all that could be demanded in the way of fairness, justice
and liberality, we find the Company accepting an amended ord-i-
nance omitting some of the objectionable features of the original,
which were pointed out and criticised 'by the representatives of
the Municipal League and other organizations; but we cannot
too strongly call attention to the fact that many of the most
objectionable features still remain unchanged, 6. g., the onerous
conditions imposed on the city should it desire to exercise its
option to terminate at the end of ten years and the failure to
provide for any definite payment to the city except upon an
implied agreement to maintain the price of gas at a high figure.

It is only necessary to cite three instances to show how
important and valuable have been the concessions to public
criticism in‘the way of changes in the city’s interest In the
first place, the Company has agreed to bind itself to spend
$5,000, 000 for “alteration, improvement, extension and better-
ment’ ’; whereas 1n the original it only promised to spend this
sum for repairs, maintenance, alterations, etc.

Secondly. Clause four (4) has been changed so that the city
may resume possession of the Ninth Ward Station at the end of
two years, whereas in the original the city Could not get posses-
sion before the expiration of three years, and then only after an
ordinance had been passed requesting the Company to transfer
the property.

T/zzm’ly. The Company has agreed to light, clean, extinguish
and lepair all lamps and lanterns and keep them 1n repair during
the teim of \the lease, services for which the city appropriated
$202,705.76 in 1896.

Although the proposed United Gas Improvement Com—
pany’s lease has been materially improved as a result of public
criticism and discussion, it is still far from adequate to protect
the city’s interest, as its critics, including the City Solicitor, have
pointed out, and the United Gas Improvement Company’s
proposition is far less advantageous than that of other respon-
sible Pennsylvania corporations. Why, then, should there
be such undue haste? If a month’s consideration has resulted
so advantageously to the city, is it not fair to assume that 7a still
further and more careful discussion would result in still greater

//~f“"‘"”-""> ~~ "
_‘Jée\~w- "r _ i

3

concessions to the city? To answer this question other than by
an emphatic affirmative corroborates the charges that have been
openly and publicly made by men of the highest standing and
by responsible newspapers that improper influences have been at
work to secure a speedy acceptance of the offer of the United
Gas Improvement Company.

The attitude of the majorities of the sub-Committee and the
Joint Committee of Finance and Gas in forcing the consideration
of the United Gas Improvement Company’s ordinance; the
refusal to allow the people to vote on the question of leasing;
the grossly unfair character of the report of Henry Clay as
Chairman of the sub-Committee, in which he suppresses all
reference to certain important testimony against the leasing of
the works and elaborates all that was presented in favor of leas-
ing and against municipal ownership; the practical ignoring of
all other offers; the stolid persistency with which the majority
of the Joint Committee refused every reasonable. request for
further time and careful consideration and for a full transcript of
all the testimony produced before the sub-Committee; and the
recollection of the scandalous disclosures in connection with the
passage of the Mutual Automatic Telephone Company’s ordi-
nance, all tend to strengthen the conviction that has been grow-
ing in the public mind that the charges already referred to are
not without substantial foundation.

Taking up the report of the Chairman of the sub-Committe
which reads more like the brief of a paid advocate of the United
Gas Improvement Company than the calm and impartial review
of the whole situation by a representative of the city, conscien-
tiously striving to do his sworn duty, we find (on page 25) that
he estimates that as a result of the operation of the Gas Works
in 1896 there was a cash deficit of $488,447.85. If, however,
we deduct the disbursements for repairs, extensions, distributing
pipes and the new holder at Point Breeze, amounting to
$666,381.88, all of which, according to sound business princi-
ples, are properly chargeable to capital account, and the
acknowledged error as to rents of $3,000, instead of a deficit
we have a balance of $180,934.03 in the city’s favor. This fact
should not have been left for the watchfulness of an organiza-
tion like the Municipal League to bring out, but should have
been developed by the city’s representatives.

/\ 2. 11:78

4

Then, again, the amended ordinance provides that the value
of the property now belonging to the United Gas Improve-
ment Company (although nominally held by the Philadelphia
Gas Improvement Company) and used by it to supply water gas
to the city, shall be appraised now, and if the city exercises its
option to terminate the lease at the expiration of ten years,
it must pay to the United Gas Improvement Company the
appraised value of this property and 6 per cent. interest for the
whole period. In other words, the Company would have the
free use of the property for ten years and would at the end of
that time get for it, in its worn out condition, its present value
and a rate of interest twice as high as the city has to pay at the
present time.-

The League must again call attention to the possibilities of
further reductions in the price of gas under municipal owner-
ship and the impossibility of any very considerable reduction
under the United Gas Improvement Company’s proposition.
In the period from 1867 to 1877 the price was reduced
under municipal operation fr0m $3.00 per 1000 cubic feet
to $2.15; in the period of 1877 to 1887 from $2.15 to $1.60;
and during the last ten years from $1.60 to $1.00. If this
result has been accomplished in the past by the city, is it not
fair to assume that still further reductions are still possible,
especially as the discussion of the whole question has pointed
out the weak spots in our present administration of the Gas
Works and indicated where improved methods can be introduced
to advantage? And it must also be borne in mind that in
cities where private corporations have been supplying the gas
there have been practically no reductions in the price of gas at
all commensurate with those made in Philadelphia.

If, as it is claimed, the city has no funds sufficient to make
the improvements indicated as necessary by Director Thompson,
in April, 1896, the city can dispose of its Ninth Ward Station,
which has been very generally agreed can now be dispensed
with, and which would probably yield a million dollars. Addi—
tional sums can be secured during the next three or four years by
terminating the contract with the Philadelphia Gas Improvement
Company for water gas at 37 cents per 1000 cubic feet and accept-
ing the properly conditioned and amply protected offer of Col.
John I. Rogers to supply water gas at 2 5\cents per 1000 cubic feet.

a» 'N.

5

This would represent a yearly saving of about $250,000 Add
to this the economies which it has been satisfactorily demon-
strated can be made under efficient business management in the
matter of coal and other supplies and in the disposal of residu—
als, and by dispensing with those men who are only employed
for political reasons and not because they are needed (because
we have the sworn testimony of experts of the highest character
that the labor account is three times what it should be according
to the general experience of gas manufacturers), and we have
the assurance of a profitable and and satisfactory adjustment of
the whole problem, according to the admissions of the advocates
of the United Gas Improvement Company’s ordinance.

Some of- these latter, however, claim with confidence that a
lease to this Company would take the works out of politics,
although the fallacy of this argument has been repeatedly ex-
posed, without even an attempt at denial or refutation. The
history of the street railway, electric lighting and water gas com-
panies, controlled by the same parties as are making this prop-
osition, affords ample proof that the Gas Works in their hands
would become a much more powerful support for corrupt ma-
chine politics than they now are under municipal management.
In this connection it is important to bear in mind that the super-
intendent of the Philadelphia Gas Improvement Company gave
sworn testimony to the fact that appointments were made at its
Twenty-fifth Ward Works on. a political basis and at the solicita-
tion of politicians.

To quote the words of City Solicitor Kinsey in his last
opinion: “The questions involved . . . are not only in a legal
sense most intricate, but they concern interests of great moment
to this city ; they are of such a character that they could not be
disposed of hastily, nor without serious, earnest or careful con-
sideration.” Is not the City Solicitor’s caution in this matter
worthy of emulation on the part of Councilmen ?

GEORGE BURNHAM, JR.,
President ,-

CHARLES RICHARDSON,
Chairman, Executive Committee ,-

CLINTON ROGERS WOODRUFF,
AChairman, Committee on Leasing Gas I/Vorks.

When was Director Thompson right—before
or after the United Gas Improvement Company

made its proposition?

BEFORE.

On May 23, 1896, the Ledger
quotes Director Thompson as
saying in reference to the prop-
osition made by the Baker syn-
dicate: “I am prepared to
stand by all the statements I
have ever made regarding this
matter ..... This syndicate
says it will spend $5,000,000 to
improve the works and furnish
gas at the present rate. If I
can get 551, 500,000 to spend on
improvements I will give the
citizens of Philadelphia as good
gas as the syndicate can and
better for 75 cents per 1000.

“The city does not want a
profit from its Gas VVOrks.
Our object is to furnish citizens
with good gas at the lowest
. possible figure. The price was
a few years ago $1. 50 per 1000.
This was reduced to $1 per
1000 cubic feet. With the
proper equipment, I can give
excellent gas for 75 cents. I
am certainly opposed to the
city parting with her Gas
' Works and shall do all in my
power to prevent their being
sold or leased to private par-
ties.”

AFTER.

On October ‘6, 1897, before
the sub-Committee . having the
proposed gas lease under con-
sideration, Director Thompson
presented a report through his
assistant to the effect that the
sum of $4,864,300 would be
necessary to secure an econom—
ical manufacture and proper
distribution of gas for a period
of three years from January I,
1898.

He estimated there would be
required for mains, $1,7 52,300

Holders ....... 2 30, 000
Services ...... 550, 000
Meters ....... 37 5,000
Water gas plant 5 at
. Point Breeze . . 800,000
General improve-
ments ...... 357,000
Increase of holder
capacity at 22nd
and Market . . . 500,000
Adding 3,000,000
cubic feet capacity
to 25th Ward Gas
Works 300,000
$4,864,300

9287

I

‘F .7

 

 

l/II/IIl/ll/IIII/l/I/I/I/I/llllllllllI/ll/l/l/II/II/lll/l/I/ll/III/II/ll/I/l/Il/

JAB/”170‘”

 

 

3‘ W‘W‘h‘H‘m‘wfl/ HUM/W‘lw‘w“\lxw

W"‘3’"W““W»?WWWWO’Q’»W; WW M

NH “\\!M‘\‘H “NM
“W W M

I ,x

I] W
M, ”MM/M‘s

Hm {
MIC/[M