CHICAGO GAS COMPANIES PREVIOUS TO 1885.

Prior to 1885 there were in the city of Chicago two principal gas companies, known as the "old gas companies," which supplied the city with the greater part of gas consumed. They were the Chicago Gas Light and Coke Company, whose pipes ramify the north and south divisions of the city, and the People's Gas Light and Coke Company, whose pipes were laid exclusively in the west division of the city.

The oldest of these companies, the Chicago Gas Light and Coke Company, was incorporated February 12, 1849, by an act of the Legislature permitting the company to issue $300,000 of stock in twenty-five dollar shares and to have the exclusive privilege of supplying the city of Chicago and it: citizens with gas for ten years.

In 1855 the company was authorized to increase its capital stock to $1,000,000 and to borrow as much money from time to time as the board of directors might deem best "for the purpose of constructing, carrying on and completing its works." This clause will later be seen to be of vital importance.

In 1869 another legislative enactment permitted increase of stock from time to time to $5,000,000.

In 1855 a second company was chartered, the People's Gas Light and Coke Company, with the right, subject to the consent of the city council, to pipe and sell gas in all parts of the city after February 12, 1859, or sooner if the consent of the other company could be obtained. The capital stock was not

to exceed $500,000. The price of gas to the city was not to be above $2.00 and to the inhabitants $2.50 per thousand cubic feet.

In 1865 the company was allowed to increase its capital stock and to borrow money at pleasure. Doubtless because of the rise of all wages and prices during the war, the restriction as to price in the original charter was repealed, "but ten years after the passage of this act the common council of the city of Chicago may, by resolution or ordinance, regulate the prices charged by said company for gas; but said common council of the city of Chicago shall in no case be authorized to compel the said company to furnish gas at a less rate than three dollars per thousand feet."

Thus early was recognized the rights of the Legislature to regulate the price of gas and to delegate this power to the city council.

The price of gas in New York City, which had been $2.50 from 1856 to 1864, was then raised to $2.75, and remained so for about ten years.

These two companies, the People's Gas Light and Coke Co. and the Chicago Gas Light and Coke Co., competed in all three divisions of the city until April 21, 1862, when they signed a written agreement for a division of territory and cessation of competition for one hundred years. The People's Company kept the west division of the city and bought the mains of the other company in that division, while it sold the Chicago Gas Light and Coke Company its mains elsewhere.

But in May, 1886, the Chicago Gas Light and Coke Company secured permission from the city council and was about to construct a tunnel under the south branch of the Chicago River so as to sell gas again on the west side. On July 8, 1886, the People's Co. secured an injunction. On October 2, 1886, the Superior Court of Cook County dissolved the injunction. On appeal, the Appellate, January 6, 1887, reversed the decision of the lower Court. Then the Supreme Court, September 26, 1887, dissolved the injunction and held the agreement between the two companies not to compete with each other to be void because against public policy and an abandonment of a public duty.

Notwithstanding this decision, the tunnel has never been built and neither company has entered the territory of the other.

April 29, 1882, the city council granted a permit to a third gas company the Consumers' Gas, Fuel and Light Co., to pipe and sell gas throughout Chicago, on condition that the price of gas should not exceed $1.75 and that a rebate of twenty-five cents should be allowed to all consumers of 100,000 feet or more per annum.

The city ordinance further provided that "if such company or corporation shall at any time enter into any combination, directly or indirectly, with any gas company or companies concerning the rates (or price) to be charged for gas, either to the city or private consumers, or if such company shall directly or indirectly sell, lease or transfer its rights and privileges to any other gas company or corporation the rights and privileges hereby granted shall cease and be of no more force and effect."

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This company built works in the north and south divisions of the city. But on October 2, 1882, all the property and rights of this company were transferred to Dumont Clarke to secure a mortgage of $2,000,000. A sale being subsequently ordered by the United States Circuit Court, all the property and franchises of this company were bought July 15, 1886, by John T. Lester. Thereupon a new company was formed November 26, 1886-The Consumers' Gas Co.--which purchased this property from Mr. Lester December 31, 1886. The objects for which the new company was formed, according to the statement filed with the Secretary of State, were, "First: To build, erect, establish, maintain and enlarge and extend and operate, or demise works in the city of Chicago, in the State of Illinois, and in such other place or places in said county of Cook, as said corporation may elect, for the manufacture, supply, sale and distribution of gas for illuminating, heating and other purposes. 2d. To purchase or lease the property, plant, goodwill, rights and franchises of any gas works or gas company or companies in said city of Chicago, and in such other place or places in said county of Cook as the said corporation

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may elect, and to improve, enlarge and extend, maintain and operate, or demise the same when so purchased or leased. 7. The duration of the corporation shall be ninety-nine years."

In 1885 a fourth gas company, the Equitable Gas Light and Fuel Company, which confined its operations to the south side, was incorporated also for ninety-nine years, as had been the case with the Consumers' Gas, Fuel and Light Company.

The city ordinance of August 10, 1885, imposed almost precisely the same conditions on the new company as had been exacted of the Consumers' Gas Company.

OTHER GAS COMPANIES.

The advent of the two new companies precipitated a war of rates. In a sworn affidavit the Chicago Gas Light and Coke Company has stated that its charge for gas for illuminating purposes, which had been $3.00 net in 1874, $2.50 in 1876, $2.25 in 1878 and $1.75 in 1883, was reduced to $1.00 in 1884 and so remained until the organization of the Chicago Gas Trust Company in 1887. Yet the profits continued high.

Prior to 1884 the profits in the gas business in Chicago, with prices ranging from $2.25 to $3.00, had been enormous. In an affidavit of Columbus R. Cummings, of Chicago, one of the large owners of the Chicago Gas Light and Coke Company-an affidavit filed in the September, 1887, term of the circuit court of Cook county (case of J. Edward Addicks v. Chicago Gas Light and Coke Company, C. R Cummings et al., Gen. No. 62,942)—Mr. Cummings states that this company, "through the increase of its business, has made great gains and profits and has done a profitable business, and that on the 19th day of September, 1887, its assets were valued at not less than $6,200,000 and its total liabilities did not exceed the sum of $5,050,000, and your orator admits that on the date set forth it had not less than $250,000 actual cash on hand."

Mr. J. Edward Addicks, the famous organizer of gas companies, had unusual opportunities of knowing the gas situation in Chicago, through a near relative, Frederick P. Addicks, secretary and treasurer of the Consumer's Gas, Fuel and Light Company, 1884-6, and later of the Equitable Gas Light and Fuel Company and of the Gas Trust Company. In an affidavit before the circuit court of Cook county in 1887 in the case just quoted, Mr. J. Edward Addicks "further states, upon information and belief, that the entire plant and property of the said company has been purchased and acquired by the earnings of said company from the time of its organization, with the ex-. ception of the sum of about $100,000, which was paid in by certain of the original incorporators, and that the company has been from its organization enabled to make such extensions and repairs of its plant as were needed out of its earnings, and also from time to time to pay large dividends upon all of the stock issued by it."

In other words, the entire capital stock of $4,984,200 had never cost the stockholders over $100,000, while they had been receiving dividends of seven