The Gas Industry and its Development in Reading
By LEONARD B. RICHARDS
While natural gas was known for many centuries, and its properties were discussed by the ancients, manufactured gas and its use for lighting did not come until the era of the French Revolution. In 1781 Lavoisier, the French chemist who discovered oxygen, invented a gas holder (in place of bladders) for storing gas; and three years later there was demonstrated at Louvain, the lighting of gas distilled from coal. Gas was first used practically for lighting in 1791 by an Englishman, William Murdock, who piped it to his house from a retort in the back yard. He also discovered the use of a burner tip for a brighter flame, and later built a gas plant for the production of gas lighting James Watt’s Birmingham factory. A great public display of gas illumination in 1802, celebrating the Peace of Amiens, provoked much comment and discussion, and there was considerable opposition. Some, like Sir Walter Scott, ridiculed the idea of lighting London “with smoke.”
In the United States, the first demonstration of gas was in Philadelphia in 1796. M. Ambroise and Company, Italian fireworks makers, produced gas which was exhibited burning in fancy fixtures. Rembrandt Peale, the son of Charles Wilson Peale, the famous portrait painter, was an artist too, but he was also quite a showman, a forerunner of P. T. Barnum. After a tour in which he exhibited a huge mastodon, he settled down in Baltimore. There he built a museum to display the mastodon and other curiosities for profit. In 1816 he sought to increase his trade by the installations of gas lighting. So sensational did it turn out to be, that Peale saw the possibilities of forming a gas company. Wasting no time, Peale and a number of associates persuaded the city council of Baltimore, then a city of 56,000, to pass an ordinance permitting them to manufacture gas, lay pipes in the streets, and contract with the city for street lighting. This was the beginning of the first American gas company.
A company was started in New York in 1823. Boston was next in 1828, Louisville and New Orleans in 1832. In 1836 companies were founded in Philadelphia and Pittsburgh.
Acceptance of gas lighting for streets and houses was slow. People were loathe to change from accepted methods then in use, and costs were high. Fear and superstition played their part. A New England paper in opposition to a proposal to light the streets of a town by gas, listed the following objections:
- A theological objection. Artificial illumination is an attempt to interfere with the divine plan of the world which had preordained that it should be dark during the night time.
- A medical objection. Emanations of illuminating gas are injurious. Lighted streets will incline people to remain late out of doors, thus leading to increase of ailments by colds.
- A moral objection. The fear of darkness will vanish and drunkenness and depravity increase.
- Police objection. Horses will be frightened and thieves emboldened.
- Objections from the people. If streets are illuminated every night, such constant illumination will rob festive occasions of their charm.
Through the enterprise of a group of Reading men, the Reading Gas Company was founded in 1848. The Act of Incorporation named a Board of Commissioners comprising Dr. Isaac Hiester, Dr. Hiester H. Muhlenberg, Matthias S. Richards, Joseph L. Stichter, Robert W. Packer, Samuel Bell, Benneville Keim, E. B. Hubley, William Darling, J. Clancy Jones, John Ritter, and Samuel Griscom. The act authorized a capital stock of $100,000 in 4000 shares at $25.00 par value, of which 1000 shares were required to be subscribed before a charter would be granted. It was stated that “the said Corporation shall have power and authority to manufacture and sell gas to be made of bituminous coal or other materials for the purpose of lighting the streets, building, manufactories, and other places in the City of Reading.” The right to install a distribution system in the streets was also covered.
The commissioners first met on February 12, 1848 in the office of Matthias S. Richards, scrivener and conveyancer, at 13 W. Penn Square to proceed with the sale of stock. Contrary to the hopes of the founders, capital did not flow too freely to the new venture. Two advertised subscription periods failed to sell sufficient stock. In April the commissioners divided the city into four quarters by Fifth and Penn Streets, divided themselves into four teams, and conducted a house to house selling drive. How much this yielded is not stated, but by May 22, 1848 the stock subscribed locally, together with considerable amounts subscribed by out of town men interested in the development of the gas industry, was greater than the amount authorized.
The charter was issued in the name of Governor Francis R. Shunk on May 26, 1848. Dr. Isaac Hiester was elected President, and to serve with him on the Board of Managers were elected William Darling, Matthias S. Richards, John Kessler, Samuel Bell, Henry A. Muhlenberg and Charles B. Dungan. The gentleman last named was associated with a company engaged in building gas works, and had invested heavily in the Reading Gas Company. Richards, who was active in a number of local enterprises including the Water Company, was made Secretary, in which capacity be continued to serve for eleven years.
A committee consisting of Messrs. Darling, Bell, and Richards was appointed to make an investigation of gas works in other places, to determine what would be best for Reading. They moved rapidly, and in only eleven days reported their findings in detail based upon visits to Albany and Newark, and upon available data on many other cities. In part their report concluded: Those who wish to establish Gasworks must depend very much, not only upon the mechanical, scientific and pecuniary ability of the Contractor but also on his honesty and fidelity. In some places gas works have been unproductive to the stockholders and in disfavor with communities in consequence of the manner in which they have been constructed, and the quality of the gas manufactured. No company in a small city can afford to make experiments and incur unnecessary and hazardous risque for an apparently possible gain, or saving of cost in the construction of their works . . The Committee are also of the opinion that the works proposed now to be constructed should be so arranged that the manufacture of gas might be at any time increased sufficiently to meet the demand of our growing city.
The population of Reading at that time was about 15,000.
A contract was made on June 30, 1848 with Battin, Dungan and Company. It covered “a cornplete set of buildings and all other necessary apparatus to make and furnish carburetted hydrogen gas (coal gas) from bituminous coal to the amount of 30,000 cubic feet per day.” The contract provided for a gasometer (holder) and tank 50 feet in diameter with a capacity of 40,000 cubic feet, mains not exceeding four miles, meters, services and lamp posts. The price was $80,000.
The stockholders were not unanimous in the belief that the contract should be awarded to Battin, Dungan and Company even though these people had themselves risked their own money in the enterprise. Much trouble was predicted and the Board was criticised. This necessitated a long, published report in justification of the action of the Board. The work went forward harmoniously, however, and it is evident from a final report on the completion of the work that a wholly satisfactory works and distribution system was turned over to the company in 1849. The inauguration of so worthy an enterprise should naturally be attended by some form of public demonstration, hence an offer of the Freemasons to conduct a ceremony on the occasion of the laying of the cornerstone was accepted.
The gas rate was set at $4.00 per thousand cubic feet, and a long document establishing rates and regulations was prepared. Along with the rules, this advice was given to the first customers.
It is advised that customers give immediate notice at the office, if any escape of gas be discovered, as no deduction will be made from the bills rendered for gas passing through the meter. They are also desired to notify the company as early in the day as possible, of any deficiency of lights, that the evil may be remedied without delay.
The company recommend that proper attention be given to regulating the height of the flame, on which depends the quantity of Gas consumed. By raising the flame to a moderate height, the most perfect combustion and brightest light are obtained, and the use of Gas is thus rendered both pleasant and economical being entirely free from smoke, or the least unpleasant smell.
The works, located at Fifth and Canal Streets, commenced operations in the spring of 1849. The first superintendent was Alfred Sabatton who died within a year. Paul A. Sabatton succeeded him briefly, and then David H. Fox took over the position which he held until 1887. At the beginning, the superintendent was paid $500 a year, which by 1856 had been advanced to $650.
The young company yielded profits almost from the beginning. In June 1850 the first of a series of 3% semi-annual dividends was paid. The cash position, however, was always stringent. Capital expenditures for mains and services required by an expanding demand for service kept the till empty. Many of the early extensions were paid for by the customers, who then enjoyed free gas until the sum expended was repaid. This procedure had the advantage of saving the interest which ordinary loans would have entailed. The continual plowing of earnings back into the business justified a number of liberal stock dividends through the years. Resulting appreciation in value, characteristic of successful ventures of that era, while not as spectacular as that of some industrial enterprises, was nevertheless considerable.
The principle that a large consumption should earn a lower rate was recognized in 1851 when a special rate of $2.87 1/2 per thousand was introduced for the cotton mill of the Reading Manufacturing Company. This was the first industrial installation. The Railroad Company Shops on Seventh Street followed shortly thereafter. This helped to precipitate a serious difference between the Company and its customers over the rates charged residential users.
In February 1853, when the Company was hardly four years old, and had only about 400 consumers, the storm broke. Following a meeting in Barto’s Saloon, 175 customers, under the leadership of H. J. Felix, petitioned that the rate be reduced from $4.00 to $2.80. They threatened to discontinue using gas if compliance with their demand was not forthcoming before March 1. In its reply, the Company pointed out that its revenue, which had started at $4,335 in 1849, had reached only $9,657 in 1852, that the stockholders’ return had not averaged 3 1/2%, and that therefore a rate reduction was impossible. The controversy engendered hard feelings and unpleasant words on both sides, and was carried in the press for more than a month.
One of the offers made by the managers was to decrease the rate to $3.50 when the number of customers reached 450, and to $3.00 when the number reached 600. One of the papers suggested that this was putting the cart before the horse, and stated that “if they first reduce the price, the increase they want will come as a natural consequence.” Additional pressure was brought by news stories and advertisements concerning a startling proposal by Dr. Win. J. Danowsky of Allentown. This gentleman now unknown to fame, however worthy, sought support for a scheme to deliver gas to customers’ homes in India rubber sacks capable of containing 1000 cubic feet, thus avoiding the high costs involved in an underground piping system. The sacks were to be taken by the customers to a central plant for periodic refilling. A trip home from the gas works with a balloon, 12 feet in diameter, should have been quite an exciting adventure. A competing works of conventional type was suggested, as was the use of individual gas generators in homes.
On March 1, 1853, the Company yielded to its customers’ demands, and set the rate at $3.00, almost as low as asked in the original petition. For a time the stockholders sacrified their earnings, but the business grew, and within a few years it was in an excellent financial condition.
The last word in the controversy was an expression of relief editorially in the Gazette and Democrat. It said in part:
This subject which has been agitating our community for some weeks past, has, at length been happily adjusted, by a reduction on the part of the company, of the price of their almost indispensible article to $3.00 per thousand feet. This is lower than the price at which it is afforded in most of the interior towns, and should, as we believe it does, satisfy the consumers. The old lamps which have been dragged from their hiding places, pro tem, have been reconsigned to the garrets, never again, we hope, to become necessary.
The foregoing editorial concluded with a plea to Council to light the streets, a matter in which Reading remained “behind her neighbors.” It was September of 1855, however, before this improvement was actually made.
In September 1855, Dr. Isaac Hiester died, and Judge Samuel Bell was elected to succeed him as President. William M. Hiester filled the vacancy on the Board of Managers. Judge Bell presided for only five years, when Horatio Trexler became President. He remained in the office throughout the remainder of the active life of the Reading Gas Company. In 1859, E. D. Smith succeeded M. S. Richards as Secretary-Treasurer. In 1862 another holder, similar to the first one, was built. Within the next ten years both were converted to the telescopic type in order to get increased capacity to accommodate the increasing load.
The War Between the States at this time necessitated the imposition of an excise tax on sales of gas. By law it was permissible to pass this tax on to the consumers, but the Company was doing so well, customers and revenues were increasing at such a pace, that the tax was absorbed in lieu of a rate reduction. By 1864 however, inflation had greatly increased costs, and the Managers saw fit to raise the rate back to $4.00. Naturally this was not received too well by the citizens, and a movement started to have municipal ownership. The rate was shortly reduced to $3.50.
The location of the gas works at the extreme southern end of the city was not favorable for distribution. The center of load was moving northward as the population increased. Hence, when greatly enlarged storage capacity was required, the property at Rose and Elm Streets was bought. On this, a telescopic holder of 325,000 cubic feet capacity- eight times as large as the original holder-was installed in 1873, and a ten-inch diameter pipe line connecting it to the works was laid. This then became a main distributing center.
An office building was erected at 519 Court Street in 1867 by the Company, and it moved from its former headquarters at 28 N. 5th Street. When another utility entered the scene in 1882, telephones were installed.
Throughout the first thirty-five years of operation, coal gas was produced by cooking bituminous coal in clay and iron retorts. Coke and tar were produced as by-products. As demands became greater, additional retorts and other necessary apparatus were installed. In 1874 a process using naphtha for enrichment, increasing the capacity of existing equipment was introduced.
At about this same time, an entirely new process of manufacture-using coke, steam and oil to produce “water gas”-was brought to a practical stage of development in Pboenixville by its inventor, Dr. T. S. C. Lowe. The United Gas Improvement Company of Philadelphia acquired the patent rights to this process, and embarked upon a program of improvement and promotion, which wrought a profound change, not only in the technique of gas making in Reading, but also in the corporate set-up of the Gas Company.
Under a contract with the National Petroleum and Water-Gas Company, which became the United Gas Improvement Company, the new process was installed in Reading in 1882. The plant was operated by U. G. I. for the first year. The agreement called for five years of operation by U. G. I., with the Gas Company paying for the gas made at a price high enough to pay for the new equipment in that time. The Company, however, exercised an option to take the plant back at the end of a year upon payment of $18,000. At this time overtures were made by the U. G. I. to enter into a long term lease of the property.
This was in the days before it was considered in the public interest to grant monopolies to utilities under the supervision of state regulatory bodies. In many cities throughout the land competing companies operated. The Consumers Gas Company was formed to operate competitively in Reading, and in 1884 applied to Council for an ordinance granting permission to lay their pipes in the streets. This permission was granted by the city. Naturally, the Reading Gas Company expressed considerable opposition to the new company. Fortunately for the stockholders of both companies and for the community as a whole, an agreement satisfactory to both groups was reached in June 1885. A 99-year lease of the property of the Reading Gas Company to The Consumers Gas Company was written by Isaac Hiester, who had filled the vacancy on the Board when William Hiester died. The lease became effective November 1, 1885, with only one stockholder objecting.
John H. Keppelman became manager in 1887, replacing David Fox who had served in this capacity for about thirty years. He managed the Company until his death in 1924. Since then Allyn C. Taylor has held the post.
Before 1906, gas service was available only in the city of Reading. In 1905 and 1906 three small companies were formed by persons connected with The Consumers Gas Company for the purpose of obtaining charters and franchises to permit the extension of the system into the surrounding boroughs and townships. When these companies had served their corporate purposes, their property and franchises were taken over by deed to The Consumers Gas Company.
The city system was extended to cover Mount Penn in 1906. It was soon found that the low pressure system, adequate for the compact city area, would not have sufficient capacity to permit any great extension beyond the city limits. Hence, when gas service was introduced into West Reading and Wyomissing in 1911 an entirely independent distribution system was started. This system used smaller pipes than those in the city. The gas was pumped into the mains at much higher pressure by means of steam engine driven compressors. During the two years following, the Eighteenth Ward and Shillington were supplied.
An independent group of men formed the Birdsboro Gas Company in 1910. They constructed a distribution system and a small gas manufacturing plant. It was too small a unit to operate economically under modern conditions, having only about 200 customers. By agreement of the stockholders of both companies, in March 1913, a merger was effected between Birdsboro Gas Company and The Consumers Gas Company, forming the present Consumers Gas Company. In the following year a line was laid to Birdsboro bringing the life of its plant to an early end. St. Lawrence was supplied from this line.
In 1913 the Company moved its office to the present location at 441 Penn Street. At this time the service functions were conducted from 442 Court Street. Later they were moved to Third and Greenwich Streets, and in 1920 the Rose and Buttonwood Streets property was acquired for a service building. An addition to house the garage, storeroom and meter shop was constructed in 1923.
In 1909 the fleet of horse drawn vehicles and bicycles was augmented by the purchase of a Reading Standard Motorcycle. A 1910 Mitchell Runabout was the first motor car bought, and was used for supervision. In 1912 a Ford Model T Delivery Wagon was added. The Company was still keeping one foot on base, however, for the purchase of a horse was recorded in the same year.
As the demands for gas increased it was necessary to install added storage capacity. A one-half-million cubic feet holder was built in 1903, and one of two million cubic feet in 1922. These were both of the telescopic type. A new piston type of holder was erected in 1931 with a capacity of four million cubic feet. This one holder, when full, contained as much gas as was sold in the two years of 1851 and 1852. It was not enough for a single day in 1943.
In the period 1923-1926, the mains were carried west from Wyomissing to Sinking Spring and north from the city line to Temple, and southwest from Shillington to Mohnton. Between 1929 and 1931 two long extensions were made. One ran west along the Harrisburg Pike from Sinking Spring to Myerstown, supplying Wernersville, Robesonia and Womelsdorf. The other ran northeast to Fleetwood, Kutztown and Topton.
A trend developed in the industry to produce gas in large efficient plants distributing the product through a network of pipe lines. In line with this trend, a pipe line from Conshohocken to Reading was completed in 1930, thus connecting with the large producing units which supply the suburban and industrial areas surrounding Philadelphia. Wilmington is also supplied from the same system. In September 1930 the Reading plant ceased production, and from then on, it has been maintained for use only in case of emergency.
In order to grasp the magnitude of the development of the industry in Reading it is necessary to supplement the recital of the events since 1848 with a few significant figures. In 1852, when the Reading Gas Company was fairly started, it had about 400 customers. In 1884, the year before The Consumers Gas Company leased the property and coincident with the beginnings of electric lighting, there were 3700. Gas lighting reached its peak and started its decline in 1914. At this time there were nearly 20,000 customers. At the end of 1943 there were more than 37,500.
The number of miles of underground gas mains is another yardstick of growth. Laid in a continuous line, the mains in 1852 would have reached barely to Temple. By 1884 they would have extended to Allentown; in 1914 almost to New York; and in 1943 to Boston. The distances were 4, 36, 117, and 334 miles respectively.
The gas sold per consumer was about 6 thousand cubic feet in 1852, 10 in 1884, 19 in 1914, and 39 in 1943. The capital stock which was $100,000 in 1852 progressively increased to more than five and one half million in 1943.
Comparing 1943 with 1884, it is found that there were nine times as many miles of mains, supplying ten times the number of customers, who purchased forty-one times the quantity of gas.
The gas industry was established solely to supply the lighting needs of the times. Today gas lighting is practically extinct. Gas is now used almost entirely for heating. While most of the gas sold in this territory is used for the familiar household appliances, large quantities are also used for industrial and commercial purposes. Gas has played its part unfailingly in helping to supply the tremendous fuel demands of war production.
In Reading the gas industry is approaching the end of its first century of operation and development. The men and women who make up the Gas Company today look forward to the increasing opportunities which lie ahead in providing this essential community service.
This article originally appeared in the July 1945 issue of the Historical Review of Berks County.