New-York tribune., 1886-02-24
WELL WATERED GAS STOCK.
THE REPORT OF THE SENATE COMMITTEE.
CONSUMERS DECEIVED AND THEIR HEALTH IN
JURED-NEEDED LEGISLATION.

CONSUMERS DECEIVED AND THEIR HEALTH IN
JuRED-xEEDED LEGISLATION.
ALBANY, Feb 23.-The report OF the SENATE
Committee appointed nvesgate the consolidation OF
the New York gas companies has been printed Sp'ei
attention given TO the process by Whch an aSIc
gated ind vidal capitalization OF $l"OOlOOo hmped III
one day to consolidated capital of S3JO7S'oOo OF
to he more exact BY which capita oil 7l3,1OO,ooO pe
came a nominal capital OF $39O7s.O00 by simple
change OF FORM without addition 10 the capital Out
accom- panied, the contrary. by tn wlthdfa"" oi
~ 2I39OS9 The committee was not disposed To assume
hastily natthls mere device des ;ned to pat he
new company In more secure ami favorable position
than that occupied Dy the old for e1actg undue proh
by overtaxing the OF Expert account
ants we're employed examine the books OF the com
panlrs The inquiry covered period OF aUont sAty-t"o
years, beginning with the ORGANIZATION Ot the Ne"lo
Gls-light Company in 1928. The examination shows
exactly what pal has been pat into the several com
pdnies what profits have been taken out by the share
holders and what they claim to have left in their own
hands.
TIC committee sh0 gs that fictitious capitalization be-
a for uujust and oppressive eIacuon+ Ihe
report continues: For the sake OF more clear and
authoritative statement OF tho false methods against
gcn tile public should guard itself take the
Of one O companies which combined with others 10
constitute the Consolidated Ga' Company oi Nav
York. The New-York G. slight Company VS. Organized
with proposed capital OF Sl,OOOOJO or thls amount
further capital was ever paid In. But In 1851
the nominal capital was increased by S25O.OOO,
making tue total nominal capital $1,000
900. It is to be observed that Wheh
this addition was male no new capital was
created The company simply ssld let there he more
capital, and there more capital, by transferring
from surplus profits to the credit OF stock account.
This wIs a matter OF b1okGrephH During tho
nine years the nominal capital remained sl'ooO-
OOO In l57l the company reorganized under ne"
aIne and az ain increased their capital stock III SIM
iar manner to the extent Of SJOOO,00o. making the
total nominal capital S4.O0OOUO At this tme' as be-
fore. contribution was made to the treasury "'
the company. The Transaction wds IN effect, sihpy
matter Of corporate decree and bookkeeping. lms
OF capital continued unchanged uhuI NoVcmoer
IL, 1851 when the cOn>OIliaton took elect AT TINS
time the transaction. FAR as capitalization Is con
crrued was similar the one last nonOned. although
effected under different forms Of law.
"n tn, transition from the old corporate existence 10
the new, al iitiOn male To tue actual capI OF
the NewYorK Company. ani yet It's stockholdct' re-
eevcd back the Consolidated Comprny an amount
not only eqnai to that winch the company haI
ycfor. but tue additional amount Of F3GOOOOO, making
IN all - 100000. Ih.s WAS done under an agreement
in pursuance OF which the consolidation wa effected
aud ny winch the Ohrr constituent companies received
similar additions the amount OF stock Issued to their
respective shareholders without any new contribution
to capital employed, to say nothing OF the
amount actually Withdrawn before stated, and dis
tributed among the shareholders
apprars therefore, that this 81 600 being the
par ,Oied stock issued To the stock
nolders of the New.Yurk COMPANY only 100000 was
ever actually pad IN Dyits shareholders That's 10 say
ouly per OF part Of the consohd ed STOCK
which Was assigned to tue Now-Iork Company wa'
actually pad by stnckholders- Tho remaining 30
per cent ad led by simple vote OF tIo compmy.
what Is true OF the New YORK Ga--lisht Company IL
substantially trne OF the nphne, the difference
red
that the stockholders OF the several comp at con
tnbuted ~ the azsrelao only Ss727O1O ia 'aHhi ahd
that S1.l--.23O par vau~ OF Htock nal hrrh l-'h'l ~
p,, me Al To- patents and Oth~r properties; AMI That
<I.2Sl7O nad BEEN rnsfre Ell from surplus pf"hts To
Tins of Si25il7O w's IN effect contributed ny
tie ga- consumer, II W., derived fro revenue, OBJ
taiucd wholly from them. not n lieu oi "a
dvinrnd 30 derived. bnt ~ addition u d'vlienis
ariinnrcd computation to show that per cent upon
S3DO7s O0O-thr amount Of capital STOCK i''ae b' tno
tn-oh atcI Comptuy Il apout the sam a. 'iHteen an
nine One-huudrei'D per cent upon rl',oODVoo-.h ne
nominal capita just PrOr 10 co"so lhii"n "nI ABOUT
the as twrn yfnnr ant iwe'iy-ei<ht onrnun
dredth. pr ceut upon Sll2lJ,JOO. tue actual sidte
capita representing suares ---d for money aud prop
erty OF the constituent '"hpahe~ u u pasu tls
present consumers - the same whether th"y
paV such price Ior Ha% ~ man Won u's', M :. a
- - per cent tue amount of a'i capita OF lnoo
per cent upon che capitol JnI prior 10 oonsoIia % a
non. per cent upon tho stock of the con n'"
II tnr cunfimrts Iad known that the siocsh"d-
only S75oOuO tnat they had t4kr of u IN tue form
vdents Sl5.27lO7S 81 F9.Sl I'D ~ excess OF 10
consolidation cement va, rnt"roi iuto they
clamei have rlt Ia their hands s'.GOO,oOo. ihht
being the pit value of the cOu-Vad STOCK i.suoi 10
shareholders ~ tho NeS-IOrk Company II AL thrs1
had "eon known ~ tn"Y "echrred II cannot d"
SUP osrd that the company could have charKe price
n ~ 81 ,i. t,rt. you'd have crra.i such demand Tor
reduction III the prce OF Ihat tue company could
not have WitustoOi It. Inero cann"t be UNIFORM prce
for gas throu. hour the state The price mast ylry ia
different places acc"ing To the cost of labor aud ma
trrial used aud the amount OF gas c1bHhmrd prlce
that would yield net pr"ht u" 100 pr cent l Nenl"k
might yield profit at al III village or small clty Ia
London he made ch"aprr Than Ia Ne"- PIX bnt
capitalization trBds to incrr"-e the price every where
uron A. an instrument o eItorion II must he frownrd
upon species OF di,honesty Prompt ANA enlro ac-
cnuntaty 10 the puhllr should be made the law VI all
corporate drangs With the people. Complete reports
such dealings shOui he made at guar ana frequent
Britain Legislature should prpvde for testing hy
puhuc authority. tue purity OF gas. II. linmnatns %
cannot safely be- left TO individuals They ack tile means
OF This falls wiihn the range OF purposes Tor
which organized socirtJ exists
" The evidence shows that by altering the radius.
which forms part of tho the passing through
may made TO rVis er tno itto or too much aorord
Ing 1t medr longer or shorter; "a clock may be
too fast or TOO slow hy shortening or rnRth-
ening the pendulum We do not that frauds hay.
committed by this means but We do say that frauds
should be provided against such Inability In this
may b" u~rfu to call attention To very impor
matter ehich appears IN the ryideDce IL ~ -laeh
rht only about one-"lI OF the eaS hat Passe. throu
the burner is consumed aud thereby converted INTO
light. If This evenc', which Is confirmed ny otht tso
Ony be correct, IL must follow that about one haf ~
tue gas "hrh the cohSum'T pays Io' - ~'''''
OF III serious consequence the portion OF
which passes Into the air and posons
this the health If the people l. being steadily
aud straIthiy injured. The evidence shcw that when
hs pressure burner Ia great the escapes
so rapidly IN h Imperfect cOmnuson ukrs place. caut-
ing th. aud injury above mentioned. IL further
appears that the companies can increase THIS pressure,
Their by iucrc ,snx Doth gas bills and doctors bills
THE gas problem involves How to got the best at
tanabe gas, how t0 get II aiI price. how TO permit
no BOrr escape than can be consumed AMI converted
into light and now {" secure accurate measurement
the used A regulated monopoly. sdch as that
which exists n London. 10y which waterrd stock II
clurd aud which snOrts the bbst conditions for lust
amount Of actual caIal employed TO actual rr-
probably the IN st economical system that
has been devised. The word monopoly may tend to
IL. In NaI A.Ikl