The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-08-04
An Exhaustive Statement of the Gas
C~Ompany's Position by Hon.
#. w. M. CutcheOn.

ually but voluntarily reduced the price of
gas from something over SO per LOCO feet to
80 per 1000 feet. This policy has been
pursued from a three-fold motive-in order to
increase the company's business, in order to
minimize the Fiction that is always de-
ve!oped in dealings between a municipality
and a company that controls a business in
! which large numbers of the citizens of the
municipality are concerned, and in order to
satisfy the public so far as possible. To make
the reductions mentioned it has been neces-
sary of late years to enforce the most rigid
economy in the company's business and to
be satisfied with very small returns upon the
company's investment. By reason of the Ie-
ductlon in the price Of gas from 81 so net to
81 80 net, made Jan. 1, 1896, and Of the large
reduction in the price at which the city
streets and municipal buildings are lighted,
which was made at the same time, the earn
ings OF the company were sc far diminished
that it became necessary to reduce the divi-
then to cease paying dividends altogether.
During the past year we have earned a little
more than enough, in addition to operating
expenses and fixed charges, to make the eX-
tensions and requirements which are requisite
to enable the business to go on. Then, too,
for nearly two years the company has consist
entity pursued an even more liberal policy
than heretofore. Every reasonable and many
extraordinary efforts have been made to sat
iSfy all demands of every customer, as we'll
as the city and public generally. This policy
has cost money-has diminished profits al
ready reduced. While the company has not
in any sense been embarrassed, it's stock has
suffered very seriously in consequence of the
failure to pay dividends, a result enta;led by
the course of action referred to. This
result, however, has been cheerfully
borne by the shareholders in the hope
and belief that with a return of better
times and a realization upon the part
of the public of the effort the company has
been making not only to satisfy every rea-
sonable demand, but to pursue a liberal and
even generous policy, the company's business
would be so largely improved that dividends
could again be paid, and that such increase
OF business. when it should come, would be
permanent. 1t was our hope also that in
consequence of this course, the chickering's
that have sometimes marked the dealings
between the city and the company would
completely disappointed. Each concession,
each manifestation of willingness to oblige
the municipal authorities. has proved but
an invitation to some new attack uDon the
eompany's prosperity.
Last Saturday the board of equalization
saw Mt to assess the personal property and
franchises OF the company at the sum of
81, 800, coo. The action of the board of equal
%iZatlon, If insisted upon and successfully
-maintained, will Increase our taxes to about
$ $S5 90o per year, a net increase of nearly
$25. 0O. Even If our franchises be legally
taxable land we have Always contended that
they are noD, this assessment is many times
the value of both our personal property and
franchises. The company has little personal
property aside from its mains, meters and
repair stock. and its franchises, by reason
OF the development of the electric lighting
uuS-neSS, nave ceased to be exclusive. and
have but nine years to run. If the company
should be compelled to pay a tax on the
basis of this new assessment, it would be
unable unless the price of gas were
increased. to pay its fixed charges after
paying its operating expenses and the cost
OF making the absolutely necessary replace
ments, Tor, owing to the present condition of
business, it Is impossible for it. to sell bonds.
This situation leaves the board of direc-
tors but. one resource-to. raise the price of
gas. After the explanation ] have given of the
purposes that the managers of the company
nave entertained, every one must understand
with how much reluctance we shall take this
course, il driven to it.: 1t will mean practical
ly a complete reversal Of the policy Dursued
during tie last two years. In any event. We
shall increase our price only enough to re-
imburse us for the amount we are obliged
to pay. in taxes over and above the amount
we paid last year, that is to say, enough
to yield an additional income of substantially
S2o,UOo. Thls will necessitate raising our price
6 to at least East s1;4S per 1000 feet
case the action of the board of equalization
is insisted upon successfully, we must and
surely will do. This statement is neither a
threat nor a bluff. If driven to this action. we
shall take it with great regret, and we shall
take it only if driven to it. But in that case
we certainly will do what I have said, and
doing so.
The result will be that the people of this
city Will have taxed themselves $25, 900 a year
more than they are now taxed and not for
their own exclusive benefit, but for the benefit
OF the state as a whole. They will have
seriously embarrassed a great and fairly
prosperous business, upon which some 1,25O
of the people of the city are absolutely de-
pendent, and which indirectly contributes
very powerfully to the prosperity of the whole
city. They will have antagonized a body of
men whose whole endeavor since they took
control of the property has been to earn sue
cess for the company by satisfying the pub
lie. The injurious consequences to the city
as we'll as to the company must be consider
able. They will have done all this with no
advantage to the city, to the taxpayers or
to the public generally. 1t will be but an
other instance of the short-sighted policy pur-
sued by our people. who seem to have learned
little by observation of the superior success
Of a different policy which has been applied
successfully in neighboring cities. Our peo-
pie seem resolved to take a leaf from the
book Of Duluth. They would better turn
their attention to their more successful rival
up the river.
Just one suggestion more: The whole
theory of the present method of taxing the
property of companies of this sort seems to
me to be erroneous. In the nature of things
its property has only a varying value, which
must be computed upon the basis of its
earnings. Its tangible property, if TO longer
used. has practically no value. In other
words, its property has no salable value.
1t is always unfair, sometimes to the COM
pany and sometimes to the state, to attempt
to assess this property as ordinary property
is assessed. A fair system of taxation would
impose a reasonable tax upon the gross earn
fngs of the company-such a tax as is i'm
posed upon the railway companies in this
state, Under such a system the tax which our
company paid last year would be approximate