Evening star. [volume] (Washington, D.C.) 1854-1972, 1902-04-15
GAS CONSOLIDATION
MINORITY REPORT ON THE
PRESENT HOUSE BILL.
History of the Washington Gas Com
pany as to Increase of Stock
and Profits.

The minority report on the gas company
consolidation bill, opposing its passage, as
serts that the proposed consolidation is a
subterfuge and that the primary object the
company has in view is to get out so large
an amount of stock that the dividends on
it will be comparatively small, and Con-
gress may thereby be prevented from re-
ducing the price of gas purchasing the
works should 1t at any time hereafter SO
desire to do. And we further assert, upon
the testimony taken in former COMPRESSION
al Investigations, that should this bill be-
come law and the Washington Gas Light
Company be permitted to increase its cap
ital stock to s13, 100, OOO as is provided for
therein, at least 80 per cent Of such stock
Will pc water, represented only by the
franchise Congress has granted the COM
pany. 1t says that mo power should be
given public service corporation that will
enable 1t to put it's plant in such condition
that 1t either cannot render proper service
or render 1t at a fair cost
When such q company issues a large
amount Of stock under the authority of
legislative enactment and this stock passes
into the hands of innocent holders, the
idends upon all such stock, and any at
tempt to reduce the price of the commodity
will be met with the claim Of bad faith to
the investor.
As to Watered Stock.
In the light of the history of the Wash
ington Gas Light Company printed in con-
gressional reports, it seems somewhat re-
markable that the majority of the commit
tee should assert in their report that no
attempt has ever been made to water the
stock of the company. The company now
has outstanding 100000 of capital stock.
No officer Of the company has ever con-
tended that more than 81 .492 500 was ever
paid in. We believe if the truth was known
1t would be found that only $4,000 was
paid into the company's treasury and all
the balance of its stock represents profits
drawn from the citizens of the District in
ADDITION to the large dividends this stock
has always paid"
A history of the company is given from
Its organization July 8, 1S4S, with an au-
thorized capital of $4,000, of which $42 500
was paid in and $500 distributed as bonus
to subscribers; increased May "a, 1865, to
$4,000 capital stock; an increase Of $780,
oOO made in 1872: increases up to 1888 ag-
gregating 100000, and in 1894 $1,000, GOO
capital stock
The report continues:
THE stockholders seem to have been as
fortunate in the receipt of dividends as in
the growth Of their stock. It is not denied
that the company paid a dividend Of IS per
cent in "a. 70 per cent in rs. 85 per cent in
70 and sn 10 per cent for each of the years
rs, 10 and 80 The treasurer of the COM
pany stated in letter to Mr.. Samuel J.
Randall, dated February 25, 1881, that for
'Thirty-one and one-half years the average
OF OF . cash as and stock dividends had been
16 $40 per cent That year-1ss1, 10 per
cent dividend was paid; 1882. 80 per cent
dividend was paid; 1888, 90 per cent divi-
dend was paid; 1884. 10 per cent dividend
paid.
In 1894 Mr.. Heard. chairman of the Dis
tr1ct of Columbia committee reports the
company as paying an annual dividend Of
md hoy inc
1ngs undistributed amounting to $3.50 600
This, too, during the years when, according
10 their own testimony, the plant had
been rebuilt and its capacity doubled.
In response to the inquiry Of ]. w Bah
cock, on February 3, 1896 the company re-
ports dividends paid for 1896 as 5000, 900 or
little more than % per cent-with cash
balance of ss9,922.3s at the end Of the year.
The Price Of Gas.
The question naturally arises whether
such an enormously profitable business does
not owe large part Of It's success to the
fact that 1t has always been permitted by
Congress to charge the people more than
the price of the commodity was reasonably
worth. Several times Congress investigated
the affairs Of the company upon resolutions
and bills calling for a reduction in the price
of gas. The evidence shows these reduc-
lions were continuously resisted by the
company and frequently with success, not
withstanding the enormous profits they
were making, and one of the arguments
most strongly urged In opposition to the
reduction in the price of gas was the con-
tention that reference is made to the bill
in the Fifty-third Congress to reduce the
price Of gas to 81.
1T staggers one to contemplate the nerve
Of company that demands from one Con-
gress the price of their commodity be not re-
duced for the specific reason that If permit
ted to build their plant out Of the profits
Congress in the future will have a free
a,oPrr o,,I fI4~,
mands of another Congress that they be
permitted to increase their capital stock to
five times its present amount in order that
Congress may not be able to lower the
price Of gas.
"a bill similar to the one now under con-
sideration was reported from this committee
to the last Congress 1t was recomm1tted
to the committee by the House on January
q, 1901 with instructions to report it back
with an amendment reducing the price of
gas. 1t slept in the committee until the
closing days Of that Congress and was re-
turned on March l, with an adverse report.
This bill has been pending before the COM
mittee since the beginning Of this Con-
gress Neither during the life Of this Con-
gress or the preceding one was any inves-
tigation made by the committee on the Dis
trict of Columbia as to what was the rea-
sonable and fair price Of gas In the Dis
trict, or as to what are the present profits
of the company at the price they are charg
ing, or as to what is the actual value of
the property Of the company on which they
are authorizing an Issue of S13,750,0OO of
stock. This important measure was taken
up at one meeting without hearing from q
single witness; without investigating sim
gle fact in connection with it, pushed
through the committee and reported to the
House.
THE statement of the committee that the
company has authority under the code to
increase its stock needs no further refuta-
ton than the introduction Of this bill Moth
Ing In the past history Of this company