Evening star. [volume] (Washington, D.C.) 1854-1972, 1902-05-12
hem Into this property Is that what you

that; II shows the contrary"
Mr.. Babcock-"Does the gentleman say
the report shows that the company have
not invested their money in plants and
buildings etc.?'
Mr.. Ray-"As I understand. the report
shows that the increased value of this
stock arises simply from the earnings or
profits OF the company, which Is due to the
eextravagant prices they charge consumers
for gas. Now. If they would reduce their
charges to the consumer for gas to a rea-
sOnable sum they would not have these
enormous profits and their stock would
probably be worth no more than par That
Is about all there is of it. as 1 understand
this bill. AS / read the bill, you are sim
ply proposing now to create gas monopo-
ly here in the city Of Washington and to
water the present stock in the ratio OF
about to l. without the company adding
single penny Of property of any description
to the plant
Vigorous Attack on the Bill.
Mr. Stewart of New York, a member of
the District committee. made a vigorous at
tack on the BILL characterizing 1t as "in-
famous legislation. The committee. he
said had never had a hearing on the bill
and had not considered it over forty-five
minutes. Another thing which impressed
him as strange was the favorable report
which the District Commissioners and city
solicitor had made. He reviewed the his
tory of the establishment of the gas COM
panieS' plant and said their methods
showed the whole scheme to be a cum
ningly devised arrangement to allow the
company to increase the value of its stock
fvefold without any increase in the value of
the plant. From the best information OBJ
tainable. Mr.. Stewart said, the actual value
of the plant would not exceed $500. 900.
Now what are they going to do with the
difference between the actual value and
the s13,ooo.0oo?' asked Mr.. Stewart
why. they going to distribute 1t
among their stockholders. They will tell
you" ha continued, that it is their fran
chise that is worth the difference, but it
was never intended to grant negotiable
franchise to any corporation in the city of
Washington
According 20 the average price of the
stock Of the company-S53-63 a share-to
gether with the average price of the stock
OF the Georgetown company during the past
five years, the capitalization would be 81
Sn2.01. Mr.. Stewart said the price of these
shares had been sent up and down by the
varying prospects of the bill.
The Annual Earnings
Taken what the company was earning
he said, the proposition was not a fair one
He estimated the yearly profits of the COM
pany at SJ4O,00o. This was 10 per cent on
the present par value of the stock. but 1t
would be only -S22 per cent on the proposed
capitalization, which would preclude a fu-
ture reduction in the price of gas
The real object of this BILL" he con-
eluded. is to allow the Washington Gas
light Company to water its stock between
So.W0.NO and 100000. And, what is
worse STILL it will preclude a reduction in
the price of gas IN this city for genera
ton more"
When Mr.. Stewart declared that he hoped
the bill would be defeated. both for the
good Of the District and for the honor of
the House, he received hearty applause
from both sides of the House.
Mr. Payne wanted to know if Mr. Stewart
would favor q bill to reduce the price of
gas to 50 cents thousand Mr.. Stewart
answered that he was not inclined to fight
lr11TN hn
defeat the pending bill, which he declared
to be a bad one.
Price of Gas Elsewhere.
Mr.. Cowherd took the floor at this point
to oppose the bill but yielded to Mr. Gros-
Venor to read a report from the census
bureau giving the price of gas in the vari-
Gus cities.
During colloquy which followed Mr.
Cowherd stated that the price of gas was
about 80 cents in New York city. Mr. Hill
of Connecticut asked if it should not be
higher than 81 here on that showing. The
answer was that il should not, because New
York gas was furnished by three companies
some of them furnishing less gas than the
Washington company.
Mr. Cowherd stated at the outset in his
remarks that he was not opposed to the
consolidation of the two companies. But"
he continued, the title OF the bill is A bill
authorizing the Washington Gasiight Com
pany to purchase the Georgetown Gasight
Company, and for other purposes 1t is
those three innocent words for other pur-
poses that / want to talk about" Mr..
Cowherd predicted that the stock would
go not to S1O0 a share, but to S125 should
this bill pass
Mr.. Cowherd declared that no money had
ever been invested in the plant that had
not been earned By the company since the
original investment of $40, SEQ. If the truth
were known. Mr.. Cowherd said it would be
found that there were hundreds Of thou
sands of dollars in the Golfers Of the COM
Rahy oniy waiting for a recapitaiization
that this money might be paid out in divi-
dends without attracting attention. He
maintained that the cost of production had
hot been anywhere near the increase in the
amount of gas sold.
The increase in the cash receipts for 1901
had been si0O,D0. while the Increase in
cost of production had been only 100000.
In conclusion. Mr. Cowherd declared that
In his opinion this company was the most
favored corporation in the District Of CO.
iumbia; that it had paid dividends which
could not be equaled in any other business
Investment
The company was selling annually one
billion and three hundred million cubic feet
or gas at a net profit of 80 cents a thou
sand feet. But IL you are going to pass
this bill you ought to amend it SO as to
limit the capitalization Of the company
TO the actual value of the plants. The
next thing you ought to do. II you pass this
OIL, Is TO place on Ii an amendment reduce
feet"
Mr.. Ray asked II the proper way to as
certain the value Of the plant was not to
have an investigation made by the District
committee. and Mr.. Cowherd agreed that
IL
Mr.. Sims of Tennessee, also a member
followed in opposition to the bill. Before
beginning, however, he asked Mr.. Jenkins
IL those who favored the bill would not US .
some Of their time. Mr.. Babbock had LETT
the hall, and IN his absence Mr. Jenkins
assumed charge of the bill.
Question Resented.
You attend to your end and we will at
tend to ours" was Mr.. Jenkins reply.
Mr.. Sims retorted that he would accept
the challenge. He called attention to the
very short consideration the bill had re-
ceived in the District committee. For this
reason. he said, very little weight should be
given to the report of the committee
Mr. Mudd took Mr.. Sims to task for this
statement, saying that the bill was before
the committee two months. In answer to
Q question by Mr. Ray, Mr.. Mudd said the
committee had no Information before it re-
Garding the value of the plant.
The hee for