New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-04-08
THE WATER In GAS STOCKS
PUMP FAILS TO FIND 1T.
Officers Who Don't KnOv0-MilliOns
of Capital for License.

the amount of water in gas stocks and how It got
there was made by the Legislative Gas Investi-
eating Committee in session at the City Hall yes
terday. About the ray of light in the gloom
of dense official ignorance which the committee
found was that a capitalization of %OOO,OOO. taken
over by one company from another in a merger,
was based entirely on license to make gas under
certain patented rights, no gas works or property
of any kind accompanying the license.
George W. Doane, vice-presdent and general
manager of the New Amsterdam Gas Light Com
pany. a star witness before the committee IN
showing how much a gas official does not know
about the tangible property values back OF gas
stocks. His attention called by Mr.. Hughes,
counsel for the committee, to the companys ball
ance sheet, which showed total capitalization OF
$42 7.42S of which $S77sOO6S had been cassed as
franchises and property Mr. Hughes asked how
much of the latter represented real estate, and
the witness promptly answered that he had no
means of knowing To other questions he said he
did not believe any other official of his company
knew the details of the company's capitalization.
as he had tried several times to find out and had
failed
How do you arrive at that arbitrary sum-"
asked Chairman Stevens.
Il am unable to tell know nothing about IT,.
the reply.
who does know?''
mo that l know of.
SEVEN MILLIONS FOR A LICENSE.
Mr. Doane said that when the Equitable. the
New York the East River and the Carbide and
Acetylene companies were taken over py IitS 4NS"-
Amsterdam Company no inventory of their assets
was taken. The Carbide and Acetylene Company
was capitalized at $7,OO0.OOO.
Had the Carbide Company any property or
works. asked Mr.. Hughes.
No"
What had it?'
1T had the patent rights
Upon which you pay royaltes?'
''No: we own the license to operate in New-York
| City"
And that license is the sole asset of this COM
pany listed at S7,OOOOOO?
Yes. SIR
NO INVENTORIES OF PROPERTY.
! Mr. Hughes presented a report made to the State
! Tax Commission by the New-Amsterdam Company
officials on June 80. 1904 1t showed total Valua-
ton for plants, tunnel Mains franchises, etc. IN
Manhattan and Queens. of S,196,0OO. This included
s4262 900 as the valuation of the mains and fran
chises in Manhattan, appraised by the state lax
| Board.
Now. that's all your property of every kind?'
| asked Mr. Hughes.
IAN but the good will" said Mr.. Doane
owha the date of your last inventory P59 gs OF
Q-You Would know If there had been such an
oo the w. Oh and R Es RHfr Gqs
/ issued S11OOOO0 of securities, of Whieh S9uaVoV
was in bonds. What did those securities buy. A.
| don't know. l was not with the company at that
Q.Cwhen the New Amsterdam. company. was
formed il issued $230O0OO0 III securities. What was
| the basis on which that sum was arrived At! A
! 0.-As near as I can learn, when the New-York
and East River company took oyer y the 9d Ess
of the value Of the property acquired can you
ONWouidn't the books of the East River COM
pany show? Where are those books Dy the way!
.Q.-The New-York and East River company is
o'LThe books should be in tn custody of Your
company? Yes, they should ne put l kho" OF
nobody who Knows nythng about them
Mr. Hughes read some extracts from examina-
ton of John c. Tomlnson by Tax Commissioner
Stearns in october, 1893 when the New Amsterdam
companys franchise tax case was being heard Mr.
Tomlinson testified that his company had not
earned any dividends its stock and had to pay
interest on it's bonds. The following part of the
testimony related to the water in the companys
stock:
Commissioner stearns-To be frank about it.
Mr. "Reminiscences i helped put it IN; l am ia
Commissioner stearns-Did you get your bucket
Mr.. Tomlinson-I got 1t as fun as I could There
were some other big buckets. My bucket was a
very small one; you might call mine tin cup.
say it for publicatioE-there is more or less
water the there is in all of these reorgani-
pro PROPOSE We hove Exercised the franchise we
lutte loss. and therefore should not be taxed Next
year, # We should make a better showing that
would be a different proposition.
that the New-Amsterdam company made for the
Consolidated last year SS7O3s 600 cubic feet of
and Mr.. Hughes had the witness figure the rate
OF cost his company of all the gas manufactured
last year. $3.50 10000 cubic feet. The rate proved
to be S25 cents 1,GOO feet. The companys price
to the Consolidated was 92.SS cents.
NATURALIZATION OF PROPERTY
Mr.. Doane said that the real estate holdings OF
the New-Amsterdam company were OF far greater
value than appeared on the books of the company
He said the tunnel under the East River was of
enormous value while land for the most part had
been acquired in separate lots ana as these now
stood they covered large and were worth
much more than double in most cases the assessed
value as appraised by the city tax commissioners
do you mean to say chat the city is taxing your
land on basis of 80 per cent valuation" asked
Senator Page.
They lots. not plots" said Mr.
Mathewson OF counsel for the gas company.
which the legislature of the State of NeW-York
gave your company? How much do you value |
Doane ~ ~
Has it ever been appraised"
Not so far as l know
ELECTRICAL CONIPANY's BIG PROFITS
John W. Lieb. jr.. Weep president of the Edison |
Company, testified that the eompany's net profit |
for 1904 was 50 299 S99 The company had not paid
dividend he said but had surplus of S. 4O2O7S |
and had set aside for depreciation $1l9223 He |
SAID the company mad paid interest for five years
of its existence on $40OOOOO0 of bonds
What was done with the surplus of more than 4
six millions and the more than four millions ser /
aside Tor depreciation?" was asked
reply. was '"e
The witness then explained that he was an oper-
ating official and could not testify authoritativeiv
as TO The expenditure of the funds of the command