The Washington herald., 1906-12-27
GAS PROFITS ENORMOUS.
Interesting Facts Disclosed b,
Board of Trade Ten Years Ago.


Board of Trade Ten Years Ago.
The Washington Board Of Trade is
more than likely 10 take COgnizance Of
The public demand for cheaper gas II
appointed special committee in 1895.
and the immediate result Of its special
investigation was the reduction Of the
price Of gas by the Act Of Congress
Of 1896
The special committee Of the Board
Of Trade having the matter ia charge
was made up Of Jackson II. Ra!ston.
Ellis Spear, George II. Harries. and
Frank y. Carver The committee was
appointed IN January. and il took ten
months for its investigation, making its
report in October OF the same year. The
committee was instructed TO ind out
what. IN its judgment, was a suitable
price for gas Of the right quality. and
also to report whether gas can be
furnished more advautageousiy by the
District OF Columbia or by private cor
porations
The committee went to work with great
thOroughness and began ~ the beginning
II found that Of the S59Cl0 capital stock
which Was hxed for the Washington Gas
light Company when il was chartered by
Congress only 1880 was paid IN cash.
"the rest probably given 10 subscribers as
a bonus" The report rehearsed the facts
Of the marvellous increases Of capital
stock, by acts Of Congress. until il reach
ed $4,000. and in lS65 a further increase
10 100000. The report says:
Gift to the Stockholders.
1T is conceded by the company that
this Increase Of half a million dollars was
a pure gift to the stockholders, no money
having been paid therefor by any Of
them"
Then in 1872 Congress allowed a further
increase Of capital stock 70 SI.200.o 600, with
a privilege of an additional increase. The
report goes on 10 say: 1T Is contendcd
by the company that the last increases.
aggregaung S1,c00ooJ, were based upon
actual cash paid in by the stockholders
for the stock received by them. but a
careful examination of ali the facts does
not appear 10 sustain this position. mas
much as It appears that at times. suDstan-
tally coincident with new issues Of stock.
enormous cash dividends were made. far
In excess Of the amounts received from
stockholders in payment Of new stock. the
dividends in one year aggregating 50 per
cent. in another s. per cent, and in a third
50 per cent
The report shows that these fncreas es
OF stock having awakened the public in
terest, a new method was devised OF dis
tTibuting the constantly increasing sur
plus without declaring dividends so large
that they would excite the cupidity of
outsiders. The company issued TO stock
holders certain certificates Of indebted
ness aggregating 100000 These certifi-
Gates, however, represented no money
paid in by the stockholders. The excuse
for issuing them was that the funds Of
the stockholders to the amount Of $500, 900
had been used in extending the plant.
SAYS the report: Upon these certificates
thus presented TO the stockholders 6 per
cent interest IS paid, and by this means
the stockholders both eat their cake and
have It
The report was made in 1885. It goes on:
Dividend of 81 Per Cent.
within the past year stockholders have
| received as dividends 20 per cent on 1900,
Goa. or $4,000 and also per cent interest
on S6Oo,00O. or S36,OO0, making q total of
/ $4,000. When one bears in mind the
/ fact that this amount is paid upon the
actual cash investment Of not exceeding
/ 500, 900, upon which it represents a divi-
dend OF 81 per cent an idea Of the profits
/ Of the gas business may be formed"
| On the question Of the cost Of gas pro-
duction the board Of trade report says
/ that the factors vary with the season
and the market price osssnateriaL Ac-
cording to the best authorities. the COM
mittee found the cost to be from . TO 20
/ cents a thousand. To this must be added
/ 10 10 Is cents a thousand as the cost of
delivery at the burner. To this repairs
must be added. The reports of the
! Washington Gaslight Company. exam
/ med by the committee, showed that this
/ item amounted to 1 per cent Of the
/ claimed value Of its plant. or 4 cents per
| thousand cubic feet OF gas manufactured.
/ Figuring on the cost of the raw ma
! teriaIs. the committee found that in 1855
/ the material used cost 36 cents per thou
/ sand feet Of gas, while in 1888 ii cost only
/ y cents per thousand The report con-
/ tinues.
! In arriving at the foregoing results.
we have assumed the correctness Of the
! figures furnished by the gas company and
/ the legitimacy of all the terms of the
! expense account We have. also assumed
I that no favoritism has been exercised in
/ the collection of bills. and that no person
has received gas free of charge because
of his power to render political favors.
We have not inquired whether expendi-
/ lures for services have included the en-
pIoyment OF newspapers or other mediums
] 70 rrpfHrf Eha interests Of Tho comma nv