New-York tribune., 1906-02-24

EIGHTY -CENI O5S.
The impatient statesmen and their eager fol
/ lowers of the press who We're going TO aoollsE
the State Gas Commission out of hand because
in its form1. report TO the legislature as OF
! December 81 it did not seef applause by indl-
: eating what its decision would be on matters
which were at that date still open TO argument
! before II may now conclude, and possibly al
nit that they wera as unreasonable as they
! were hasty. The Gas Commission, even though
il was selected by the Governor rather than Dy
local officials or agitators, or by some heaVen
sent guardian Of gas consumers, seems 10 nave
had the interests of the people OF this city thof-
ougnlv an heart. The commissioners did not, ii
is true like the Queen of Hearts. shout "on
with his head" ar the first sight of gas man.
without waiting 10 hear the facts Of his case.
Neither did they assume that the last WORD
of information on the subject had been EN-
bodied in the Stevens report, valuable as that
investigation was. They properly felt that their
actions should be based on their own study
not on the statements made in some other pro-
ceeding So they acted Independently, judi
cialy hearing the companies as well as the com
plainants Now, as q result, they have with
reasonable expedition ordered the lowering OF
prices in Manhattan 10 so cents They have
still under consideration the price charged in
Brooklyn and few days ago adjourned their
hearings at the request of the counsel for the
cOmplainants. who found himself worn out by
the way they pushed business.
The report of the commission is gratifying,
not merely because il orders lower price, bur
also because 1t deals with the question of profits
and franchises in n straightforward fashion.
The reasons given for refusing 10 take account
of the value of franchises in allowing an per
cent return on the gas cOmpanys investment
are an interesting contribution TO the discus
sion OF the nature OF these rights. For years
the franchise holders persisted IN treating them
as mere permissiOns to do business which could
not be taxed yet which could be capitalized
The taxation OF franchises, much as they fought
It. seemed to assure their income from these in
tangible permissions Nevertheless, the Gas
Commission says
II was strenuously urged before the commits
sion on behalf Of the company that the COM
mission should allow the capitalization of the
company's franchise. as 1t was assessed by the
State Board of Tax Commissioners at SI,ISl,-
600 and upon this the company paid yearly
tax which entitled the company as matter OF
law 10 such capitalization. On the evidence be-
fore the commission IL is questionable whether
the Consolidated Gas Company has franchises
OF any considerable value. The commission be
lieves that these franchises, granted by the
people without compensation should not be
capitalized against the public, thereby compell-
ing the public to pay profit on the value or
the favor granted by II. The seeming injustice
Of requiring a corporation to pay taxes upon
franchise and at the same time refusing to
allow the capitalization Of that franchise is
phistical. not real. The franchise tax is paid
by the corporation but charged against the
public expense Of operation, and in reality
is therefore paid by the consumer, not by the
company.
1t may be argued that the wastefulness of
the city in giving away properties does not
make them any the less properties and that If
they have value for taxation they must have
for earning That argument would certainly
hold good unless invalidated by the last con-
sideration urged If the payments on the fran
chise are allowed an expense Of operation
and so the right to deliver gas is held entirely
free of cost the commission may plausibly say
that the income TO be secured from the public
should be based on the money actually invested.
and not on gifts from the public which are
held absolutely free. That argument will not
be convincing to gas manufactLr ers. but II IS,
nevertheless worthy Of consideration. If some
OF the franchises have also lapsed, Mr.. WINS
charged in the recent campaign, and the com
pany operates in some streets without legal
right the refusal TO allow income on fran
chises is more justfabe. That point. however
IS one for the city authorities. and should have
Mayor McClellan's serious consideration.
The Gas Commissions report is generally ac-
cepted as a death blow 10 Senator Stevans's
bill 10 abolish The commission That measure
probably never had any eerious chance Of pass
ing but now IL Will hardly even he pushed
! The Page Agnew bills nxing fhe price of gas
Mt the figure named by the commission may
ha though, longer necessary. but there are
reasons Why II might be wise 10 pass them
/ The right OF the legislature TO fix gas rates
! does no; ADMIT OF doubt The gas companies
are likely to contest the power Of the com
mission or. even ~ they admit its administra
tive authority to seek 10 overrule its mandate
ms an invasion OF their constitutional rights of
property. I'm such controversy there is oppor
tF,t
bly, the public would best he served by repeat
ing the substance OF the commissions findings
! IN a statute. thus securing immediate relief to
the consufners OF this city and leaving the
question or the commissions powers 10 be tried
( out SO that II they are sustained they may
! hereafter be used for the benefit Of this and
other cities Investigations may show the
need.