New-York tribune., 1906-06-05
GAS CASE ARGUED.
FIGHT ON CONFISCATION.
Vel KnOscn Counsel appear
Judge to Hasten Decision.

GENUS according 10 the present law. came up yes
terday in the United States Circuit Court. before
Judge l-acombe. on an adjourned hearing At the
close of the argument. which lasted all day. Judge
Lacombe asked the counsel submit briefs not
later than tomorrow. He said that he recognized
the great public interest in the case. and would
give IL his undivided attention until he had rem
dered decision.
The interest in the hearing was early manifested.
ana when the case called the courtroom.
which is large. uncomfortably crowded The
number Of well known lawyers who appeared
counsel was exceptional Charles f. Hughes made
the principal argument for the co-defendants, the
state and city and ex-Judge John F. Dillon and
James NJ. Beck made tho leading addresses for the
Consolidated Gas Company. Joseph H. ChOate.
owing to illness. unable 10 be present. but will
submit brief with the other counsel by to-mor
row.
CORPORATION COUNSEL MAKES DENIAL.
The Consolidated Gas Company the COM
plainant in the action and it's contention that
III the law compelling the sale of gas at 10 cents
thousand cubic feet is enforced, 1t will practical
ly amount 10 a confiscat4On OF its property Ii is
held that gas cannot be made for less than Il
cents thousand feet. and that no profit will ac-
crue. The answer OF John J. Delany. Corporation
Counsel. to this contention. general denial
with statements showing that the gas would be
profitable even at 75 cents thousand feet. Mr.
Delany also held that OF the franchises under
which the Consolidated operates have expired
NouhSel lOf tne 0OnSonOate0 ana seNeIdI sup-
sidiary companies included Paul d. Cravath. James
NJ Beck. John A Carver. William " Dykman.
Charles F. Mathewson. Louis Marshall and John
+. Dillon. For the co-defendants appeared Attor-
ney General Julius NJ. Mayer. Charles f. Hughes
and Senator Page For the city. Assistant Cor
poraton Counsel Burr appeared.
The large number OF counsel caused Judge La
combe place the hearing in the case Of Reed
against tie Mutual Gas Company. one of the sub
sidiary companies. which is an injunction suit on
the calendar for friday.
Mr. Beck was the first to speak. opening the
argument for the plaintiff companies.
There are questions involved in this CASE lie
said both Of law and of fact about which men
may differ. The federal judiciary has always held
that no property shall be taken without reason
able remuneration and 1t has always preserved
the status in quo. The state has no natural right
10 prescribe a rate for manufactured article, and
we are after ALL but manufacturers"
PENALTIES CALLED OPPRESSIVE.
The penalties Of the law, Mr. Beck said.
We're the most oppressive enacted by any
statutes II the defendant company should by any
error ask one cent ihan the law prescribed,
# was TO pay fine OF $1,000 for each violation.
Under the law. the last drop Of blood and the
pound OF flesh was to be exacted. Mr. Beck quoted
a number OF decisions TO show, he said. he had
not been quoting law that did NOT exist or coming
70 the court asking relief withou, just prece-
dent He referred TO the question of franchises
and said the state could not play fast and loose
the company could make gas at less rate than
20 cents. Mr. Beck said the Consolidated n2d an
actual monetary investment Q: SsOOO,co
Mr.. Mathewson followed NIr. Beck, and confined
himself almost entirely 20 the question of figures
Mr.. Carver arg1ed for The company, and
mainly followed points brought out by Mr.. Mathew
SON. He said the proposition OF The state and city
that the complainant a tresDasser was amaz-
ing.
such argument coming from The Corporation
especially after the complainants have rsed the
streets for seventy-ive years"
Mr.. DILLON CLOSES FOR GAS COMPANY.
Ex-Judge Dillon the last of the speakers for
the gas company He argued point by point He
held that if the company's contention was estab-
lshed, the money in excess was at hand. Under
the existing conditions he held, neither the
sumer nor the company had been harmed. He dis
cussed the law which gave the municipality gas at
rs cents a thousand cubic feet II was unjust and
discriminating he said.
Charles F. Hughes opened for the eo-defendants.
after recess. and made the longest argument of the
day.
''The Constitution is the bulwark of the people
ne said. Il have no regard for federal judge who
would disregard rights in recognition Of popular
demand This case. however. is one where the
scales of justice must be held even. and the
has a right 10 regulate rates. and they cannot be
construed eonfscatory measures. The question
involved is whether S0-cent gas means
coniscation of the cOmplainants property. Proofs.
taken from the books of the company itself, not
from the figures Of a biased expert, show plainly
that the rate is eminently a proper one"
Mr. Hughes argued the states right 70 fix
70 cent rate for the city. and upheld f. AS for the
penalties. which the counsel for the company held
as excessive Mr.. Hughes held. that if the penalty
was only 800. instead OF $1,000 ii would mean $50
oD0Of0 single year, if only $40 il would total
ssSO00OeO in a year. Mr.. Hughes held that in
junction in this case was necessary. despite the
compaly's declaration of 10000 consumers. Speak
ing of tho company paying per cent on a capital
ization Of SsOceoooo MI. Hughes said:
How have they earned this money? Under these
Sepds in vocation Of both the cooperation law OF
this state well az Of the Penal Code"
GREAT PERCENTAGE OF WATER.
He continued by saving that a great percentage
Of the outstanding stock and bords VAS issued and
Increased without the assets Of the corporation
having been correspondingly increased a single
Your honor may think l am making statements
the court will take the trouble 10 look through the
cerning the formation OF these companies your
honor will readily see that my statement as TO
the worthless character OF a portion Of this STOCK
MI Hughes quoted from the report Of the State
In closing his argument Mr.. Hughes said the
law was confiscatory He said he did think
when the court considered the evidence IL would
10 pay 81 a thousand pending the final determine
tion OF the matter. and that preliminary injunc-
ton would be necessary 10 protect the equitable
sssistant CORPORATION Counsel Burr speaking for
the city said that proof had been given that
the SO-cent Law was confiscatory
Mr.. Msthewson said that the Consolidated Gas
pay It's dividends
THE court need not go into all the affidavits'
said Mr. Beck in his closing argument, because
the laws involved I'm this question were void and
power TO the Gas Commission Is rotten and void