Evening star., 1907-08-06
Statement Covering These and the
Operating Expenses for Five Years.
TO BE FILED BY SEPTEMBER 10
Exception Taken to Auditors Deci
sion Not to Call for Statement
of Dividends.

$15O,0O0 to 100000 statements showing
its earnings, gross and net, its operating
expenses and the amount Of gas manu-
factured and sold during the past five
years, according to the ruling of Auditor
James G. Payne announced this morn
ing. Corporation Counsel Thomas and
Assistant United States Attorney Stuart
Mcnamara had requested such statements
covering a period of ten years, but the
auditor was of opinion that five years
insight into the workings of the COM
pany ought to be sufficient for the pur-
poses of the inquiry. The auditor de-
clined to grant the request of counsel
for statement of the dividends paid by
the company. declaring this to be the
privilege of the board of directors, and In
no way germane to the inquiry.
AS the securing of the desired .nforma-
ton will require a great amount OF cler-
ical work, Mr. Perry and his associates
for the company asked for postpone
ment of the hearing for four weeks. AS
the selection of that date would inter
fere with the vacation plans of Corpora
ton Counsel Thomas, the time was ex-
tended to September 10. BY that time,
Mr.. Perry said. he will be able to comply
with the requirements of the auditor or
furnish so much of the desired nforma-
tlON as II Is poSSlDlt TO give
The books of the company he said. had
not been well kept in former years as
during the last two years, when an audi
tor has been employed
Mr.. Thomas took exception to the re-
fusal of the auditor to require a state
ment of dividends, on the ground that
dividends would enter into the question
of cost per thousand cubic feet Of the
production of gas and constitute an ele-
ment in considering the value of the
plant He also insisted that no increase
in capital stock can be allowed. unless
the stockholders have voted for and re-
quested It.
Auditor Payne's Opinion.
AS to his refusal to require the state
ment of dividends, Auditor Payne said
II don't think it is material whether
the company paid dividends-used its net
the questions pending here are concerned
1t was the privilege Of the board of
directors or the authorities of the com
pany to divide their net earnings or not,
as they might choose. and in what de-
gree or extent they choose, that division
if not satisfactory to the stockholders
simply left the matter pending between
the board of directors. or the executive
authorities Of the company, and the
stockholders themselves. as the holders
of the stock
Concerning the balance sheets or in
ventories of the company's property and
the company during the company's ex-
istence Mr.. Payne said:
1T certainly is a question In my mind
whether the granting of this request in
the form in which 1t is made would aid
us in the slightest degree. The balance
sheets may show the aggregate of the
ledger account at the date the balance
sheet was made but not in any manner
how it is made up AS for the inventories
/ presume that such inventories We're
taken periodically, as is customary with
corporations, and included in supple
mental reports made the stockholders OF
the company.
Granted in Different Form.
II have determined to grant this prayer
in a little different form. l do this for the
reason that l find in the authorities in the
ma iority of cases that the original cost is
one of the elements for consideration by
the court, not conclusive upon the deter
mnaton of the present cash value OF the
land or property but as an aid for enEght-
eminent in connection with the expert tes-
timony which is evidence of estimates
based upon information which they acquir-
ed either first or second hand.
In the present case it will be remember
ed that a great deal of informa ton on
which the witness Randolph, who was a
witness produced by the petitioner here,
bases his estimate upon information ac-
oured from Mr. Middleton, the general
manager and subsequently when Mr.. Mid
dleton was on the stand we find that he got
that information from other sources, partly
from the books and party from other par
ties so that it was all of the character or
secondary or hearsay proof.
Il will presume for the purpose or deal
ing with this motion or application that the
books of this corporation have been kept as
books are ordinarily kept by cooperative or
eanizations. and somewhere they have
a construction account or property account,
which is made up in some tangible form pc
riodically annually or semi-annually, as
their rules require. and that these books OF
account would show the original cost Of the
entire property, the value of which We are
asked to determine at this hearing.
Not the Material Question.
I'm this connection l may refer to the
first item on this list and say here that 1
do not think it would aid the court or the
auditor in dealing with the questions here.
That called for the minutes of the board
of directors and the stockholders OF the
company for a certain period OF time-f1Ve
years believe. What the directors or their
counsel NAV have determined Is not the
material question here. The question here
is what the company did do through Its
proper authorities. what plant 1t did ac-
uuire or did own, what plant 1t organized
and what extensions and additions 1t
made to it and at what cost. All are mat
ters of fact and not orders Of the board OF
directors.
sentinR the District and the United States
ire entitled to the Information which have
formulated In little different manner than
in the reuuest-to w.t. statement showing
the original cost Of the plant and property
of the company including separately the
original plants and the additions, extensions
and improvements thereto.
LAS l said before, l think the matters for
that account will be found In the preserved
records of the company not difficult to ham
die or procure the result from, either in
| the property account construction ac-
count or in the periodical reports to the
directors and stockholders"
Request No. g.
Taking up request No 9, for a statement
of the aernings of the company, gross and
net, for the ten years last past. the auditor
said: I'm connection with this I deal with
item No s, because really the two should be
one as 1t calls for a statement of the oper-
atng expenses of the company, the amount
of gas manufactured and sold during the
said period
VA statement Of the gross earnings This
Is what l think counsel refer to In Nos. 3
and S-a statement of the gross earnings.
charges and expenses Operating expenses
and of other character) during the last five
wears past showing the net earnings by
yearly periods. This, l think. embodles the
request of items 6 and in a simple form,
including all items of receipt and eXpendI-
ture necessary to determine the net earn
ings of the different periods.
Nt