Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-10-07
HEARING IN GAS CASE
Arguments in Opposition to
Petition of Company.
BEFORE AUDITOR OF COURT
Legal Representative of District Ex-
presses His Views.
COMMENT UPON THE EVIDENCE
Assistant United States Attorney in
Attendance - Company's History
From Issuance Of Charter.
BEFORE AUDITOR OF COURT
COMMENT UPON THE EVIDENCE

| Arguments In opposition to the petition
of the Georgetown Gas Light Company for
authority to increase its capital stock were
made by Corporation Counsel Thomas. for
| the District Of Columbia, at the resump-
| ton Of the hearing in the case before
Auditor Payne of the District Supreme
| Court today. Assistant United States At
| torney Mcnamara, representing the gov
| eminent, made brief comment upon the
evidence which was presented earlier in
| the hearing.
THE court Is bound to interpret the act.
under authority of which the George
town Gas Company was created and its
| franchise granted. as It Is written. and
make such an Interpretation as the lam
guage Of the statute and its apparent OBJ
| jects require" Mr.. Thomas said ip open
| ing. 1.-THE judgment Of the court cannot
he influenced by the construction of in
dividual members of Congress in debate
nor their motives or reasons The Will OF
Congress Is spoken by the act itself
| Mr.. Thomas reviewed the history OF the
Washington Gas Light Company from
the issue Of its charter by act Of Con-
gress in July. 184S. and various authorize
| tions for increases of capital stock until
this act of May %. 1872 by which Con-
gress Increased the stock by 500, 600. with
the privilege Of increasing 1t $1,000, COO
And from the act the attorney read the
specification that 1.-The said increase Of
| capital stock shall not be made from I'M
divided profits. which had or might there
| after accrue
This clearly indicates the intent Of
| Congress with relation to the gas COM
panies." Mr.. Thomas argued. land 1t
was clearly ordered that undivided profits
should not be made the basis of a stock
dividend
The attorney made q resume of 1egis-
lative acts and inquiries referring to the
| local gas companies and declared 1t was
| to restrict the dividends paid on gas
| stock to or not more than 10 per cent,
| and that any proposition for a scaling
down of the rate by issuing Of stock based
on undivided profits was in direct oppo-
| sition to the will of Congress.
Meaning of the Acts.
what, then. is the meaning of the acts
| in view Of the history of gas legislation?'
| the corporation counsel queried. Il re-
spectfully submit that 1t Is established as
the unfaltering and unchanging intent Of
Congress to permit increases OF capital
only to meet the cost OF extensions and
improvements in the operating plants.
1.-THE whole purpose has been to reduce
| the price Of gas to the public and yet al
| low the companies reasonable returns
upon the amounts invested in stock. And
so It seems to me that there Is direct
| relation between the price charged for
gas and the proposition we are consid-
Of capital stock, which will add to the
amount upon which the company must
earn paying percentage"
Continuing. Mr.. Thomas said: "Tne
provision of the act Of June s. 1885, which
says the amount of stock and bonds is
sued shall not exceed the actual cash
value Of said plants and the cost OF such
extensions or enlargement OF plants
| \ Ln {nfo tod ctr no
rule as against these corporations and
In favor of the public. which Is that the
valuation Of these plants shall not be en-
larged so as to increase the price Of gas
enhance the capital and thereby entitle
| the companies to rate of income on
| their capital which will prevent Congress
lowering the price of gas because Of in
ability of the companies to bring In a
reasonable income on their new capital
| II they should hereafter be required to
lower the price Of gas.
Certificates Of Indebtedness.
"It is evident from the last proviso of
section of the act approved June 6,
| 1896. that the Washington Gaslight Com
pany, since its last authorized increase
Of stock. had out Of its profits issued GER
| tiflcates of Indebtedness to Its stock
holders aggregating about $500, 600. These
! certificates are by said section Of the act
| authorized TO De converted INTO BLOCK.
"The plain purpose Of Congress, as indi-
| Gated by the reports cited. was to require
the reduction Of the price Of gas and to
restrict the issue OF stock to the actual
cash value of the plants and necessary
| cost of future extensions or future en-
largement Of plants, referring thereby to
| both companies.'
Mr.. McNamara's Review.
| Stuart Mcnamara. assistant United
States attorney, in reviewing the case Tor
the general government. said the present
case is neither a rate inquiry nor pro-
ceedng condemnins property. to which
all authorities cited by the company APP
piled. bu' Is a separate proceeding to
ascertain the value Of gas plant, with
out consider alton of sale or q taking In
| eminent dcl9atE.
Replying to the two attorneys for the
| government, Attorney R. Ross Perry, Of
counsel for the gas company. dec AIRED
| the language Of the act of June 6. 1885,
! meant that the valuation. In event of
| future application for an increase Of cap