Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-08-06
GROSS AND NET EARNINGS
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.

The Georgetown Gas Light Company
must file in the record of the proceed
ings in connection with it's application
for an increase in It's capital stock from
$50, 900 to 100000 statements showing
its earnings, gross and net, It's operating
expenses and the amount Of gas manu-
featured 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 a 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 informa-
ton will require a great amount of cler-
zeal 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
tlOn SOuHSel nOHndS, tne tIlHc WIS cA-
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-
ton as it Is possible 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 1t.
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
earnings in that way--Or not, so far as
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
yentories of the company'S property and
condition, which are in the possession OF
the company during the company's ex-
istence Mr.. Payne said:
TT certainly is 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 1t is made up. AS for the inventories
! presume that such inventories We're
taken periodically, is customary with
corporations, and included IN supple,
mental reports made the stockholders of
the company.
Granted in Different Form.
IT have determined to grant this prayer
in little different form. 1 do this for the
reason that 1 find in the authorities in the
majority of cases that the original cost Is
one of the elements for consideration by
the court not conclusive upon the deter
mination of the present cash value of the
land OF property, but an aid for enlight-
eminent in connection with the expert tes-
timony which Is evidence of estimates
based upon information which they acquir-
ed either first second hand.
I'm the present case 1t will be remember
ed that great deal of information on
which the witness Randolph, who was a
| witness produced by the petitioner mere
bases his estimate upon information ac-
ouired from Mr.. Middleton. the general
manager, and subsequently when Mr.: Mid
dIeton 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.
II will presume for the purpose OF deal
ing with this motion or application that the
hooks of this corporation have been Kept as
ILL, hyyp tive nr-
CARNATIONS. and somewhere they have
a construction account or property account,
which is made up in some tangible form pc
riodically, annually or sem-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.
"In this connection l may refer to the
Arst item on this list and say here that
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
comnany for a certain period of time-fve
| 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 It's
| nroner authorities, what plant 1t did ac-
| nuire or did own what plant 1t organized
| and what extensions ana addltlonS IL
made to 1t and at what cost. All are mat
| ters of fact and not orders of the board OF
| directors.
Il have concluded that the counsel repre-
I santine the District and the United States
are entitled to the Information which have
| formulated in a little different manner than
! in the reauest-to wit. a 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 han
| 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. g. for 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-
| ating expenses Of the company the amount
of gas manufactured and sold during the
| said period.
| va statement of the gross earnings. rms
is what / think counsel refer TO in NOS u
and S-a statement of the gross earnings
| charges and expenses Operating expenses
| ~ during