Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-10-04
Arguments in Chambers Today
Before Auditor Payne.
ATTENDANCE is VERY SMALL
R. Ross Perry Explains Georgetown
Company's Claim.
MOTIVE OF THE CONGRESS
E. II. Thomas Represents District and
Assistant District Attorney Nc
Namara the Government.

Arguments were made today in chambers
at the city hall before Auditor Payne in
the matter of the application Of the George
town Gas Light Company for authority to
Increase its capital stock from $150,O9O to
100000. The testimony In this cause has
heretofore been given in The Star. Cor
poration Attorney E. H. Thomas appeared
for the District of Columbia. Assistant Dis
trict Attorney Stuart Mcnamara for the
government and Attorneys R. Ross Perry.
q. Thomas Dunlop and R chard Goldsbor-
oush for the gas light corporation. The at
tendance at the hearing was small.
The argument for the Georgetown Gas
Light Company was made by R. Ross
Perry. counsel for the corporation He
contended that the motive Of Congress In
passing the act of 1896, under which the
. pending application of the company to in
crease its capital stock from $3.50, 900 10
SoO,oOO Is made, was to relieve itself from
me necessity OF considering repeated APP
pncations from public untility corporations
In this District for legislation to increase
their capital stock.
Gas Company's Contention.
Mr. Perry also commended that the action
OF congress in passi lg the act to eQualize
the capital and capital stock of CORPORA
tons was In order that the corporations
should not stand in a false light before the
community.
He thought that had Congress enacted the
act only to enttle the gas Light companies
TO provide for extensions or endorsements
as commended by the DIRECTORS. Congress
would have worded the act so as to enable
the companies TO issue additional capital
only.
The legislative history of the act was
cited by Mr.. Perry in his effort to prove
n Ito x,iSio
quoted Representative w. P Hepburn's
statement in the House of Representa-
yves in the debate on the section provid-
ing for the increase of the stock of the
Washington Gas Light Company. He said
Representative Hepburn protested strongly
against the measure
This led Mr. Perry to suggest the infer
ence that Mr.. Hepburn was not entirely
familiar with the subject he was d sous
sing.
There was considerable discussion as to
the meaning If the word plant" as con-
tanned in the act of 1896. Mr. Perry con-
tended that the meaning of Congress was
that all the property of the company was
to be placed Under the head of plant"
and that the word was used in its most
general sense to include real estate. Mr.
Perry said that when an appraisement is
made of the property of public service
corporation there can be no question but
that the assets of the corpora ton. includ-
ing the real estate. should be included in
the estimate.
Concerning Value Increases.
AS to the inclusion Of the matter Of in
creased value. Mr.. Perry suggested the
case of citizen who purchased real estate
twenty years ago. The market value of
that property mad largely increased, he said
and the amount of its value must be deter
m ned at its worth at present and not at
the time OF its purchase. He said there
should be no distinction between re aIty and
personality. There was no law which pla ced
mans real estate at the value of the orig
inal cost of It, 49,.
Counsel for the District explained that he
had not made the contention which Mr..
Perry explained
No replied Mr.. Perry, but I believe
some Texas judge did. and 1 will say that
only an abnormal mind could conceive such
an idea
Mr.. Perry then cited authorities in sup
port of his contentious. At haf-past IL
clock recess was taken
Improvements Under Way.
In continuing his argument after the
noon recess Mr.. Perry declared the George
town Gas Company now has under way
a series Of improvements to meet the de-
mands of residents in newly built-up sec
tons west Of Rock creek. These improve
ments. he said, will be paid for to the ex-
tent OF 100000 or $4,000, out of the surplus
OF the company. He also quoted many au-
thorities tending to show that a corpora
ton is not restrained by law from increas-
ing its capital stock by utilizing any accu-
mulated surplus.
1.-The surplus is the property of the cor
poration. and 1t may be divided" said Mr.,
Perry. IF it is in cash it NAV be divided in
cash. If in property that is SO situated that
1t may be distributed pro rata among the
stockholders, the surplus may be divided in
the form of property. All such divisions de-
crease the actual property or resources in
possession OF the COmDanV hlt WI 10
proposed to make division of profits by
creating new issue of stock, nothing is
taken away from the company because 1t is
asked only that the surplus of the George
town Gas Company be impounded, as it
We're. and the stock dividend be authorized.
Instead of being combated by the public
IN lts writ TO increase its capital STOCK"
Mr.. Perry declared. the company should be
encouraged and assisted by the public au-
thoritfes. 1t does not seem that the actions
OF the public authorities are compatible
Stocks and Bonds.
Coming to another point Attorney Perry
emphasized the difference between an issue
of stock and an issue of bonds IF new
issue of bonds was required the law would
demand a statement of the necessity of the
bond issue. but it is different when an in
crease of stock is asked" he said
Quoting from the brief prepared in be-
half Of the gas company. the attorney
cited series Of propositions in the fol-
lowing languages:
The owner Of property devoted to a
public use Is entitled to the benefit of
any appreciation in value above the orig
inal cost and the cost of improvements
due to what may be termed natural
causes. such as improvements made in
the vicinity. the growth Of the city or
town IN which 1t may be located. the
building Of railroads. the development Of
the surrounding country and like causes.
THE franchises of the defendant must
be included in the valuation. The fran
chises OF the petitioner are a property
right. upon which it Is entitled to earn a
fair return.
What has been said of tangible prop
erty and franchises applies equally to good
WILL which is also property.
1.-The property should be valued as q
going concern The modern decisions
including that species Of intangible value
which comes from the gradual building I'D
Of complete organization in the success
full operation of a going concern.
Park Fences and Wickets.