New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-05-21
.AGAINST 50 CENT GAS.
REPORT F4VORS TRUST.
Referee Wants Interest Paid on
THearncd Increment.

Tho -s-orr of Arthur H. Masten, special mas
49,. & -. s,,i, of the Consolidated Gas Company
:. -. Tho validity of the S0-cent gas law,
,,.sse5 bz the last session Of the Legislature
a4rer a long fight, is in favor Of the company
and holds the measure TO he confscatory, and
he,oa unconstitutional in certain aspects. The
venor+ in its present form is entirely tentative
and IS subject first. 10 review by the United
STATES Circuit Court, where judge is asked to
confirm ii next week, and later by the United
States Supreme Court on direct appeal. If the
latter course IS taken the case will be placed
upon the preferred calendar, as involving a mu-
nicipelity.
one copy of the report is in the hands of AS
sistant Corporation Counsel Burr. who has pre-
scented the case for the city in the hearings be-
fore Mr.. Masten 1t contains 145 printed pages.
The Corporation CounseTs office had not. I'D to
last night had opportunity to learn its con-
tents in full. Others copies were given TO Dep
u.y Attorney General De Ford and TO counsel
for the gas company.
Mr.. Burr was able to indicate that the prin-
cipal reason for the adverse nature of the re-
port the decision of Mr. Masten that the
estimate Of the value of the company's property
from which its relative income is computed
should be based, not upon the original cost. but
upon the cost Of duplication of the plant In
other words, the report holds that the decision
should take into consideration the price which
entirely new company. paying for a fran
chise. buying real estate at the present values
instead Of those prevailing when the Consoli-
dated bought its land. might with propriety
charge The city contended that the company
should not be allowed TO make the city pay in
terest on what called its unearned mere
ment.
= suppose said Mr. Burr. that if the COM
paIy were suddenly 10 discover a gold mine
under one of its gas houses II would at once
increase the price Of gas, on the ground that as
ifs property had become so much more valuable
il was entitled TO reap an income proporticnste
70 its increased investment a"
Nr. De Ford gave out a digest of the report.
According 10 this the value of the company's
plant is SS3.351,000. while the city contended
II was about S31 100000. holding that the COM
pany had returned. its value at less than that
amount in its report to the State Tax Commits
sioners- The city held that the cost of gas in
the burners was 4S-63 cents for 1000 cubic feet,
Mt. MasIen says il is 81 cents though the
city says that the audit of the conpany's books
showed the cost TO be $3.50 cents
Mr.. Masten holds also against the contention
Of the city that the value OF The cOmpanys
franchises. estimated at S200100OO must be
considered a part Of the investment, though
they we're not paid for
Attorney General Jackson said the case would
be fought through 10 the United States Su-
prsrne Court
The report seems 70 be generally adverse 20
the city" said Mr.. Ellison LAS I have only
just obtained Il. cannot express any definite
il is Only tentative. and the referee has fixed
next Tuesday as Gag 70 hear objections 10 its
form and suggestions. Then the report will be
presented 70 q judge OF the United States Ctr
cult Court and a motion 10 confirm il will be
made. 4 hearing will be given 10 all parties
concerned, and e the report IS confirmed either
side may take an appeal direct to the United
States Supreme Court. The city VIII then face
the question, deciding whether an appeal should
be taken or not. As have not yet been able
TO read the report, not n a position 20 say
what or action will oe."
Isn't It practically certain that an.appeal will
be taken p" was asked.
well. we don't like 10 be beaten, more espe-
cally as early this in the game" said Mr..
Ellison, smiling. Neither ne nor MI Burr
seemed TO be especially cast down By the report
The stock market course of Consolidated Gas
yesterday suggested the not unfamiliar phenom-
enon Of 2 Wall Street leak" The stock cIoseu
Saturday at 1872. Yesterday 1t opened AT
1874 and by the last hour had advanced 70 15i "a
z maximum gain OF six points. although the gen
eral market was decidedly weak. II closed at
1876 net gain for the day OF AZ points, although
not even any seni-oficial announcement OF the
nature Of the referees report was issued uhu4
long after the close of the Stock Exchange
Mr. Burr spent the evening readlng me re-
port. He especially struck by this extract:
Counsel for the city urged that If complainant
is entitled 10 charge operating expenses 10 oe-
precfation to cover renewals. actual and estl-
mated. il should. the other hand. be com
PEELED 10 credit the operating account or dept
The investment account with the appreciation
Of its real estate values. The force Of this argu-
Iaent is not apparent Under The authorizes
The complainant is entitled 20 return upon
The value Of its properties al the time il is
being used for the public. Whatever enhance
ment there may have been in its values since
the date Of purchase was the result of no effort
on the part Of the consumers Of gas and they
not eQuiIably entitled to a return thereon
Whether il was the result Of mere good fort
une or due 10 the shrewdness and foresight
OF the management Of the company is imnla-
teriaL IN either case the justice Of printing
the general public 10 share its benefits at the
expense Of compliments stockholders is not
apparent.