The Washington times., 1907-12-08
PRICE Of GAS
IS DISCUSSED
IN DASH BRIEF
Attorney Describes Rela-
ton of Capital to the
Amount Charged
for Product.

Bearing on the refusal OF Auditor
Payne TO permit the question Of the
rates for gas to be considered in the
hearing Of the petition Of the George
town Gas Light Company. John b.
Daish, appearing as a friend of the
court. yesterday fled a brief in the
Supreme Court of the District of Co.
lumbia. Corporation Counsel Thomas
argued at length, before the court
auditor in support of his contention
that this suit had a direct bearing upon
the rates for gas.
Auditor Payne. however. following out
hIs theory that the act was passed
for the protection Of the stockholders
ot the gas company and falling to find
that the gas consumer was considered
at all. held that there was no relation
between the capitalization Of the COM
pany and the cost Of gas 10 the con-
slmer.
While Mr.. Daish's brief indicates that
il deals with the constitutlonalitv OF
Section 8, under which the proceeding
is filed. it leads Off by going directly
iEto the relation OF capitalization TO
The selling price Of Eas. He points out
that the investor in the stocks OF the
NN+-4lh-AAAg beAs1Nao AAAtlE value on the net
income from the sale OF the product.
and gives authorities to sustain This
contention.
Value of Good Will.
OF the value Of good will Attorney
Daish. says:
The company began with a COmpara-
lively small capital and sold gas at a
rate much higher than now provided
by law. The former has doubtless been
increased. and the latter, by successive
litigation, has been decreased. Both
changes have been brought about by
the increase in population. with a sub
sequent increased demand for gas and
improvements in the methods of manu-
featuring gas, so that it could be made
and marketed cheaper than in years
gone by. The causes Of this increased
value and the decreased price OF gas
lie not within either the control or di-
rectiOn Of the petitioner. The fact that
the company now manufactures and
sells a greater quantity of gas is not
due to its efforts: other influences have
created the demand. The present price
OF gas is by virtue Of legislative enact
ment, after hearings before appropriate
committees Of Congress. in which efforts
were made by the company to prevent
the reduction.
Prevents Rate Reduction.
This is the greatest Of all objections
To watered stocks and bonds They
are issued to represent the future in
crease in the earning power Of public
franchise. A public franchise owned
by a corporation increases in its profit
earning capacity with the increase OF
population. This increased value is due
TO the franchises which the people have
given away to the corporation. The
people are entitled 20 the benefits of
thai increase. and 1t could be readily
secured to the people by a resolution Of
charges. But by stock dividends, based
on this increased value of the fran
chises the railroad is able to divide all
profits and yet declare not more
than or 3 per cent dividends. The
smallness Of the dividend prevents a
Legislative reduction in rates. II, how
ever, no stock dividend were allowed.
and the large profits were employed in
improving the property or IN making
extravagant dividends, a reduction Of
rates would be inevitable"