The Washington times., 1907-12-16
Attorney Thomas, Argu-
ing Against Auditors
Report, Declares
Payne Erred.
Asserts Good Will and
Franchise Cannot
Be Considered
Assets.

Although arguments for and against
the approval Of the report Of Auditor
Payne. as TO the valuation OF the George
town gas plant, were allowed 20 pro-
Ceed before Justice Gould this morning,
the court announced that decision
would be reserved until after January Z.
This is on account of the fact that
the petition filed by Corporation COun-
eel Thomas denying the jurisdiction Of
Justice Gould's court in the gas hearing
will be decided by the higher court on
mat date. Attorneys E. II. Thomas and
Stuart Mcnamara appeared to protest
against the approval OF the Payne re-
port today. Mr.. Thomas concluded his
argument shortly before the morning
session adjourned, and Attorney Thomas
Dunlap opened for the gas company.
The Payne report values the plant
at $4,000, and although Mr. Perry. at
torney for the gas company, explained
II was now contemplated 20 Increase
the stock only TO $500 0OC, the court
would eventually be asked 10 give au-
lhority for full increase 10 tho
amount named by Auditor Payne.
Where Payne Erred.
Corporation Counsel Thomas. ia OBJ
jecJing to the confirmation OF Auditor
Payne's report by the court, argued
that the auditor had erred in the fol-
lowing particulars:
That he should not have included in
his appraisement the value of the fran
Chise, good will, lands. and working
capital Of the Georgetown company.
These, Mr.. Thomas insisted, did not
come under the head Of plant" as
designated by the act Of Congress under
which the gas company Is asking to In
crease its capital stock.
Further in finding that if 10 ullr-
port Of The act OF Congress 70 offer pro-
lection 70 the public and individuals
dealing in or with the stock OF The pc
toner, that the auditor should have
found that II was the intent OF
the act Of Congress TO restrict the
meaning OF the word plant IN
favor Of the public and to prevent a
valuation which would allow an Increase
and defeat the reduction Of the price
OF gas to the consumers
Physical Makeup of Plant.
Mr. Thomas argued tnat the plant"
of the company included only the build
ings, foundations for the apparatus
forming part of the manufacturing and
distributing stations, the apparatus, the
gas holders, the general connections at
the station.
Instead OF this. Mr.. Thomas said, the
auditor had included in his estimat -
the following, which should be eliIni-
mated. Land. to the value Of 81. .S23 90;
street mans S67,O306O; street lamp ser
vices, valued at $3.50; lamp posts, 81 ,5TJ;
consumers meters and connections,
8lS,623; working capital. 10000, and
value Of franchise. $50, Col
TIE auditor had further erred. Mr.
InOnlds argued, in denying the petition
OF Mr. Thomas that he should require
the company to show whether the origf-
hal cash capital Of $1,000 was paid in
CASH or property, and also in refusing
10 require the company to furnish
statement OF the dividends paid and
demanding also a statement showing
the charges earnings, and operating
expenses OF the company for the five
years next preceding the fling Of the
petition.
Evidence of Cash.
THE auditor also erred" said Nr.
Thomas 'in not finding that there was
no legally sufficient evidence Of the cash
value OF the plant of the petitioner at
the time the act Of Congress mentioned
was approved, and In not finding that
there was no evidence showing the ac-
tual cash value or the said plant"
The Corporation Counsel said the audi
tor had also failed to find out what the
cost Of future improvements and con-
structions would be, which Mr.. Thoma
Claimed was the only basis for the
courts Jurisdiction in this case.
Mr.. Thomas held that in the yaIua-
ton set by the auditor of $4,000 he had
dlsregarded the testimony of expert tes-
umony which contemplated the word
plant as meaning only the four things
stated by Mr.. Thomas, and had instead
included in the amount franchise. good
Will. and other things not permissible
under the act.
Stockholders Not Consulted.
Mr.. Payne was also at fault. Mr..
Thomas held, in not requiring proof to
be offered that the proposition to in
crease the capital stock had been sub
mitted TO and approved by the stock
holders Of the company.
Finally, he held that the court had no
jurisdiction In the matter, and excepted
on general grounds to the court con-
firming the report. The act OF June so
1886 was unconstitutional and void it
was held, IN that Il attempted to i'm
pose upon a judicial tribunal a non
Judicial function
Il insist, your honor."a said Mr.
Thomas, during HIS argument, that
this legislation Is favorable 10 the gas
companies, and should by no means be
literally construed"
CHRYSANTHEMUMS KILL