The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1908-04-08
Prof. Bemis Analyses
Statement for House
Committee.
Report Shows PrOduc-
ing Cost 62 Cents,
With Margin.
Members Of House
Greatly Impressed
by Testimony.

IN a searching and effective analv-
SIS Of the figures given by the Wash
mgton Gas Company in its annual
report, Prof. Edward B. BeDlis. Of
Cleveland, appearing before The
House Committee on the District.
this morning demonstrated from the
company's own figures that the
maximum price Of gas which could
possibly be regarded as reasonable
IN Washington IS IS cents.
Later, further correcting his esti-
mate IN order 10 take account of an
additional aspect of the comDanv's
report Prof. Bemis reduced this to
s. cents.
IS OF 80 Cents Proper Price
Pressed TO name a probable
proper price for gas in TasbiBgror
Prof Bemis expressed the opinion
that the price could safely be fixed
at ~ or so cents. nth assurance
that II would n1s be overturned t,-
the courts on the ground Of Befnq
confscatory.
" nat course you'd you recon-
mend US to pursue in the matter
now before this committee ?- in
qulred member. after Bemis had
concluded his analysis.
/ would recommend two -bi,c- -
replied Prof Bemis. First. rena.I
the section Of the act of JuDe 3
1896, relating to issue Of new caDi-
tallzation before any rights vest m
der 1t; second, as to fixing pronar
price for gas, that can ultimately
be reached only as a conclusion %
examination by expert engineers
and accountants. Congress coD15
properly proceed TO pass a measure
fixing a reduced price. and If the
company chose to contest = +ba
courts would ultimately determine
whether that price was fair and r.
mUnerative."
Bemis Only Witness.
ProL Benis was before the commit
tee about an hour and was +bs -.
person heard Richard n c.or,7.S,o--
ouSh- attorney for the gas co-7D91,-
was detained from the hearing b1- m
ness Il was reported. As a rasT,rt +,
Later date viii be fixed for q bss-ire
ior the gas company. II is undars+oT55
Ihat the gas interests preferred r,o+ =,
make their statement until oDnor+,,-i---
should be afforded 10 examine 9-,-
BeEnls statement with a view p, -
swering
The analysis os the Washfngro7 s,s
situation, as giver by Prof B-Dfs 80
by Ia the most illuminating ana errec-
i've that has been produced he dis
cuSssd the annual report of The Gas
company for 1907, and showed from f7is
swci-n document that the companv-
claims, after all expenses. .deDrecia+io1
Sllu az. tene" al accounts had been met
CL-<tl <tl II pe1lG 10 per cent interest on frS
STOCK . 6-l0 per cent on its bonds and
D per cent on S2,600000 worth Of ce-f -
Gates or Indebtedness, which really
- ---eIN ~ a STOCK QlNlQenQ. but bea-
SOhd lnlS, the report showed ihat The
company earned and put back inro frs
plant &toU0 Of surplus. This surDl,Is
vas equivalent TO a second DO per earr
dividend on the stock On tna ar,c,,Df
OF Sas produced and sold by the com
pany this surplus would represent ID 81
cents per Loo feet of gas
Producing Cost O. Cents.
The eompany's report showed a pro
ducing cost Of 81 cents per thousand
feet Included in this 81 cents are three
items subject 10 criticism. at least
First. leakage Of 10 per cent is Claimed.
while Prof Bemis said properly man
aged companies keep the leakage below
per cent. This would indicate a POS
sible further reduction OF the cost >
cents per thousand feet
Next, the Washington company show
ed Legal expenses amounting 10 about
cents per thousand feet. which Prof
Bem1s sad IS 1 cent too high. on the
basis Of experience Of other companies.
Finally the company charges 10 Operat-
ing expense the interest which * pays
on deposits OF consumers This should
be a capital charge rather than an
operating charge These three items
make A total Of 2-l0 cents per thou
sand fSAt, which added 70 the Is 57-1O0
cents. represented by the surplus. makes
a grand total Of almost IS cents per
thousand feet now improperly charged
against the consumers
Prof Bemis opened his argument By
Faster sf Cane Mav