The Washington herald., 1908-04-23
MAY STOP INITIATION
Gas Companies Curbed I'm
der Bill Reported.
REpEALs WATERING CLAUSE
Congress VIII Now Have Chance to
Pass niIl-HOuse Likely to Act
FavOrably-May Expire In Senate.
Representative Campbell Writes
RepOrt-NO One Injured by Passage.

Congress viii have a chance to decide
upon the merits Of stock imitation" by
the gas companies of the District Rep
.resentative Campbell. from the District
Committee, yesterday reported Mr.. Smiths
bin to repeal the stock imitation clause
of the act OF June 6, 1886, and recommend
ed that 1t pass.
Under this favorable report from the
District Committee, and from the stand
which the House has already taken on
questions of similar import recently it
seems possible that the bill will pass the
House easily.
AS every day under the latest Of Mr..
Dalzelrs choice assortment Of rules, is
suspension day" it is possible that the
bill may be called UP at any time, and
when put upon its passage there is little
doubt as to what the House viii do.
As to the Senates position in the mat
ter there is less certainty, or perhaps,
more conjecture. The Senate has not In
the matter Of the Union Station uackage
bill shown any great desire TO inture
any pubnc-service corporation, so that
passage of this repeating act through that
body is doubtful
The report accompanying the bill D
couched in unprejudiced terms, and gives
complete history Of the section which
It is desired to repeal; decisions which
have been made under that section and
other genuine facts.
As to the Section,
The section which it is desired to repeal,
may be said, in general terms, 10 permit
the gas companies Of the District to
issue so much stock as shall be equaled
by the actual cash value of their plants
and extensions. The report after giving
this section goes on as follows
Aside from the fact that section 3
as # now stands has been declared un-
constitutional by the Court OF Appeals
(whose decision is presumably correcD
and should therefore be removed from the
statute books its practical effect is TO
deny adequate protection 20 the consumer
and the public, because proceedings there
under are ex parte. and the valuation TO
be made depends solely on witnesses fur
nished by the gas companies. and there
are no funds available to the District Of
Columbia to employ experts to value the
gas plants on the part OF the public and.
therefore. no fair valuation can be had
under the present law
After quoting the justice who heard the
case against the Georgetown Gaslght
Company, the report continues:
There is too serious ambiguity in the
act in that the court is TO ascertain the
actual cash value Of the plant which
the auditor holds 20 mean franchises,
rights. good will, and working capital,
although the charters do not grant per-
petual franchise.
The auditor has arrived at this con-
clusion on the ground that Congress in
tended to protect those who dealt in gas
stocks. If this construction be sustained
and the ex parte character OF a judicial
inquiry is 10 be maintained. these COM
panies will be allowed TO capitalize their
profits furnished BY the consumers Of
gas on the testimony Of their own wit
nesses. and thereby secure valuation
which will, II Il becomes vested by judi
cial decision, require a reasonable pTont
thereon. and thus forever prevent re
duction of price Of gas below fair profit
on the accumulated profits Of the gas
companies, plus tangible property.
Cannot Be Separated.
The valuation OF the plant Of the gas
companies and the price Of gas cannot
be separated. Under the law the courts
will not allow the question of the price OF
gas to be examined, but VIII capitalize
earnings or dividends. thus authorizing
the companies TO charge price for gas
which will afford a fair return on such
increased capital, although gas may be
furnished at a less price for fair profit
without such increase Of capital stock.
The repeal of the act will take Moth
ing away from the companies or their
stockholders because they can still dis
tribue their surplus earnings as dividends.
Section can now be repealed without in
jury 10 any one, because no right has be-
l