Los Angeles herald. [microfilm reel] (Los Angeles [Calif.]) 1900-1911, 1908-02-27
LIGHT RATES
1 REST WITH
w COUNCILMEN
ye'
APUBLIC UTILITY HEARING Is
CONCLUDED
SMALL CONSUMERS SUPPLY THE
DIVIDENDS
Auditor Mushet Shows How Companies
Jugge Books to Hide from
Taxpayers the Real
Situation

That big profits are made from
furnishing gas, electricity and power to
Los Angeles consumers was the es-
sence of the hearing yesterday morn
ing by the city council in further con-
siderng public utility rates.
The decision on the rates for 190S-09
will not be made till Monday, though 1t
is currently reported that the majority
of councilmen favor keeping the rates
as they now stand
If this is done it will be against the
strong protest of many consumers who
have in person or by attorney appeared
in the council chamber for the past
three days during the public utility
rate session TO combat the poverty tax
of the corporation representatives..
Riverside for Example
The city council have shown that
Riverside, for instance, could reouee
its rate to 4 cents a kilowatt hour and
make a profit. 1t could set aside
per cent for sinking fund and pay
ner cent on the cost value of the plant
and still make a profit on that basis
Yet in Los Angeles cents per kilowatt
hour is charged for electric lighting.
Auditor w. c. Mushet suggests that
as power is sold in large quantities by
the Pacific Light and Power company
a cent a kilowatt hour it would be well
TO reduce the price of lighting to
cents an hour and the power rates
coulc be increased bit to offset this.
The Edison companys percentage or
profit for 1907 was 1914 on valuation
which was increased during the year
from $3,500,0O0 to $6,000,000. If the value
of property had not advanced on the
books the per cent of profit would
have been 10.
Auditor Finds Juggling
Auditor Mushets special report on
the gas, lighting and power companies
contains these structures:
1.-THE officers of public utility cor
porations once entrenched, deny the
rights of the public, for whose welfare
they should exist, which is thereafter
regarded as a rank outsider
I'm many cases expenses of opera
ton are absolutely improper
"Such a juggling of charges serves
10 increase fictitiously the book value
of the plant account which, in turn,
raves the way for later issues of bonds
entirely unwarranted by actual condl-
TONS
sinking fund on outstanding ponds are
hidden away as operating expenses,
and thus the way is paved for divi-
dend on capital not the property of the
corporation, and bonds are repaid by
the people instead of by the corpora
ton.
.In many cases dividends are de-
clared at the expense of the physical
depreciation of the plant, when allow
ances are made to keep 1t up to a
standard of perfection.
Capital incorrect
also the capital invested, in many
cases, is incorrectly stated and is made
to include millions of dollars of watered
or doctored stock; is often made to
include bonds improperly; to include
items of expense improperly charged
to plant account, and oftentimes sur
plus or exorbitant profits made IN
previous years and reinvested for the
benefit of the stockholders, and not the
people from whom it was taken In the
shape of exorbitant charges, are again
made the vehicle for further wrong In
the shape of basis for further divi-
dends."
Concerning the Los Angeles Gas and