Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1908-12-12

| tWSlNG pIdutS. 1CSc OWSlSS PiSauto sbA "
| located in twelve cities and are owned
and operated by as many distinct pri-
waite corporations but are all under a
single control or supervision. The prop
critics In each case have been acquired
by purchase during the past twelve
years. All Of these plants appear to
have been operated under exceptionally
good management. The various plants
used all systems of making coal, oil
and water gas. The cost of these
twelve plants was approximately $10,-
0OO,0 900. There were made during the
year 3,176,646,900 Gu. It. of gas. The
total income of the year was $3,405,7S1
at net profit of s1.747936 over and
above cost of manufacture, taxes, de-
probation and interest on the entire
investment at three and a half per
cent.
BY comparison. at the Cedar Rapids
plant the investment is less than 33s
per cent of that of the twelve plants;
the send out more than per cent, In
dicating that the investment of ten
millions bears about the same relation
to the Cedar Rapids valuation as the
send-out in the twelve plants does to
the send at Cedar Rapids, but the
manufacturing cost at Cedar Rapids
was twice as great per NJ. Gu. TT. as 1t
was in the twelve plants The gas
from the twelve plants which sold at an
average of $1.12 made profit of IL
per cent on the entire investment after
paying an interest charge of BIZ per
cent or total profit of 20is per cent
on the ten millions Of valuation. At
Cedar Rapids after giving the COM
pany credit for cost more than double
that of the twelve plants, the experts
reported a profit at 80 cents per M GU. IT.
or nearly nine per cent ON the equity
after paying Ave per cent interest on
the bonds actually outstanding.
The district court in the Cedar Rap
ids case held that nine per cent was a
reasonable return from this kind OF an
investment and refused to enjoin 90
cent gas.
The ratio Of Investment per thousand
cubic feet Of gas was $3.50 IN
The twelve plants. At the same
ratio the investment at Cedar Rapids
should have been s35O,Ooo. 1t was val
ued by the company and accepted by
the accountants at $344S41, thus veri-
flying an investment of $3.50 per NJ Gu.
fit. of send-out to be about correct for
the value of a gas plant. BY the
same ratio with a send-out of SO mil
lion cubic feet in .Marshalltown the
value of the gas plant alone sl1ould' be
$4,000. The equity above the bonds
is probably not over $4,000 on the gas
plant alone.
Beware Of the Experts.
But what would the experts say were
they to appear? If the company were
to select the expert it is likely that
he, would say whatever the company
wanted him to say. In the Cedar Rap
ids trial a gentleman testified as an
expert who admitted on cross examin-
alton that he had once testified in be-
half of the city of Chicago and within
very few months became vice presi-
dent of the company against whom he
was supposed to be testifying for the
city. Another an accountant, adj
mitted that he had noticed certain i'm
portant erasures on the books, but had
said nothing about them in his report
and that he had secured his employ
ment thru one of the experts" testi-
flying In behalf Of the company,
An Experts Ridiculous Cost.
Mr. FL G. Cowdery who had been
subpoenaed by the company as an ex-
pert, had previously testified In Chi
cago that it cost over SO cents to pro-
t3uce gas in that city. The attorneys
for Cedar Rapids in their cross exam
nation made Cowaery admit that it
had not occurred to him that his serv-
ices We're of little value to the city OF
Chicago since within six months after
he had advised the city that gas would
cost 9S.6 cents to manufacture the
company voluntarily reduced its selling
price to 85 cents, and yet continued to
pay per cent dividends to its stock
holders.
He had tried to evade questions as
to the cost of manufacture but on the
cross examination was forced to admit:
"The way the books of the Peoples
Gas company are kept 1 could in five
minutes by referring to the books as
certain the actual cost to the said
company to produce and distribute
gass."
81 do not know what 1t cost that
company to manufacture and distrib-
ute gas"
II knew when I was subpoenaed in
this case that should be called upon
to testify as an expert on this sub
ject."
'T was manager Of the st. Louis
Gas works, for four years.
II do not know what 1t cost that |
to manufacture and sell gas"
while there it was part Of my duty
to see where there was leakage and |
excessive charges and to reduce
them If I could. While there I con-
suited the books to ascertain the leak
age, fuel consumed, receipts from BIZ
products, etc. After I knew these
facts, I could tell just exactly what
It was costing to produce and distrib-
ute gas"
"I absolutely knew all the time I
was at st. Louis what it was costing
that company to manufacture and dis
tribute gas"
81 testified in Chicago (9s.e cents as
cost while was still manager at st.
Louis. At ST. Louis the selling price !
Of gas for fuel purposes was 80 cents
per Nj. cubic feet; and for any one using
10, 900 to 10000 cubic feet per month:
he price was 20 cents; to anyone using
IN excess of that amount, and the price
vas so cents per NJ. cubic feet"
$4,000 Profits on 81 Gas.
One of the experts" put on by the
was E. G.. Pratt who used a
,oo1- known &C Rrov,n'S .DiractDrv in