New-York tribune., 1908-03-12
GAS PRICE NOT FIXED.
JUDGE HOUGH DECLINES.
United States Supreme Court VIII
Haze to Set Rate.

The question of the price to be paid by New
1orkerS for gas practically passed up to
the United States Supreme Court yesterday in
a decision Of Judge Hough. of the United States
Circuit Court. In declining TO fix rate that
would be constitutional Judge Hough says that
such action would be contrary to the oft repeated
opinion of the highest court in the country, that
no court fix a rate. Even he to do so,
he says. such a rate would have to be based on
the total value Of the tangible and intangible
assets of the Consolidated Gas Company AS
he has estimated the franchises of the corpora
tion to be worth S1200O.O0O. tnat item would
have to be considered in the making of q
rate, and such rate making would prevent the
settlement by the only court that can settle
it" of the question of the nature of franchises
as property, the most important point in the
entire litigation
Though Judge Housh makes some changes
In his original findings. his opinion that 81
cents is confscatory rate for a thousand feet
of gas still stands. This means that the Public
Service Commission and the other defendants
in the suit brought by the gas company to en-
join them from putting the law into effect will
immediately prepare appeal the United
States Supreme Court:
Whether or not the franchises originally grant
ed to the Consolidated Gas Company's predeces-
sors are still vaiidly held by it. Judge Hough
clings to his previously expressed belief that they
are in possession of them. Whatever their nature
says Judge Hough, that which is being done
under them is a of profit and taxable
property by the law of the state. The State
OF New York" says the opinion lis estopped
from continuing to tax that property by one
set of servants and denying it all value through
the instrumentality of another"
BY the addition of $500 $50 TO the tangible
property of the gas company, which had been
deducted by oversi ight, the entire valuation of
such property is placed at S41.S31 40. With
the S12,000.een for franchises. the total assets
of the companys property are estimated AZ
S.l9 S31 43J. Under the S0-cent gas law this
would give a net income of S3024,592.4 which
would be less than the per cent return
which, says Judge Hough. lis the lowest rate
in the city of New York that can be considered
legislatively fair those who already en-
gagged in the manufacture and supply of gas
and cannot readily escape therefrom.
Judge Hough refused to allow the addition
of S33S 0O0 to the valuation Of its property
used in the gas business requested by the gas
company. or to make further deductions asked
for by the defendants. He also refused TO alter
the valuation he previously placed upon the
Astoria plant
AN attractive suggestion" Judge Hough
styles that of the Public Service Commission to
require the gas company. under pain of refus-
ing 10 grant an injunction against the So-cent
law. TO abide by rate that the court may de-
terraine to be constitutional The question OF
what is a reasonable rate. it is pointed out. is
not however the question at issue, but whether
a particular rate is fair. and on that point the
court has given decision.
As to the defendants plea that the reason
able rate of return on the companys invest
lnent should be , per cent instead of per
cent Judge HOugh made this comment: 1T
has not been asserted and it is not believed that
q per cent is a profitable, satisfactory or at
tractive rate for the Investment of capital in d
gas business. In my opinion it is none of these
things but it is the lowest rate which in the
city of New York can be considered legislatvely
fair TO those who are already engaged therein
and cannot readily escape