Los Angeles herald., 1908-07-29
BUYS POWER AT
LESS THAN COST
H. E. HUNTINGTON GETS ELEC-
TRlCITY FROM HIMSELF
CITY ASSESSOR EXPLAINS WHY
TAX RATE is LOW
Pacific Light and Power and L. A. Gas
Companies Cited to Show Why
Assessment Should Not
Be Raised

and Power company and takes Juice"
for his street cars at less than the
cost of production is the reason Guy
Assessor Walter AIallard gave the city
board of equalization yesterday TO ex-
plain the low price OF G cents a
share which is the price liked for the
stocks of this concern.
This statement was indignantly de-
MED by Attorney H. J. Stevens for
the corporation, but Mr.. Mallard IN
sisted that the secretary of the COM
many had given him the information
when he was trying to arrive at a just
assessment for the corporations
stocks.
pany and the Los Angeles Gas and
Electric company had been cited to
appear before the board of equaliza-
tion to show cause why the assess
ments on their franchise should not
be raised. The only reasons they gave
for ohjecting to such a raise were re-
quests to reduce their assessments.
On the matter of the franchise the
Pacific Light and Power company
asked that the assessment be reduced
to a merely nominal sum, as A. e.
Balch. general manager of the corpo-
ration, declared there was no exclusive
right granted by the franchise, his
company was operating under right
granted by the state constitution, and
the right to use the streets of the city
for mole lines and conduits had no
actual value. Mr.. Balch also asked
reductions on a number of different
items.
Assessment Escaped
The question of escaped assessment
on franchise for last year was involved
in the Pacific case. This corporation
paid taxes last year on $640.000 on its
franchise under protest, and has filed
suit against the city to recover the
amount.
In order that the city would lose
nothing in actual taxes If the courts
decided adversely to the municipality,
Assessor Mallard this year included
an item for the same amount as an
escaped assessment.
Attorney Stevens objected to this
method of doing business, as he de-
clared it meant the loss of the use OF
considerable money to the electric cor
poration Under the pre-ont method
the city retains the money paid in last
wear until the courts decide it must
return the money and the lighting
company is compelled to pay on It's
escaped assessment, making double
payment of taxes for time at least.
Mr.. Mallard suggested the matter
could be easily arranged If the Paclhc
Light and Power company would fol-
low the example set by the Edison
company last week, when represen-
tativl of the Edison concern appeared
before the board of equalization and
offered to dismiss the suit in court
for the recovery of franchise taxes
paid under protest last year, provided
the board would cancel the amount
of the escaped assessment.
This stipulation the Pacific company
would not agree to on the ground that
under such a stipulation it would have
no right to bring a similar suit this
year in which other features than the
mere principle of franchise taxation
would be involved.
Attorney Stevens intimated if it was
found the courts ruled against the
corporations on the principle of fran
chise taxation, other suits would be
brought in which an effort would be
made to lower the amount Of the tax
alton.
Bond Issue Considered
In taxing the franchise of this cor
poration Assessor Mallard considered
a bond issue of 81, ,000,0 900 at So cents
on the dollar and a stock issue of S1o,-
100000 at % cents. It was the low
price of the stock, none OF which has
been transferred for many months,
that brought forth exclamations of
surprise from members of the board
and an inquiry as to why 1t was fig
ured so low, that brought the reply
of Mr. Mallard as to H. e. Hunting
toms interests in the corporation.
While the stock of the Pacific Light
and Power company is considered
worth but % cents on the dollar by
the assessor, he has a much higher
opinion Of the stock of the Los An
geles Gas and Electric company, which
also appeared before the board yester-
day.
The stock Of this latter concern he
placed at par plus so per cent. Stock
at $50 was the basis he took in his
faf Of 1aa 745o Of
chise owned by the gas company.
There is $8,0C0,000 worth of this stock,
according TO Assessor Mallard which
he has assessed at one-half
In arguing for a reduction on the
Gas company assessment Attorney
Sam Adams made an admission that
the other public utility corporations
have carefully avoided. He said the
sworn statement of his company sub
mitted the first of the year and the
basis used by the council in fixing
the public utility rates for the year,
was figured at its operating value and
not at its actual cash value.
The figures given on the sworn state
ment are the ones on which Assessor
Mallard bases his figures
When the council fixes the rates for
public utilities it takes into consider
alton the investment of capital and
fixes a rate that gives a fair interest.
On this account it is advantageous to
the public utility corporations to find
as much tangible property as possi-
BILE.
Why They Complain
But when the assessor takes their
own figures and asks them to pay
taxes on 90 per cent Of the amount,
they invariably complain.
The attorney for the gas company
yesterday claimed the assessor had
no right to use the figures in the sworn
statement, as these figures represented
what the machinery, conduits. poles
and lines and other property were
worth to the company for operating
purposes and did not represent it's
actual cash value.
The assessment of the gas company
which amounted to $5,210. 900. Included
$401,0 900 as an escaped assessment on
the franchise last year. a method
adopted by the assessor with ali cor
porations.
This escaped assessment was stricl,-
en- out when Attorney Adams deciared
the gas company had not brought s,,i+
to collect taxes paid last year and did
not intend to do so. AS the time re-
quired by law for bringing such sui+
has expired Mr.. Mallard agreed +o a
reduction to the amount of the escaned
assessment.
Both cases were taken under advise
Inent by the board.
d. p. Luther, secretary of the v
M. G. A., asked for reduction on tho
real estate of the association to $40 00n
and on the improvements to SIS 0O0
A. M. Chanee attempted to have the
board of equalization strike out the