The Washington herald., 1908-02-07
FRIDAY. FEBRUARY Z. 1905.
A Good showing for Cheaper Gas.

We congratulate the washington Gas
light Company on the splendid showing
Of its annual report, rendered under the
terms Of the La Toilette amendment for
the calendar year 19O7-the first compre-
hensive and ineligible annual statement
ever sent by this corporation 10 Congress.
It appears to prove conclusiveIy that the
eompany's net income fully warrants
either one Of the following three courses
Of action;
l. An increase in the capital stock.
? An increase in the dividend rate on the existing
capital stock.
g. A decrease in the price OF gas.
The company itself has elected to take
the first Of these courses, as it may dc if
the value of its plant exceeds the par
value Of its outstanding capital stock and
Indebtedness, and judicial proceedings
have been initiated, as required by law
70 determine the value of the plant with
view 10 increasing its capital stock TO
'such an amount as shall be equal to
the present cash value of the plant and
its proposed enlargements."
The District Commissioners. however,
have set up the plea, in which they have
the hearty support Of this paper, that
the price of gas to the consumer should
be reduced. if such reduction be possible
without an unreasonable impairment of
the gas company's earning power II has
been urged that an increase of the COM
panys capital stock would furnish an
excuse for refusing a reduction in the
price Of gas, the usual corporation ground
for opposing decrease in public charges
being that it will impair dividends and
cOnhscate the property Of stockholders.
It has been assumed that an increase in
capital stock and a decrease in the price
Of gas were incompatible. We are by no
means sure that this is true, considering
the present earning capacity Of the COM
pany and the value of the plant. and if
the price Of gas were substantially re-
duced there would be probably little
ground for opposition TO a reasonable in
crease in the capital stock and placing It
on a new dividend basis
However this may be, on tie company S
own showing the price Of gas can be re-
duced 10 IS cents without impairing its
dividends or its repair or depreciation
accounts. and with economies in opera
Jion and increased consumption, we have
no doubt S5-cent gas would show a sur
plus at the end of the year Referring
TO economy, what is there about the gas
business in this town that requires the
expenditure of nearly $4,000 a year for
legal expenses?
Tha rrroffp eor7-io, ,o,,,v7f--f-,, NJ
York City has figured that A-cent gas
would yield the Consolidated Gas Com
pany S per cent on the par value of the
capital stock Of the company, represent
ing its actual investment, including an
allowance Of Sl2OOOOo for the value OF
franchise, and that. emitting the franchise
item, So-cent gas would yield over per
cent If S0-cent gas viii yield a good
profit in New York. why not in Washing
ton? As We have said. the gas compauy's
own report proves that S5-cent gas would
pay 10 per cent dividend on the com
panys capital stock. and an average of
nearly 6 per cent on its outstanding in
debtedness. Doubtless a closer inspection
Of the company's financial condition
would show that 50 or even 70 cent gas
Will yield a fair profit on a reasonable
capitalization.
This subject is one to which the Dis
trict committees of Congress should give
immediate attention, They now have the
gas company's report before them-a re-
port showing that the company expended
out Of its earnings over $4,000 in extern
sions Of plant-that is, in adding TO its
capital-besides carrying $4,000 to re-
newal and depreciation account. and
closed the year with a substantial surplus
Of SlS9.2So On this fine showing the COM
pany proposes to increase its capital
stock-to cut a melon. as the brokers
say-withOut any regard to the lust pub
lie demand that the corporation should
share its extraordinary prosperity with
the consumers who have contributed so
largely 10 its development Whatever
may be the company's motive in moving
for an increase In its capital and we ad-
nit the motive may be. in part. at least,
legitimate, no increase should be permit
ted until the company has consented TO
make a reduction in the price of gas.
We have no doubt whatever, since exam
ining the COmpanys annual report that
a substantial reduction in price may be
made without doing the smallest injustice
TO the stockholders or importing in any
way the efficiency Of the plant