New-York tribune., 1908-03-13
GAS CASE FIRST TEST
JtLT4TFON OF FR4NCHISE
anpcoT Viii Determine NcsC Point
IN Rate Regulation

v 2 Burr Assistant Corporation Counsel VINO
aa handled FOR the city all the litigation win ths
cas- companies years and is perhaps more
<s-7iliar with the status tho sa-ceut sas case
nan any Of the many counsel Including those ~
- Pt,bIir Service COMMISSION who have been de-
.p,,Jine the Law feels much encouraged over the
situation resulting from final decision of Judge
77oprh Of the United states Circuit Court
The city has woa out every point, ne SAT-
,e-te-Sfav except as the right Of the company
% demand a return on franchises for which 10
legal Payment has been made. and its fght 10
,,srSe up the Of reproducing the plant rather
-aan the OF construction on the present value
The settlement Of this franchise point by the
highest legal judicial tribunal in the land is con
ei7e-es as Of the most reaching Importance as
q Is the FIRST in rate regulation where return
X demanded on franchises which concededly do
,7t represent any legal investment As Judge
Rough says it is Of the greatest Importance
70 Tie whole country. transcending the mere ques-
--au al stake the Sl-Cent gas litigation
as soon as the Consolidated Gas Company en-
t.rs the decree OF Judge HoUgh. for which they
have ten days. the defendants-the city and the
T'-hiic Service CommissioT-vil file d notice Of ap-
peal 70 the United States Supreme Court Mr Burr
VIII ask OF the Importance Of the case IT
- specially preferred the calendar, but 1t can
not possibly be argued before Dctooer The prepa-
ration >of the case on appeal VIII be stupendous
task There are seventeen volumes Of twelve thou
sand Taees OF the record be printed alone
IL. Burr said that the general public mas 4
wrong impression OF the decision OF Judge Hough
in thinking that he passed finally on the right OF
The cgTlrarv 10 include SIS franchises in the as
so-s on which il may demand & return In his
first opinion Judge Hough said;
I md that from the gas business humanity Ger
tan 10 done by The complainant under the act
would not be less than 8 oS9,etl upon capital Of
rangible assets Of $47.oIet-e- This finding allows
rrsT6ing 70 Increased sales cheaper price. L
thus appears that The complainant under the legs-
laIive reduction can earn over per cent upon the
presentation OF its investments in tangible prop
thiuk this return sufficient TO satisfy the law
II his decision he adds sSS+35 the tangible
assets which had been left through mad
ver1ence. but the increase woul5 not materially
range MS deductions.
REGARDING Intangible property. franchises.
Judge Hough said his first opinion:
E-nder this branch of the discussion the most
IMPORTANT and novel question Is whether public
-s <-s-eises 70 the assets from Which fair re-
--l-9 NAV te lawfully demanded. original
proposition believe this claim unsound-
II his opinion o. Wednesday Judge Hough en-
rlasfzes the importance o. this IL denying the
motion 10 compel the company 10 accept an s4-
aer- rate have the case dismissed He said:
The making of tie motion presupposes the pos,
zffIi-- Of the complainant yielding the proposed
pressure. and this would prevent settlement in
only court which can settle II OF me QEeslioh
.-es-ion IN which I respectfully inriTated my own
,sry hereto.
The Consolidated Gas Company originally claimed
return on assets Of sIGl .G1eGo This reduced
~ arthur Il. Master special master 10 ssS fs'oes
4-5 Judge Houeh further reduced them TO $5a.-
e So including 47.SSl4S5 Of tangible and sl20oe"
Il intangible assets The company demands a re
r-l-7 q II Per its tangible and intangtble
assets The company also asks that its eight hun
,-=5 miles Of mains. carried on the books al
8 90 - shall be valued a. s12C91c0O because the
latter <g7Ire Is what 81 would reproduce
them owing u rhe large amount Of money spent
~ -he 1zxpa-ers in putting down asphalt ana
other permanent pavement