The Washington times., 1909-01-12
DECISION AFFECTS
WASHINGTON GAS
Action of the Supreme Court
Causes Satisfaction
in Capital.

The people or Washington, who are
fighting for cheaper and purer gas and
who have won su initial victory in
the passage Of an Scent gas bill by
the House, can derive much satisfaction
from portions o. the decision OF the
United States Supreme Court, which
Fas now been handed dow1 in fun, up
holding the constitutiOnality OF the New
York S0-cent gas law.
The analogous contentious of the Con-
solidated Gas Company of New York
and the Washington GasIlglIt Company,
each bent upon perpeJuatiug a 81 per
thousand rate, are such as to make
applicable 81 many of its phases to the
present gas situation In the Capital the
Supreme Court decision. That an So
/ cent law for Washington, under existing
! circumstances. would not be held con
dscatory by the court Of highest resort,
/ is indicated by its decision in the Con-
/ solidated case.
What Decision Means.
/ in the fun decision, handed down by
I Mr. Justice Peckham, the Supreme
/ Court enectually disposeg Of the plan
! prevalent in gas monopoly circles both
+ here and in New York TO place an eS-
/ aggerated value upon franchises and
real estate holdings 1t viii be recalled
/ that the recent stock imitation scheme
u the Washington Gaslight Company,
which has been consistently fought by
/ The Times, had as its basis a purely
/ superficial valuation Of the gas com
pauy's franchise In Washington and its
increased real estate holdings.
on a propaganda OF this kind, the SUI
/ preme Court thus holds.
/ because the amount of gas supplied
has increased to the extent stated, ard
the other and tangible property of the
corDoratious has increased so largely in
1 value, is not, as IL seems 10 us, any
/ reason for attTibuting Ike proportion
/ al increase iu the value or the franchise
Real estate may have increased IN
value very largely as also the personal
property without any necessary increase
I in the value of the franchise. Its past
value was founded upon the opportunity
of obtaining these enormous ana eAces-
sive returns upon the property OF lAe
/ company without legislative interior
/ ence with the price for the supply OF
/ gas: but that immunity for the future
/ was. OF course uncertain, ana the mo-
uant IL ceased and the Legislature re-
/ duced the earnings 10 q reasonable sum.
J the great value Of the franchise Woul1
/ be at once and uufaVorably anectCdr
+ but how much so - IS not possible loI
us now 70 see.'
Its Interpretation.
/ THE INTERPRETATION Of this clause is
/ that. had the legislature seen III 20 AZ
/ low the perpetuity Of the unreasonable
/ 81 rate. the company might We'll have
! insisted upon au exOrbltant valuation
/ upon lts franchise. in view OF the TACT
/ however, that the New York Legislature
/ reduced the gas rate TO reasonable
/ one. the company IS forbidden the prlFi-
/ Iege to rely upon it's former excess earn
/ inEs, and the value Of the franchise de-
! creases accordingly.
/ In washington attempts were made
/ 10 grossly Oyercapitaiize the stock OF
I the gas company on this very asSGInl-
. ton that the franchise was valuable
/ one and that the amount thereof snOilR
/ be included iu the capital stock mus
/ anrCrdIug the monopoly am opportunity
/ TO pay dividend upon the original Eltl
/ of the city, or upon so much water
/ This plan. together with the plan 10
/ include the present value OF the plant
+ lu the Capitalization scheme. has been
/ enectuaIlv knocked iu the head here boy
the passage OF a bill repeating section b
1 Of tie act OF 1896. which contained "a
/ "ioker' permitting such stock mauipu-
/ That an investment i'm gas COM
nauy is not the hazardous risk that
/ the m0nOpOlists WouIa have one be-
. HeEa the Supreme Court makes plain
/ In fact o. seems 20 regard the risk as
/ being reduced To "a minimum, IN that no
city would suffer the tearing tp or its
/ entire street surface lu order that o.
. competing company might lay IT'S
mains The Supreme Court along
This line. lu lXluE the return 20 the
/ Consolidated at per cent, holds
Risk at Minimum.
'Iu an investment ia a gas company
such as compIaiuauts. the risk is re-
+ Eu-aF almost 10 "A minimum IL is "a