Evening star. [volume] (Washington, D.C.) 1854-1972, 1909-01-05
LOCAL FINANCIAL NEWS.

The effect Of the decision Of the United
States Supreme Court In the case OF the
Consolidated Gas Company OF New YORK.
which was rendered yesterday, is believed
to be traced in some degree In what was
done in gas stock at the meeting OF the
local exchange yesterday. The decision
did not become known among the brokers
until the regular call had been finished.
when the figures representing the higher
recent level REACHED by this security were
put in and the stock was passed without
any trading
After call. however, it developed that
at leas; one broker was anxious to sell
stock, and the result was that some 300
shares changed hands, and just half of
that amount at S. which was two and
one-half points below the bid price as re-
corded during the call. Before the close
there was a recovery, and the last two
lots sold for 20.
Today the bidding began as low as 661a.
the principal dealer taking the lead, and
gradually the bid advanced and the ask
ing price came down, and the first sale
or the day was made at g. The subSe-
quent transactions we're made on an as
cending scale. the same broker taking In
most of the offerings, while the selling
was more general.
Altogether some 300 shares were dealt
in. and more than half of this total sold
at the highest price of the day, which was
6SL.
AT the close the bid was on that level
and the asking price was 50. 1t was only
natural. in view Of the interest taken in
this security. both from the standpoint of
speculation and of investment, that the
decision, In so far as it affected the local
company and foreshadowed what possibly
might be the Judgment of the Supreme
Court. attracted a good deal of attention,
and current inquiry was to be heard in
financial circles as to its meaning in this
particular.
1t was pointed out that the decision
did not directly touch upon what is con.
sldered a vital issue in the local ques-
ton. and that was as to the right to in
clude in the valuation of the property
of the gas company an estimate of the
value of the franchise of the company.
Such an item was included in the esti-
mate of the property of the New York
company, and the Supreme Court In its
decision takes the position that as the
state authorities did not object the val
uation could be accepted.
In the instance of the local company,
however, the District Commissioners did
object to the inclusion of franchise value
In the appraisal of the value of the
property of the company. and the inter-
esting question is raised as to what
would have been the influence upon the
decision If the New York state authori-
ties had made a similar objection.
some of those concerned In the market
course of gas stock are Of the opinion
that the decision is favorable to the local
company. or. rather to its side Of the
case now pending before that body. Ac-
cording to that view the essential point
affecting the local situation in the de-
cision is that the company has the right
to per cent return upon all its property
used in the making and the distribution
of gas, and which does not include good
will
From that the conclusion is reached
that the contention of the local company
is that its capital stock ought to repre-
sent the value of its property, which
was appraised. including the value of
the franchise. at about $15.OOO.OOO. Fur
thermore. it is claimed, the company
would have right to make such a
charge for gas will enable it to pay
to stockholders per cent.
There is another phase of the pending
local case, and that is whether or not
Congress had the right to grant to the
District Court what Is termed as a leg.
islative function in authorizing that body
to determine the value of the franchise
and of the property of the gas company.
This point was not, of course. touched
upon in the decision Of Yesterday