The Washington times., 1909-01-05
Supreme Courts Ruling
Practically Assures Drop
in Prices Here.
MAY EVEN BE HAD
FOR SIXTY CENTS
In the New York Case the Courts
Found Company Was Making
Enormous Profits.
Bv 7. c. WELLIvER.

The decision Of r. United States Su-
preme Court in ,As Consolidated Gas
case. from New Yorl- city, is the most
encouraging development since The
Washington Times started the fight for
cheaper gas and proper regulation Of the
capitalization OF the Gas Monopoly OF
the Capital City.
In fact. It is nothing less than an In
d0rsement by the highest court of the
series OF contentious which this news
paper for nearly two years has been
urging. in season and out. as the basis
of a proper reEulative policy for Wash
inEtou.
The washington Times has from the
beginning contended that no allowance
Tor good VIII ought 20 be made, Ia
fixing the proper capitalization Of
public service corporation enjoying
monopoly, as does the gas interest Of
Washington, and as does the Consoh-
dated Gas Company. The Supreme Court
says exactly this.
The Supreme Court holds that under
the conditions in New York 6 per cent
IS a fair return on capital thus invested.
Cuts Huge Melon.
The washington Gas Monopoly pays
10 per cent dividends, distributes an inn
mense sum ia exorbitant salaries, and
then has TO cut huge melon every few
years in order to get rid OF its swollen
earnings.
In short. the Supreme Court clearly
points 10 Congress the way, and pre-
sents the final arguments in support Of
The demand, 10 do justice TO the people
OF Washington,
one of the most important things in
dicated by the New York decision Is
the necessity of repeating section 8, or
the gas law OF lSg5-the imitation act
The New York decision makes addition
ally clear the danger Of permitting the
Gas Monopoly under color and author
-ty Oi law 10 a6d an immense amount
10 lis capitalization. For, says the
courts memorandum ia handing down
its decision;
Before the Courts.
The method Of arriving at the value
OF these kind Of franchises, and how
they should generally be tested in the
fixing Of rates, are questions not now
before the court, and are left unde-
c.ded."
This means. applied TO the Washing
ton case. that no rule is laid down for
ValuIng franchises. 1t wiz be recalled
that the auditor serving as master
Tor thu court 10 determine the value
OF the property OF the Georgetown Gas
Company placed the most liberal vaIua-
lion on franchises. II was hoped that
the New York case would bring some
decision as U the method OF determiu-
ing these values. Tt has not done so.
and, therefore, there Is yet me serious
danger that the excessive valuation per
mitted by Auditor Payne on fran
Chlses might yet stand the test OF
court trial, unless the present law be
repealed. Auditor Payne placed among
his items OF valuation. however. good
will" which must be cut out In view Of
the New York decision
again. The danger OF allowing sec
ton % stand until a valuation shall
De made under lt, is indicated by
Ieading or Jhls paragraph OF the courts s.
language:
The consolidation was effected nur-
Euant 20 the State statutes. and the
state has never questioned the validity
or the fairness OF the valuation IRE
IerTlng 10 the valuation placed on the
franchises when the consolidation was
efected.l Since the consolidation the
stock so issued has been dealt in up
20 the present time as valid stock OF
the consolidated company capitalized
pursuant 10 the statute, at not more
than the lair aggregate value Of the
property, franchises. and rights OF the
consolidated companies"
Could Be Inflated.
II is thus made clear that the law in
force at the time Of readjusting the
capitalization OF a company IS certain
10 have great weight with The court
IN determining me legitimacy OF that
CONTINUED on Second PageJ