Evening star. [volume] (Washington, D.C.) 1854-1972, 1909-01-05
The Gas Decision.

The decision of the Supreme Court OF
the United States affirming the validity
OF the New York state statute fixing a
price of 80 cents per thousand cubic feet
of Illuminating gas gives announcement
to those who are striving in this Dis
trict to secure from Congress the es-
tablishment Of a more reasonable rate
than that now fixed by law. In view
of the recent action of the House OF
Representatives. fixing the rate at 80
cents, the Supreme Court decision is to
BE read with reference to it's immediate
Bearing On the local issue.
The chief point Of the decision of i'm
portance now and here Is that a rate.
If not grossly unreasonable on its face. is
not to be declared by the court con-
fscatory and therefore invalid until it
Has been given fair trial in practice.
In the New York case the corporation.
on the basis of figures worked out by
the court, made a showing of a profit
Of about 81 per cent. The Supreme Court
holds that the possible increase in con-
sumption of gas due to the reduction
Of the rate to so cents would probably
increase the earnings Of the company with
on. corresponding increase of cost.
rate. It 10 necessary to give the public
an opportunity to use gas at so cents
q thousand, and it is then incumbent
on the company, If DESTROYS of conduct
ing further litigation with view of set
ting the rate aside. to establish afnrma-
tivuly In court the fact that it is i'm
possible to earn q profit of 6 per cent,
which the Supreme Court holds to be
reasonable.
In reaching this conclusion the Su-
prsnne Court Is obviously guided by the
principle of giving the benefit Of the
doubt to the consumer of gas rather than
% the producer. Herein lies the chief
value Of the decision to the local COM
fnunity In Its present effort to obtain a
more reasonable rate. In another point
the decision bears directly upon the local
situation. The court holds that the good
will Of the corporation IL not to be rated
as an asset when the company has a
substantial monopoly of the gas bust
ness" In the New York case. as here,
the monopoly is absolute. The Wash
ington consumer must buy of the WASH
in6ton Gas Light Company and the
Georgetown consumer must buy of the
Georgetown Gas Light Company. Good
Will, therefore. cannot be assessed as an
element warranting the maintenance of
high rates, in order to pay interest, divi-
dend or other profit upon it,
The decision emphasizes the necessity
Of working out some equitable scheme
whereby stock increases when justified
may be permitted by the law without
Infringing upon the right of the consumer
to occasional rate reductions as the cir
cumstances warrant. Just whether this
II best accomplished by legislative or by
judicial processes remains for considera-
ton. The present issue in this District
relates 20 the application Of a statute
already on the books. in virtue of which
the Sas companies are applying for an
iAcrease OF stock. The lower court has
upheld the right of the companies to
add to their capitalization, and the Court
Of Appeals has reversed this ruling, with
an appeal to the United States Supreme
Court now pending. 1t Ia urged that
Coneress. taking cosnisance of the whole
situation. should devise. after careful con-
siderAtion. more satisfactory process of
stock increase for public service cor
pof4tione than that now provided nv Ia "