New-York tribune., 1909-01-05
EIGHTY CENT GASLEGAL
NEW YORK LAW UPHELD
By SUPREME COURT.
Company May Reopen Case, Hosc-
eCer, If Rate ProUes I'm
profitable.

washington, Jan. 4.-Speaking for the entire
membership of the Supreme Court of the
United States Justice Peckham to-day an
nounced the decision in the case of the Public
Service Commission of New York, the city of
New York and the Attorney General Of New
YORK agt the Consolidated Gas Company CT
New York City: which involved the validity of
the So-cent gas law of that city. The decision
reversed the decree of the Federal Circuit
Court in New York in holding the law uncon-
stitutional, as far the Consolidated Gas Com
pany is concerned. because confscatory, and the
injunction to prevent the enforcement Of the
law against the company is dissolved.
The court finds that the valuation of the plant
and franchises fixed by the lower court is
! erroneous in certain particulars, and that based
on actual value the SO-cent rate would yield
probably 51a per cent with the increase
in consumption which would not be conf1scatory.
The decision intmates that If after practical
test the rate fixed should prove to be unremu-
nerative the gas company should have the priv
| ilege of reviving the case The United States
Circuit Court for the Southern District Of New
York was instructed to dismiss the with
out prejudice
The court merely announced its conclusions,
and 1t was stated by Justice Peckham that the
full opinion would be placed hle at some
time in the future Owing to the fact that there
has been much speculation to the character
of the decision Justice Peckham took the pre-
caution of not having the result of the courts
deliberations committed to print The
nouncement therefore was made in typewriter
copies, and there were comparatively few Of
these.
The court failed to pass specifically on the
question of the constitutionality of the law
an entirety, but did pronounce invalid some OF
its features. as. for instance, that prescribing
the amount of pressure to be required Of the
company and that of prescribing the penalties
for violation of the law. In the main, however,
the tenor of the decision to the effect that
the gas company has been premature IN its
prayer for relief in that 1t presented its petit
tion for an injunction before there had been an
opportunity to test the operation of the law. 1t
was stated by Justice Peckham that the COM
pany had failed to make which would
warrant judicial interference before any bona
f1de test had been made under the statute.
An important feature Of the decision is the
finding of the court to the effect that the value
of the franchises of the companies constituting
the Consolidated company, fixed by them at
the time of the consolidation, could be properly
regarded as part of the capital Of the company
for the issuance of stock It pointed out
that the state had never questioned the fairness
Of that valuation. and 1t was, therefore con-
not properly be raised.
THE COURTS CONCLUSIONS.
Following is Justice Peckhams announcement
OF the courts conclusions
FIRST-At the OF the consolidation the
value OF the franchises OF the constituent companies
was hxed by them at ,e0, ana that amount
which IL issued stock The consultation was
has never questioned the validity or fairness of
the valuation Since the consolidation the stock so
valid stock Of the Consolidated company, capital
tzed pursuant to the statute at not more than me
and rights of it's Constituent companies; The state
the franchises at the time of the consolidation.
The meth9d of arriving at the dd OF eneSe k6s 6
tested In the fixing of rates are questions not now
before the court is decided upon its own peculiar
facts
of these franchises made by the trial court at
the time of the commencement of this suit is only
fcient 10 warrant the finding of any increase what
ever over the agreed upon at the consolida-
THIRD-The evidence leaves It in doubt whether
ts business is as great found by the trial
after reducing the value of the franchises TO the
sum agreed upon at consolidation.
FOURTH-But taking the value as found hy the
after reducing the value of the e. % s9
reduction in the value Of the real estate & plants
If not DTe Of Ps ga Would pPo6sbIy In
responding Increase of cost Under all the crcum-
sase with that degree Of ciearness necessary to
the interference of court of equity before
the practical operation OF supplying gas at the |
rates mentioned in the statutes.
FIFTH-There is rule as to any artlcular
rate which any corporation subject to legislative
m the eaS 9Oton on
stances and locality. In this particular case, with
locality where it is carried on. the complainant is
entitled to return, if it is possible of per cent
e Business s Of suppyng Ra aSperS actually used !"
SIXTH-There is discrimination between the
price of gas for the city cents thousand cubic
feet ess than so IS m ess IN m the & case Of
II the amount obtained from the total
10 secure the requisite return upon property it is
all the complainant can require and the question
one in which the complainant have in
sEvENTH-The rate proposed must be with ref
erence to the value of the properly at the time
when en- the rate takes effect The company is entitled
hs at less Sto is II the M general a rIe and there
EIGHTH-Any increased expense arising from
by the statutes was Included SUBSTANTIALLY in the
expenses of the year G9O5 with reference TO which
he inquiry made
NINTH-The provision in the acts requiring a !
v Shows is T. The proof
Die danger OF explosion in the mains or other
hem as they nov are; To eliminate such danger
Squld require strengthening al the mains and
IF many millions of dollars, upon which no return |
'ould De obtained al tEe rates prescribed by the
rom the rest of the statute and the balance there
produce light of the candle power mentioned in
he acts.
;truction of the penalties. 10 their amount etc
uch penalties vsd. but separable from the |
est of the acts and the balance be effectually
'arried out
ELEy EyE3NTIInThs HI is not a case for the valuation