The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1910-05-03

ever I viii before Diminishing TINS point
with the committee : permission, submit
10 IL this further observation IN regard
10 the application of the case IN re-
ton
II this resolution IN i~sct denies to
US what yoS have heretofore granted.
and DO now freely accord to our com
peutors and fellow pubic servants,
apart from the question Of fairness II
IS obviously diScriM in AtOry legislation.
and as such a direct Contravention or
the Constitution Of the United states
and ought not TO receive Congressional
sanction even II there was n IS reason
10 doubt-WhiCh I insist u 4 there IS
not-the legality OF q part OF the com
panys present capitalization
Not Overcapitshzed.
But. Mr.. Chairman. there IS not and
cannot be any legal question about the
bona fdes OF the existing security capi-
talizatiOn OF the Washington Gas Light
~ompany, for the proof IS overwhelming
that il is In truth and fat the most
undercaDitslized public Utii5y in this
country. II not on the face of the globe
IN the name, Mr.. Chairman, Of common
sense, OF all that IS serious, Of good re-
port and worthy OF honest respect and
consideration, how can il be cOntended
mat a company Is overcap italized when
49, testimony IN the case not only tends
70 prove, but actually does prove. that
sOnable doubt from three to four dollars
or assets IN physical property for every
dollar Of securities that are outstand-
ing against it,
This fact once established makes Il
; holly immateriai, in so far as the
public Is concerned. as 7 have already
shown. whether or rot its bonds OF Ger
uhcates were legally Issued. II the COM
pany employs the property IN the con-
duct OF the business, I repeat, that prop
erty IS its Invested capital, and II is
enuUeo 10 have E. reasonable return
upon every dollar Of il. and to have
every dollar OF Il that has never been
capitalized now capitalized IN securi-
ties for an amount equal TO its actual
value, whatever that may be
M Chairman, the language employed
IN al these cases is so simple and d.
rect. 80 plain and obvious: 50 fun and
frank that IL looks like rejecting upon
your intelligence 10 try TO further eluci-
date them With all due respect Il
does seem TO ne that only the V-ilfuIIy
blind can fail 20 see the palpable ap-
piication Of all to the point at issue.
Former Appraisement Cited
Before summarizing our legal postu-
lates. however. I feel that I ought 10 more
formally marshal the law Of the case
and the evidence IN II as TO the value OF
our invested capital First. IN order Of
time, IS the Humphreys appraisement OF
1895, which established the facts 20 the
satisfaction OF prospective purchasers
that the company then had assets Of the
value OF 100000 Next comes the
Humphreys & Glasgow appraiSemenI Of
1893 tten years later, raising The total
valuation 70 $1,000 co, OF which prac-
lcally Sl0.eoCJ0 covered the physical
sworn EtateneEts Of the other public
service corporations here in Washington,
from which II appears 70 be undeuiabIy
true that We a. grossly $50 TO speak
H--- - ~ a.
matter from what point Of view com
parsons may be made. whether. for in
stance, IS 20 the volume Of business
done or the value Of the property en-
ployed, or as 70 the assessment values,
respectively. as shown by the amount Of
taxes paid in each case As I said in
my statement when last before the
committee the comparison Is all the
more advantageous TO the gas COM
pauies because the returns Of the other
public utilities are believed 70 be reason
able when compared with those received
for ike service under like conditions in
the principal cities OF the country, II
indeed there are any cities in the coun-
Try so efficiently and satisfactorily
served Perhaps I ought, also. 10 say
before passing this branch OF the subject
thought that the publication which 7
have made OF the prosperity Of my
ne!ghboFs would tend to produce insensi-
bllry OF their Cner1tS-to make the pub
lie CbliviOus 20 the fact that their sue
cess Is due mainly 10 careful and able
maneg cement. Or which the community
has directly and largely profted.
should not have felt myself justified IN
using their names at all IN this con-
neCIiOn- The truth IS ] should not
have done so under any circumstances
had 7 not been firmly persuaded that
their reports when correctly interpreted
VIII serve 10 bring home 10 your minds
an economic fact that Mr.. Justice
Moody has 50 ably emphasized TO Wit
HaN H---.a
profits thereon are not necessarily hos
tile 20 the public interests. nor fncom-
patible with efficient service.
Actual Value Of Property.
The COrrOborative testimony as 70 val
ues also shows that the actual value OF
the property. as shown By the average
market value Of its securities Is between
twelve and thirteen million dollars
Finally. as 70 all the clements Of value.
7 confidently submit that the question
or the value Of the invested capital Of
the company, which Is the point around
which this case revOiTes, is fOreCi0sed
by the operation OF two well-EnOwn
rules OF law appIiCa bic to such cases
The first lax IS that corporate values
are PROPERTY and taxes thereon are
taxes on property within the Constitu-
ti0uaI provision as 20 taxation Of prop
errv az value As Illustrations Of this
proposition. I beg TO refer you 70
3 T.
States. page IS where IL is held that
II IS 2 cardinal rule that whatever prop
erty IS worth for purposes Of income TO
sell 10 is also worth for the purposes OF
taxation the converse OF which prOpO-
sition must also be true; and IN Gulf,
Sc vs. Hughes, 1S3 United States Re
uo-ts. page Ia Il was held that cor
0orate privileges are property and taxes
thereon are taxes on property within
III. constitutional provision as TO taxa
ton Of property at value. Il was held.
7leo in Railroad. &c. vs. Board OF
EouaI5zeTs. S5th Federal Reports pages
- SO. also in Spring Valley Water
Works vs. san Francisco 124 Federal
Reports. Da-e 51l, that the valuation
OF the franchise for the purpose OF fix
ing rates should not be less than its
valuation for the purpose Of taxation.
II is true this method. although com
petent is not conclusive, but on the
GENERAL doctrine laid down in People vs..
Cours Is y Y, 81. and in many other
cases-thar In matters Of taxation, II
is a sacred duty TO impose the burdens
equal ly''-a duty fully recognized by the
Federal constitutional must be obvious
that this method Of appraisal is entitled
IN q high decree Of respect and conf
Eauce But IEere Is another legal meth
% Of computation that completely VeTi-
Fes the Correctness Of the Humphreys
valuation, both of the tangible and in
tangible assets OF the COmpany-a meth
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