Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-04-29

pound Of coffee a full-grown cabbage, a
few mouthfuls of pork or a glass of rot
gut whisky! Indeed. when you reflect that
the average price paid by all our consum-
ers something like $4,000 OF them in
round numbers) is less than 10 cents day
am quite sure you will not need further
evidence to prove that our charges are
reasonable and not eXorbitant, and that
our goods. measured by what Mr.. Justice
Harlan graphically defines as fair value
in themselves" are reasonably worth
what we ask for them.
III there be any sort OF doubt left, how
ever. compare the price of gas under cor
porate management with anything we get
In washington under municipal manage
ment. For instance, the price Of water;
lot-owners and the taxpayers furnish the
plant (two-thirds Of it, at least. including
the mains laid in the public streets, one
half Of which the adjacent proprietors are
assessed for-wflly- nily-whether they
take water in theirs or not. The mu-
nicipality pays no taxes, as in all munich
pal propositions, and is, comparatively
speaking, at little cost for administration
assessed, even at wholesale prices, over
30 cents a thousand for every foot OF wa
ter used. Which is cheaper. all things
fairly considered, gas or water in WASH
ington3
Returning to reasonableness of prices:
| want to emphasize what have already
said. that 1 have been speaking of rela-
tive values only, demonstrating. ] am
confident. beyond the power of successful
contradiction. that gas is among the
cheapest things. il not the very cheapest
thing, on earth: but not arguing that it
may not be sold still cheaper in the flu
ture. We are not wanting (whatever may
be said or thought to the contrary in
sympathy for our friends and customers,
nor attempting to minimize their equities.
That would be ungenerous. silly and
shortsighted. Looking at 1t broadly and
justly. our true interests and theirs, as
Mr.. Justice Moody has 50 ably shown.
are one. Nevertheless, all of us should
realize what 1t is that regulates the nat
ural law as well as the law of the land as
to reasonableness of rates That depends
ness per se-depends upon its cheapness
relative to the value Of the plant. mate
rails employed in the process and the con-
ditions under which it is produced.
Legislation Not Essential.
Gentlemen OF the committee, you may
make at least some Of those conditions
favorable or unfavorable to economic pro-
duction according to your pleasure. But
in all frankness, the legislation you are
now considering Is not calculated to pro-
mote the contamination devoutly to be
desired.
To intelligently and fairly deal with this
question you must not only diSabu your
minds OF bias in regard to 1t. but you
must qualify your ability to fairly pass
upon 1t by ascertaining to a reasonable
certainty the basic factor in the equa-
ton; and that is, not what the profits
are or may be in themselves. but what
they are relative to the actual value of
the plant used in producing them. For
as Hamlet said Of the play, That's the
thing. And / may truly add that is the
lvv hfnc 1ac,f 1xrcS ,t.
reasonableness can be either fairly or
legally predicted.
Unfortunately, there Is no longer a way
by which this basic fact, the value of the
plant, can be judic.ally ascertained at
present There was a way-a sure and
simple way. 1t is believed; a way safe
guarded by the Supreme Court of the
United States. But Congress, IN it's wis
dom, thought proper, as we have already
seen, to fOreclOse it; and we are forced
to other methods Of appraisal, which. in
part. have already been glanced at but
should be more particularly pointed out
TO you perhaps that you may fully I'M
derstand that the company has endeav-
ored in good faith. for the benefit Of all
whom it may concern, to furnish you
with the best information obtainab BILE upon
this vital point.
Last summer. gentlemen of the COM
mittee. agreeably to suggestion from
the interstate commerce commission, as
L explained to you at the last hearing,
the company concluded to employ the
most competent concern it could find to
inventory and value its properties. That
concern. as YOU have seen, was the well
known firm of Humphreys & Glasgow,
who, with the assistance Of five or six
of the best qualified of our local bust
ness men, made an impartial appraisal
of its assets: the net result of whose
labors duly appears in the statement of
the company for the fiscal year just
ended. To make their finding doubly
sure, the company had them all care
fully reviewed by the American Audit
houses in it's line of business in the
world-for it enjoys an International rep
utation. You have the result of all of
their labors before you, and l am not
going to devote any more of the time
allotted to me to their findings other
than to confirm them by the testimony
of the law of the land applicable, as we
shall see in such cases.
Entitled to Appraisal
/ have, therefore. no hesitation what
ever in again submitting. Mr.. Chairman,
that we have established certification
that entities our appraisal until it shall
have been successfully challenged to your
unqualified confidence and respect
We have gone into the matter of this
appraisement more at length than we
OtnerWlSe SnOulQ nave done because 1t
unquestionably involves, 1 feel justified
in reiterating, the basic question on
which the whole case rests. For II the
apprafsement of the plant exclusive of
the franchises, is to be taken as SUBJ
stantially correct, it follows that the
company is entitled to a rate for it's
product that will yield a reasonable re-
turn upon a tangible value basis that
is nearly 400 per cent greater, and upon
a going value basis over 500 per cent
greater than the face or par value Of
it's stock. In other words it follows, as
the night follows the day, that 20 per
cent dividends on the stock is in legal
intent and effect only dividend of five
90 per cent upon the physical property
and less than four a. per cent upon the
entire property of the company used by
it in the conduct Of it's business. That
fact, if it be fact, Individually estab-
fishes the company's legal right and title
to be released from the burden of this
resolution unless it can be shown by
somebody that there is some reason to
doubt the rule laid down in Chicago, Mil
waukee and st. Paul presently to be
analyzed). in Gibbon VS.. Mahon (here-
vs. Williams Repeatedly cited and af-
f1rmed by the Supreme Court OF the
United States), that every public service
corporation has a legal and moral right
to a security capitalization, either eX
pressed or implied, equal to the actual
value Of it's property, of which it cannot
be properly deprived without due process
IF law.
Noted Decision Cited
r, c,,pport of this contention T hoo 70