The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1910-04-29
BOARD OF INQUIRY
CONCLUDES HEARING
Review of Testimony Com
menced By Richard
GOldSborough.
SANFORD WHITWELL
IS LAST WITNESS
Assistant Secretary Tells of Fihan-
ciaI Operations OF
Corporation


from M Godfrey. stated that he had
carefully prepared a statement showing
the gross earnings, the net earnings
The fixed charges, and the dividends
annually since 1885, or twenty-fOuT
years also showing the percentage OF
earnings TO the book value OF the in
vestment for all of those years, but
had not computed the percentages
earned upon the value OF the plant,
which was largely in excess Of the book
OF cash value lie explained that
Humphreys and Glasgow appraised the
appreciation on book value in 1895 to be
100 per cent above cost. and that the
New York syndicate for whom this
appraisement was made thereupOn Of
fered $4,000 for il, although the book
value was less than S5.J50gLo. He said
the earnings applicable 10 dividends on
the stock averaged II-S1 per cent, on the
book value $50 per cent, and that that
would equal probably about s per cent
on the actual value that during the
rwenty-f0ur years the company had
paid a scrip OF certificate Of indebted
ness dividend OF 100 per cent, declared
IN 1903
Mr. GoIdsborouEh asked the witness
whether that dividend made the stock
holders any richer. 0Ir- Whitweu re-
50 per share In an evidence OF debt due
practically by himself TO himself
8Ir- GoIdsborouEh-Can man make
himself richer by issuing notes TO him
self or selling his own notes secured
upon his own property 10 somebody OF
anybody else at par OF BY cashing his
own notes.
Mr. WhitweII-I think not
Nj tSCIdsboTOuEh-A man who owned
oue-teuth of the stock got certificates
for $4,000. but his stock was practIc-
ally mOrtgaged for that amount. was It
not. so that he was not substantially
any better of than before, was he2
1Ir- Whirvel-SO, sir He simply had
an evidence of the appreciation Of his
Investment. and that's about all there
was 10 IT.
In answer to Mr. RothermeI, M
WhitweH explained the theory Of de-
probation, which justified charging Of q
certain amount annually TO cover losses
occurring in that way by wear and tear,
&c, Teuarki1g that the company had
adopted a very conservative basis for
meeting that requirement OF the Inter
state Commerce Commission.
The chairman announced that the
hearing was concluded. and invited Mr.
GoIdsborough TO begin his argument
Mr. GoIdsboroush-lIr Chairman and
Gentlemen Of the Committee
Pledge Of Loyalty Of Companies.
I want 10 say. Nj Chairman, IN the
outset, that, be this as IT may, be your
attitude toward us what il will. the
companies I have the honor 10 represent
viii always be, as they always have
been, your faithful and loyal subjects
] want 10 say again that we do not
Jeguty Of your purpose toward US that
II IS now and ever viii be unthInIabIe
10 our minds that YOU or any Of you
would If you could, Intentionally de
grade OF destroy US We do not profess
Gentlemen Of the Committee. to be eth
e. infalIibIe or iupeccabIe, nor. pretend
10 be above criticism OF correction ~ e
have no special privileges TO plead and
whereof We stand accused we are ready
20 be tried, but, with all due respect TO
its distinguished author. We confidently
DO submit that we should not be com
PEELED To 90 on trial, in any case, upon
an Indictment stripped 10 the buff
that's wat the bin is that charges no
offeuse- What crimes have we commit
ted ar Chairman, TO justify the dras-
tic punishment proposed TO be inflicted
upon US In and by this measure2 How
can We defend 1t by any other plea than
not guilty Of the things whereof we
have been charged outside OF these
COTTidOrS-thBG by begging you TO
patiently lend Us your attention whilst
] address myself TO facts that have
elsewhere been put in controversy. and
10 hear me with judicial mind that
the truth may set Us free
Briefly summarized, then, Gentlemen ~
the Committee, the reasons. as we under
py me ADVOCATES Of the proposed meas
GTe- 10 justify its passages, are as fol
Because. Il is ALLEGED. there 4z ovi-
cence tending 10 show
l. That our predecessors in Office
ana title destroyed the books something
Ike generation ago and therefore we
cannot Satista ctOriIy prove tba+ ~
material part of our investment -
ever actually paid III TO the COMPANY
bv its stock holders
. That the profits Of the business arc
clt OF proportion 10 the actual cost OF
The property and therefore excessive
3 IIaL our rates are eXHrbitanIIv
high, whether measured by actual C0ST
Iy inherent value, OF by prices else
where
& That the Washington Gasli-ht Com
I.auy i already overCapitallzed-
= That i = believed TO be immoral
and InequIta1le, from a public point OF
view for public service corporations to
invest and reiuVeSt profits into better
lueu-, 5r 20 predicate rates upon tneiI
value when thus IN effect capitalized:
Proponents Proposition.
e. And finally. because Il IS more OF
less seriously claimed by the proponents
of this proposition, that even physical
assets cannot be capitalized either Oh
rectIy or indirectly. BY a public service
corporation without an invasion Of pub
lie rights In other words that caoi-
tsI'zaIiOu. whether true or false 81
1ecsSssrily Involves the public equities
y 10 rates that its enlargement IS
against public policy. and should bt
legally prohibited. although the com
pany. In effect, IS thereby denied the
equal protection OF the laws guarantees
10 all-the artificial person. as Wei IS
The natural DersOn-of which none may
De deprived even BY Congress itself
without due process Of law
1Ir Chairman. this IS the case, and