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


creased After such a dividend as Dc
fore, sthe corporation has the title IN al
the corporate property the ageI6sdt0
interests therein of all the shareholders
are represented by the whole NUMBER
OF shares; and the proportional interest
Of each shareholder remains me SAME
The only change is IN tie evidence
which represents that interest, the new
shares and the original shares JoGetnef
representing the same proportional IN
terest that the original shareS repre-
scented before the issue OF the new
ones
Nov. let Us see II we cannot prove
conclusiveIy-so conClUsiTely that he
who runs may read, and the VTaytartnS
man, though a fool. may not err there
in, that the reasoning IN WiiilaTnS Us.
Western Union of Judge Ruger and Mr..
Justice Cray in this case IS true. and
consequently the logic OF my learned
adversary, Mr.. HazletOn, and his dis
ciDies as TO this matter Is false de
said, IN his opening, that I inflated my
self with dreams-dreams Of riches al
most beyond the hope Of Evarlce-Ihat
we were TO enjoy when We cot that lO0
per cent dividend Let US see what &C
tuaIly happened the next morning after
we al pulled ourselves by our boot
straps into this EmpyT5an OF prosperity
Why-the stock that was worth $50 the
day before the dividend was declared
promptly dropped. McGfnty fashion TO
$50 the day after the dividend came of
So we lost on the stock what We made
We uortaIs be- For the stock. plus the
dividend. was worth the day after It
was declared exactly what the stock
alone was worth the day before
Why. then. did We issue those cerIifl~
Gates II their issuance added no value 70
what the property was previously worth.
70 what imperial appraisers said II was
worth, and 10 what Uncle Sans as
SCISSOR ruthlessly assesses It for2
Only Realizing Legal Interest
The answer ought TO be plain enough
10 those who have followed my srgu-
ment- We honestly wanted then. as
now, TO escape from the false charge Of
declaring % per cent dividends 1--WE have
70 do that 10 distribute s per cent per
annum upon the value OF our invest
menD when, IN fact, al that nominal
legal interest on our actually invested
capital
Such a charge is partisanship. pure
and simple-Parthian partnership, al
that-shooung poisoned arrows IN re
treat from untenable ground II does
not rise 20 the dignity Of casutsJry, but
IL does vindiCate my criticism that the
only purpose that can be promoted BY
cation equal 70 the actual value OF the
property IS 10 give verisimilltude 20 q
statement that IS % per cent tue ana
50 per cent false 4 thing that IS letter
true and spirit false cannot be either
politically economically, or morally
profitable. The truth is. this kind OF
hybrid falsehOOd IS at best defensioie
only on the theory that good ITUlL may
Be produced from bad trees y Jne IN
limited use OF manure But this treat
-anr having repeatedly failed, sub
NIT il would be profitable nov 70 follow
the good book-and cut these barren
trees down
To make cur position perfectly plain, I
soIennlv protest that the actual truth Is,
as the proof shows. that the Washing
ton GasEght Company has not clSLTi-
buted on capital account N any one yssI
since 1o1-the year Of the ceTuncaIe
DIVIDEND total OF exceeding 3 per cent
upon he actual value Of the property
used in the conduct OF its business And
has never earned IN any year since
that wear an amount exceeding per
cent uuCn the actual cash value Of its
present investment. as determined by
the Humphreys appralSeTnent. or as may
be determined by 2 capitalization or tne
taxes paid BY x 70 the collector OF taxes
at the rate Of one dollar per hundred
q rate that is largely in excess OF the
average rate assessed upon private prCs2-
erty in the District Of Columbia
Offer to Prove FaitE-
To prove our good faith in this de-
tense. I beg the committee 10 consult
corporation counsel OF the Department
OF Justice 70 see Il our contention here
Is not recognized there as undeniably
To come back 70 the argument Now
honor bright Mr. Chairman II You Ead
a house and lot that cost you SEQ a
years ago. OF say 20 years aZo- and Its
"a I1le had naturally increased 70 three
times its original cost uGcl = was now
actually worth at least S5-QI- according
10 the market standards o. value ulul
the taxes. III fact had been raised upon
a caSe-ff the government OF the people
wanted that property, would you feel
that YOU we're eXactlng an extOrtlonate
profit # You priced il at its present
actual vaIue2
wei. have shown YOU and I an
going to further show you. that the su-
rEsue court says YOU have perfect
legal and moral right to make the GOV
crument OF the people pay you q reason
able rent or return upon ltS present
alUe-irTesDeCJive Of its COSt-buJ that
YOU cannot make them pay you any
greater price by mOTtg7glnE i Tor
part Of its value. for the whole OF Is
value, OF for more than It's value And
thar the court further SAYS There ls
nobody in this country big enough 70
take il away from To-- II whole or II
part, without due process Of law and
inst CoulDelSatiOn--'i the court knows
itself And what is true Of you Is true
Of Us The fact that we happen 70 be
a public utility proposition and you q
personal one, OF q political one cuts
no figure whatever IL the equation
To proceed with Gibbons vs. Mahonc-
page $50 The admitted facts pre-
sent the following sta-e Of things The
accumulated earnings Of the COMPANY
were kent Undivided. and actually added
10 the capital OF the corporation b. IN
resting them from time 70 time IN its
permanent works and plant. until the
value Of the works and plant amounted
10 q million dollars no owner Of par
-fCuIar shares. or Of any interest therein
had the right to COu10el the company 70
divide or apDoTtiOn those earnings. and
while they remained so undivided ana
invested the capital stock Of the com
PAW was increased 10 the same amount
by the act Of Congress Of Nay =, 1S56.
&c
Continuing. the Court q. 559 says as
follows
whether the gains and profits OF a
corporation should be so invested and
ipgCr-ioued as TO increase the value OF
zach share Of stock. for the tenefit or
al persons interested in Il, ether for a
erm OF life or for years. or BY way Of
-e~7aind-r in fee. or should be distrib-
tod and paid out as income. TO the
e-art for life OF for Years. excluding
he remainder man from any DartiCiD1-
ion rEe-in- IS question 10 be deter
mined bv the action Of the CORPORATION
tSelf, at such times and in such man
7er as the fair and honest administra-
ron of its whole u-ODeT-- nd rt--=----r-=