The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1910-04-05

trying to ind out whether the gas COM
panies are charging too much Tor their
gas. Do you know anything about lne
capitalization and surplus. and so forth'
OF the gas company here?
Mr.. Humphreys-Yes sir
Mr.. Coudrey-What was their original
capital?
Mr.. Humphreys-WeII, could not tell
you that, because that goes back into
ancient history, although l could tell
you from papers that have, from my
books.
Mr. Coudrey-Are you gas expert,
and have you handled. in any way, teelr
Mr. Humphreys-Of the gas company,
do you mean2
Mr.. Coudrey-Yes.
Mr. Humphreys have handled every
branch Of the gas business, sir.
Mr.. Hazleton-But he means OF this
company
Mr. Coudrey-I am only speaking of
this company in Washington.
Mr.. Humphreys-In my Investigations
for them in past years. and in my In
vesugations for people outside of Wash
ington. l have Investigated all branches
OF their business, and am qUahhed 10
do SO; and l nave had charge Of all
branches Of the business.
Mr.. Coudrey-It is not a question OF
qualification, but what 1 want TO get at
Is this: This resolution calls for an in
Vesugat1on Of the gas Co pany here,
and what We want TO know is whether,
in your opinion, you can say yes or no
as to whether the gas company here Is
overcapitaliZed or not.
Mr. HumphreyS-At the present time2
Mr., COudrey-Yes. sir.
Mr.. Humphreys-It is decidedly under
capitalized, and there is not the slight
est question about IT,
Mr.. Coudrey-How about their profits?
Not EZtravagant Profits
mi.
agant by any means; and, furthermore,
their statement underestimate their ex-
penses; in other words, their profits are
Overestimated, in my opinion.
Mr.. Coudrey-Do you mean that their
statement does not give q true state
ment Of their expenses2
Mr.. HUmphreys-T'rue so far as thew
believe, but, OF co arse, I differ with
them as to certain additional items
which go into expenses.
Mr.. Coudrey-WLat ger cent did you
make on tEeir capital last year?
Mr.. HUuIphreys-i VIII have 10 figure
that out. il you vii pardon me for a
moment According &C Uneir statement?
Mr.. Coudrey-Hes; I want 10 see
whether you agree with them on the
figures OF not
Mr.. GoldsborouEh-Also, doctor, II you
have the references convenient there
viii you please give the value of the
property
Nj Coudrsy-Have you the printed
statement there that they have iIsLcd2
Mr.. EUmrhreys-Nes.
M 'aze-tOn-It Is the report that
they bound 10 make by law.
Mr.. .. rre-It has to be made under
oath.
Mr.. There is no ques-
ton about TIE accuracy o. the figures
Mr.. COudrey-Is there any way by
which We can get the original capital
Of the gas company
Mr.. Goldsborough-I can tell you tnat
II was originally $1,000.
Mr.. Coudrey-How much more money
have you put in2
Mr.. GoldsbOrOugh-It would be hard
10 make statement Of just the amount,
but the fact is undoubtedly true that
very large part Of the capital that has
gone into betterments was derived from
profits.
Mr.. .Coudrey-For instance, in addition
10 this $1,000 do you know how much
more actual money hes gone into the
plant2
Mr.. Goldsborough-I know that ssH0. 600
went into il about four or i've years
aIJer the company was first started.
Mr.. COudrey-Weu, that is $500. 900
How much more2
Mr.. Goldsborough-I could not tell you
accurately how much more, but as the
representative Of the company I have
no hesitancy in saying that large part
OF the capitalization was derived from
earnings that the company has been
permitted TO make by law under statu-
tory regulation.
Would Reduce Earnings.
Mr. Humphreys-The capitalization as
stated here is s. 6o0, 90. paid UP. with
dividends and indebtedness Of s.. 500 600
and improvement bonds OF S59s. 900 or
practically 100000 So we can state that
the capitalization Is S5.60l.oJ0 The net
earnings were S6i7.O00 1 should prefer
to introduce a correction there and re-
duce the earnings quite a little, because
1 do not think that the amount which Is
put IN for the accruing liability on &C
count OF depreciation is large enough.
But, even taking ii from their state
ment, they earn on this capitalization
about Il per cent. almost exactly that
Mr. COudrey-H0w much o. that CAPT
talization is, you might say. water?
Mr. Humphreys-None at al, sir
Mr.. Coudrey-None at all?
Mr.. Humphreys-Abs none.
Mr.. CoUdTey-SUppose you make
money. then you increase Jour capital,
as 1 Understand IL, but the water
Mr.. Humphreys-You vii. have 10 de-
fine lust what water is. Water. TO my
mind is capitalization which is not rep
resented by actual kdlue. d.lQ especially
not represented by physical property.
Now. all Of this Capit83.za-'on Is far
more than represented by ,tu&I plant,
by NY firms appr1isement. 81. instead
Of there being water, this capitalization
is more than repres ented by actual live
assets There is no water. but tfere is
a surplus. and that is where this sur
plus comes in TO which these men have
referred and which has been already
Invested in plant.
Mr. Coudrey-DO you know how much
actual money has been put into the
Washington Gaslight Company? 1 do
not mean out OF the money earned, but
other moneys?
Mr.. Humphreys-That I don't know.
Mr. CoudrCy-Of course, they earn
money every year; but If they are earn
ing abnormal profit then we ought 10
know it. that is all.
Mr. Humphreys-Of course, upon that
you would have TO make an tnVesuga-
ton for every year. Now, as 70 these
abnormal profits, as to whether there Is
any, TO my mind there Is none unless
you can ind some extreme case Of great
surplus earnings due TO excessive prices.
I have in the past looked over the prices
with that of other cities, and, of course,
have been familiar in general way
with the Washington affairs as TO the
gas business for the last thirty years.
Washington has never had a reputation
for charging a high price for gas If
company should decide that IL will not
give out all its earnings in dividends, but
satisfy its stockholders by a cOnserva-
tive dividend, and place the balance in
cans. in the past certainly. have CON
cidprp7 good management and that iS