Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-05-03
Opposition to Pending Resolution
Based Upon Court Decision.
HELD TO BE UNCONSTITUTIONAL

versary; Mr. Hazelton. and his disciples
as to this matter is false. He said, in
ms opening. that 1 inflated myself with
areamsIdfeams of riches almost beyond
the hope of avarce-that we were to
ENJOY when we got that 100 per cent
| dividend. Let us see what actually hap
pened the next morning after we all
pulled ourselves by our boot-straps into
| STOCK that was worth $S5 the day before
the dividend was declared promptly
oropped-McGint fashion-to $62 the day
after the dividend came off. So we lost
dend Verify. what fools We mortals
| oe! 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 certif-
Gates II their issuance added no value to
what the property was previously worth
Ito what impartial appraisers said it was
worth-and to what Uncle Sans assessor
ruthlessly assesses it for?
| Inc answer ought to be plain enough
10 those who have followed my argu-
ment. We honestly wanted them as now,
to escape from the false charge of de-
| caring 70 per cent dividends 1--WE have
to do that to distribute per cent per
4 annum upon the value OF our investment)
when. In fact. at that nominal rate co
per cent? We are only realizing legal
| interest on our actually invested capital
Such charge is pa rtisanship. pure and
simpie-Parthian> partisanship. at that
shooting poisoned arrows in retreat from
unNenable ground. 1t does not rise to
the dignity Of casuistry. but it does vim
| dicate my criticism that the only pur-
pose that can be promoted by denying to
| the company here Capitalization equal to
the actual value Of the property is to
give We isimilitude to statement that is
| 70 per cent true and so per cent false. A
| 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 de-
| fensible only on the theory that good
fruit may be produced from bad trees
/ by the unlimited use Of manure But this
treatment having repeatedly failed,
| submit it would be profitable now to fol-
! low the Good Book-and cut these barren
trees down.
| To make our position perfectly plain.
j solemnly protest that the actual proof is,
| as the proof shows, that the Washington
Gas Light Company has not distributed
on capital account in any one year since
1OO4-the year of the certificate dividend
| a total exceeding ) per cent upon the
actual value of the property used in the
conduct OF Its business. And has never
1 earned in any year since that year an
amount exceeding per cent. upon the
! actual cash value of it's present invest
ment, as determined by the Humphreys
| appraisement or as may be determined
| by capitalization Of the taxes paid by
! 1t to the collector of taxes at the rate
| OF one dollar per hundred-a rate that is
largely In excess Of the average rate
assessed upon private property in the
District of Columbia.
To prove our good faith in this defense.
beg the committee to consult corpora
ton counsel or the Department Of JUS
tice to see II our contention here is not
| recognized there as undeniably true.
To come back to the argument. Now
honor bright! Mr. Chair:1an-if you had
house. and lot that cost you $1,000 forty
years ago. or say thirty years ago. and
its value had naturally increased to three
times its original cost. until 1t was now
to the market standards of value, until
the taxes. in fact. had been raised upon
II from $40 to $JO-now. honestly-in such
a case-if the government or the people
wanted that property. would you feel
that you were exactipg an extOrtiOnate
profit IL you priced 1t at its present actual
value?
Well, 1 have shown you. and 1 am
going to further show you, that the Su-
preme Court says you have perfect
| legal and moral right to make the gov
eminent or the people pay you a reason
| able rent or return upon its present value
cannot make them pay you any greater
price by mortgagfng it for a part Of its
value. for the whole of Its value. or for
more than it's value. And that the court
further says: There Is nobody In this
| country big enough to take 1t away from
| you. in whole or in part. without due
process OF law and just compensation
IF the court knows itself" And what
| Is true Of you Is true Of us. The fact
that we happen to be a public utility
| proposition and you personal one. or
| political one, cuts no figure whatever
| in the equation.
| To proceed with Gibbons VS.. Mahon:-
| ((Page $3.50 The admitted facts pre-
sent the following state Of things: The
accumulated earnings of the company
were kept undivided. and actually added
to the capital Of the corporation by in
! vesting them from time to time in its
permanent works and plant until the
value of the works and plant amounted
to a million dollars; no owner of par
ticular shares, or Of any interest therein,
had the right to compel the company to
while they remained so undivided and in
! vested, the capital sock Of the COM
pany was increased to the same amount
by the act OF Congress of May "a. 1886"
etc.
| Continuing the court Up $3.50 says as
follows:
whether the gains and profits OF a
corporation should be so invested and ap-
portioned as to increase the value of each
share OF stock. for the benefit of all per-
sons interested In 1t, either for term Of
life or for years or by way Of remainder
in fee: or should be distributed and paid
out as income. to the tenant for life or
for years, excluding the remainderman
from any participation therein. Is a ques-
ton to be determined by the action OF the
corporation itself. at such times and in
such manner as the fair and honest ad-
Iministration Of its whole property and
business may require or permit. and by q
rule applicable to all holders OF like
shares of stock etc.
| 1t is thus apparent that the Supreme
Court considers. as do all other courts.
apparently. the term earnings OF a COM
pany" to include It's gains and profits
from every legitimate source. 1t Is to be
noticed also that in this case the Supreme
court used the words plants or works
as equivalent to all of the property OF the
company.
l refer you to yet another case. which
many Of you no doubt have reason to re-
lmember-Chesapeake and Potomac Com
Ipany vs. Manning. reported In 1S8 United
States Supreme Court Reports. page 23S.
lin which the Supreme Court took occasion
Stunning to doubt the obligation Of Chi
icago. Milwaukee and st. Paul In SINH a.
matter, and / may add that the doctrine
laid down In Chicago. Milwaukee and St.
Paul Williams w. Western. Union. and
Gibbons VS.. Mahon. which we have Just
been considering Is now so universally
recognized as good equity and sound law
that / shall not consider 1t necessary to
cite you any further referen res other than
Those that incidently touch II were al
lied questions are involved. Out OF the
abundance OF precaution, however. Will
before Diminishing this point. with the
committees permission, submit to 1t this
further observation In regard to the ap-
plication of the case In review to the
case here under consideration.