Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-05-03
RIGHTS OF WASHINGTON
GAS COMPANIES
Continued from Eighteenth Page,

do not wish to indicate to you the order
OF your argument, or your arrangement,
but I just throw out that statement.
Mr.. Hazelton-I will take up the matter
stock. because that, as understand it. Is
one of the main reasons why this resolu-
ton is introduced here. 1t 10 to end out
that system of dividend certificates Of
as bonus among the stockholders.
Now If they can issue those certificates
one year they can issue them the next
and. of course. 1t is as apparent as can
be that In the end the price of gas has
got to go up in order to meet those in
creasing obligations unnatural obliga-
tons, or else that company has got to
is the system that this present resolu-
ton is pointed at. That is the very OBJ
JectiOnable condition of the conGuct of
matters in this gas company that has
given rise. as 1 understand it-that is one
of the things-to the necessity of further
supervision i'm the form of this resolu-
tion.'
The chairman-Mr. Hazelton. 1 would
like to ask you a question.
Mr.. Hazelton-Yes. sir.
The chairman-In your opinion Is this
gaslight company overcapitalized?
Mr.. Hazelton-No, sir.
The chairman-What. in your judgment,
Mr.. HaZelton-Well. the Massachusetts
basis as 1 told you, is the value Of the
structural plant, exclusive Of the fran
chise, enhancement and good will. The
United States is the actual value Of the
plant, with some acquisitions. The rule
laid down by Congress for this gas COM
pany in the act of 1896 was that they
value Of the plant. Is that it?
Mr.. GOldSbOrOugh-Yes.
Mr.. Hazelton-That Is my recollection;
the actual value of the plant. Now l
concede at once that this company is not
capitalized to the extent Of that valua-
ton. $2,6O0OOO Anybody would con-
cede that. But I do not understand why
that is to be bar In any way, shape or
manner to the consideration and the
passage of this resolution.
Our position Is that this gas company
has no right to declare and issue the
kind Of dividends that it is giving to it's
stockholders, aside from cash dividends,
that they are not authorized by law. that
they are unknown to their charter, that
they are unknown to any act Of Congress.
That is our position. While the corpora
ton persists in SO doing, this resolution
comes along and gently reminds them
ton and proposes to supervise and regu-
late them to the extent Of stopping that
kind Of system OF dividends.
Mr.. Pearre-As 1 understand, Mr..
pany. contends that Congress has not
that power, has not that right?
Mr.. Hazelton-I think so, sir.
Mr.. Goldsborough-My proposition is
that SO long as the securities are within
the actual value of the property 1t makes
no difference whether they are legally
issued or not, that the company has a
right to q reasonable return upon the
property, whether 1t had no securities at
all or $40.oOO.0Oo worth Of securities.
p00r IN hA
power Of Congress?
Mr.. Goldsborough-I do not question the
power Of Congress-; I say that Congress
cannot by this act or any similar act
compensation, and that the company is
entitled to the equal protection of the
laws, and, therefore,. 1t is unconstitu-
tional'
Mr.. Coudrey-who gave you that right?
ly gave us that right
Mr.. Coudrey-Then 1t can take it away?
Mr.. Goldsborough-It is not an Indian
gift. Congress cannot give you thing
one day and take it away the next.
Mr. Hazelton-You got It with string:
Mr. Goldsborough-In the Monongahela
case Congress expressly forbade that at
any time the franchise OF the Monongaheia
Bridge Company should be estimated or
appraised. II Congress wanted to take
the property 1t could, OF course, but the
Supreme Court said, ''Stop, you cannot
take 1t without buying the franchises"
That is the life of the whole thing, and
the franchise with the other property.
OF course the privilege to alter or amend
embodies the right Of eminent domain,
and Congress can take this property any
day 1T wants. But 1t cannot regulate
il out Of business.
Mr.. Hazelton-They can supervise or
regulate 1t without taking it. That IS
what they are doing. They do not pro-
pose to take it, but they propose that
you shall run it under regulations and
under the law as they have a right to re-
quire it.
If I remember, there is a case in the
Maryland reports where the legislature
passed a law compelling mining COM
pany to pay their men In lawful money
Of the United States.
Mr. Goldsborough-That is undoubtedly
constitutional. That is all right
Mr. Hazelton-They did that because
the reserve power in the legislature to
alter, amend or repeal that authority.
Now. you will find the books all full
Of the doctrine.
case it is equally clear that the power
may be exercised whenever 1t appears
that the act Of Incorporation is one
which falls within the reservation and
that the charter was granted subse-
quent to the passage Of the general
law, even though the charter contains
no such conditions nor any allusion to
such a reservation.
Mr. Goldsborough-There is no ques-
ton about that.
Mr. Hazelton-If there is no question
about that then you concede all I ask.
Mr.. Goldsborough-No. your PROPOSE
ton is laid down in the case have re-
ferred to, Chicago, Milwaukee and ST.
Paul.
Mr. Hazleton-The extent of the power
Of the legislature under reservation to
alter or amend, you do not claim that?
Mr.. Goldsborough-I claim that 1t is
all covered by the decisions cited, un-
doubtedly it is. Unlike the power, to tax
the power to regulate does not include
the powers to destroy.
w to its power. 1t is a supervision in
this case. It goes further than healthy,
square. upright regulation in this case,
but it can 60 no further. -
Mr.. Coudrey-Can the government, In
your opinion. prevent misfeasance and
malfeasance?
Mr.. Hazleton - Misfeasance and mall
feasance in what, the corporation?
Mr.. Coudrey-Yes, sir.
Mr.. Hazleton-Without a doubt. They
can do that under the police power,
what we call the police power, the power
which protects the public health and the
public morals, and which Is now extended
way beyond the limits OF what 1t was
originally on account Of the demand for
It's exercise in many directions.
The minute this government grants
charter to a citizen or an association OF
citizens and they accept 1t and act upon
it and invest their money in 1t. they come
N a