The Washington herald., 1910-04-14
SAYS 1T is now UNDERCAPITALIzED
Expert Humphreys Testimony Intended
to EnIighten Committee on
Gas Business.
ASSISTANT SECRETARY GIVES FIGURES

by the purchasers OF what is now
known as the Washington Railway and
Electric Company TO appraise the prop
erty Of the gas companies for their use
and benefit in a negotiation they were
about 10 enter upon. looking 20 the
purchase Of these properties also. DR..
Humphreys made a thorough examina-
ton at that time and appraised the
property Of the Washington Gaslight
Company for the purchasers at a price
approximating $9.OOO.OOO-a price which
the purchasers, relying upon his APP
praisal, were willing to pay for Il,
which, in fact, they would have bought
it for had not the stockholders declined.
Since that appralsement OF twelve years
ago, DR.. Humphreys has made at least
two similar appraisals. one Of them
only two years since; all Of which, OF
course. qualities him in a higher de-
gree TO testify here Of his own knowl-
edge than any other engineer could
have done whom we might have brought
before you for that purpose.
But that was not the main reason FOR
our choice. The companies that I have
the honor 10 represent sincerely desired
TO present 10 the committee a witness
whose previous record in work OF this
character is such as 10 entitle his find
ings TO a higher degree OF credit than
would have attached 10 those Of any
servant OF the company IN its regular
employment. or 20 the cOnslusions Of
anybody, without exception. whose ser
vices could have been made use of by the
company under the circumstances-fo
two reasons. ID Because there was
not time enough for any other engineer
10 make complete appraisement be-
fore the adjournment of Congress, and
C2) because DIT. Humphreys is person
ally well known 10 several members OF
the committee and has been certified 70
every member upon it In a previous in
vestigatiOn by gentlemen whose informa-
tIon on the subject and whose judg-
ment In regard to the same cannot by
any possibility be questioned or denied
by anybody, anywhere.
Now in proof Of this broad assertion, 1
beg 10 refer the committee TO the tesu-
mony OF Mr.. Madden, recorded in a hear
ing on his bill. known as the Madden
bill hearing (H. r. 12i. 1897, page 10, in
which he justifes the selection Of Dr..
Humphreys for a member OF a board
which was established IN the city OF Chi
cago. through Mr.. Madden's instrument
tally. 20 regulate the prices TO be
charged the people Of that city by the
Chicago Gas Company, Mr.. Madden says:
Mr.. Alexander Humphreys-I am quot
Ing from the record-the head OF a great
school. president Of the celebrated Ste
vens Institute, and the leading consulting
engineer Of America and Europe on the
subject Of the manufacture and distribu-
ton Of gas. was selected as one who
would present the subject from a wholly
impartial standpoint as a great engineer.
I am quite confident, Mr.. Chairman,
that those Of you who appreciate the
great abilities OF Mr.. Madden, and the
distinguished services he has rendered the
people Of his own city In this connection,
and the deep interest he has taken in the
subject here, will agree with me that It
would be difficult to state in language
more unequivocal higher certihcatiOn
than this to the ability Of the witness.
his mastery Of the subject and his i'm
partially in calculating It, all Of which
have been so Enthusiastically displayed in
the course Of his two days testimony be-
fore this committee.
But this IS not all. On page 30 Of the
same report I find Mr.. Edward Beemis,
who IS unQuestionably one Of the ablest
and best known OF the sO-called anti-gas
experts. qualifying DR.. Humphreys as
follows;
I accept the standard established by
Alexander c. Humphreys. the best au-
thority I know Of in the gas world.
But IL the committee please. It has
never been my purpose to rest our case
upon the testimony Of DR.. Humphreys
alone The American Audit Company has
verified his report, and there is album
dance OF testimony, which will be pro-
duced should you think It necessary, to
confirm his statements.
I have only to add that am inclined
70 think you win not want any array of
evidence as to the actual amount paid
in by the stockholders when you come
to realize the fact that conceded at
the first hearing. on behalf OF the COM
pany. that a large part OF the present
capitalization was derived from profits
permanently invested in the plant. and 1t
is difficult TO understand why the case
should be delayed by efforts 20 prove
what the companies are willing for the
sake OF the argument TO concede. It
may serve. however, to narrow the con-
troversy TO the real points at issue fur
Their 20 say that In so far as the rea-
sonableness Of the rates are concerned
we could also safely admit FOR the sake
OF argument that the stockholders Of the
companies never at any time put a dol
lar Of their own money into the plant.
or that in point Of fact the company
does not and never has owned any part
OF the property employed in the conduct
Of its business, II being we'll settled law
that the sole criterion in a rate case IS
the value OF the property employed, r.
respective Of It's ownership or the man.
ner in which title to It was acquired.
The second animadversion to which !
beg leave to be permitted now to re-
spond was embodied in the question put
20 the witness upon the stand Or. Hum
phreys) TO this effect: "Why Is It that
the companies here on trial are so extern
siyely advertising this testimony"