The Washington herald., 1910-04-05

| Of S2600,o00 and improvement bonds
of S5ss,OO0. or practically ssOo,Oo0 So
we can state that the capitalization
IS, 100000 The net earnings were
$4,000 should prefer to intro
duce a correction there, ana reduce
the earnings quite a little. because do
not think that the amount which is put
in for the accruing liability. on account
of depreciation, is large enough.k But
even taking it from their statement, they
earn on this capitalization about II per
cent. almost exactly that
Mr.. Coudrey-How much Of that capt.
/ talization is you might say. water?
Mr.. Humphreys-No at all. sir.
| Mr.. Coudrey-None at all?
/ Mr.. mphreys-Absolutely none.
! Mr.. Coudrey-Suppose you make money,
then you increase your capital, as / IN
derstand It. but the water
| Mr.. Humphreys-You VIII have to de-
fine Just what water" is. Water. to my
mind, is capitalization which is not repre-
scented by actual value. and especially
not represented by physical property.
Now, all of this capitalization is far more
than represented by actual plant, by my
firms appraisement so, instead OF there
being water, this capitalization IS more
than represented by actual live assets.
There is no water, but there is a surplus,
and that is where this surplus 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? I Go
not mean out OF the money earned, but
other moneys?
Mr. Humphreys-That I don't know.
Mr.. Coudrey-Of course. they earn
money every year. but II they are earn
ing abnormal profit then We ought TO
know it, that is all.
Mr.. Humphreys-Of course. upon that
YOU would have 70 make an investigation
| for every year, Now, as 10 these alb
normal profits. as TO whether there is
any. 70 my mind there is none unless you
can find some extreme case OF great sur
plus earnings due to excessive prices. !
have In the past looked over the prices
| for the Washington gas as compared
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 Wash
ington has never had reputation for
charging a high price for gas. If COM
pany should decide that ii VIII not give
out all its earnings IN dividends, but
satisfy its stockholders by a conservative
dividend. and place the balance in plant.
/ that would be what we Americans. In the
past certainly. have considered good man
I agement, and that is why Americans 10
great extent have been prosperous. and
that is what has built up the industries
/ OF the country. They have not been inn
provident and paid out all Of the money
earned. but have taken some OF the earn
! ings and placed them back in the plant
and business and so In that way the sur
plus earnings have been employed by this
company. Under the present direction Of
| affairs. especially by governmental bodies
it is doubtful whether that is a good
policy, because It raises a question as 20
whether the owners of the property are
entitled to what they own. am not a
! lawyer. but I venture TO believe that II
/ you go back into the past TO determine
whether earnings we're excessive earnings
1 or not. that those earnings having been
earned. and the stockholders having held
them and put them not into their pockets.
/ but into the plant, that they own them
/ just as much as If they had paid out
/ cash.
Mr.. Pearre-You consider those things
{ IL 81,
in the future; that is. you consider those
things in mapping out policy for the
| future?
| Mr. Humphreys-Yes, sir; and that is
| just what ! am coming to- Ny point is
/ this. that in an investigation like this.
and have been in a good many of them.
/ in my own company as well as others
/ Mr. Rothermel-In this connection let
me ask you are you interested personally
/ In gas company elsewhere?
Mr. Humphreys-Yes sir
Mr. RothermeI-Or here?
Mr. Humphreys am not interested
here. no.
Mr. Rothermel-But elsewhere?
Mr. Humphreys-Yes, am president Of
the Buffalo Gas Company
Mr.. Rothermel-Are you interested in
other places?
Mr.. Humphreys don't think that
have got any interest unless it is a small
stock interest in one other company-I
don't think at present have any other
interest; I don't think of it.
Mr.. Coudrey-And you would not con-
slider that you are prejudiced Juror?
Mr.. Humphreys-No. sir, I am not, and
my friends and my clients would not
| think so, either.
Mr. Coudrey-I would not think that
your friends or your clients would think
so. but am talking about the public.
Mr.. Humphreys-with those who know
me I do not think that am considered
prejudiced witness. What mean about
my clients is this: Nobody knows better
than my clients that my testimony can
not be controlled.
Mr.. Wiley--I would like to mention an
analogous case for Mr. Coudrey's benefit.
II Mr.. Godfrey were examining an engi-
neer Of a corporation IN reference to
something in connection with another cor
poration. the fact that he was an enei-
neer of a corporation would not neces-
sariy bias his testimony in regard TO
the corporation in which he had no
interest whatever, would II?
Mr. Rothermel-But if the witness Is
personally interested In both characters
OF business, 1t seems TO me.
Mr.. Pearre-It would show his line of
thought
Mr. umphreys-Certainly; and I must
be able to stand a cross-examination upon
that, of course.
Mr.. Pearre-An1 not rejecting upon
the credibility of the witness, but simply