The Washington herald., 1910-05-03

stance, as to the volume Of business done
or the value Of the property employed. or
as TO the assessment values. respectively.
each case. AS I said in my statement
when last before the committee. the COM
parison is all the more advantageous
to the gas companies because the
returns Of the other public utilities
are believed TO be reasonable when
compared with those received for like
services under like conditions in the
principal cities OF the country, If, indeed.
there are any cities In the country so
efiicienuy and satisfactorily served. Per-
/ maps ! ought. also. TO say before passing
this branch OF the subject, Gentlemen
or the Committee, that II thought that
the publication which have made Of the
prosperity Of my neighbOrs would tend
10 produce insensibility OF their merits
70 make the public oblivious TO the fact
that their success is due mainly TO care
ful and able management by which the
community has directly and largely prof
lied. l should not have felt myself justi-
ned In using their names at all in this
connection. The truth is. I should not
have done so under any circumstances
had l not been firmly persuaded that
their reports when correctly interpreted
VIII serve TO bring home TO your minds
an economic fact that Mr.. Justice Moody
has so ably emphasized. to-wit That
large capitalization and generous profits
thereon are not necessarily hostile TO the
public interests nor incompatible with
efficient service.
The corroborative testimony as TO val
ues also shows that the actual value OF
the property, as shown by the average
market value Of its securities. Is between
twelve and thirteen million dollars.
! Finally. as 70 all the elements of
value. I confidently submit that the
/ question Of the value Of the invested
/ capital OF the Company which is the
point around which this case revolves, Is
foreclosed by the operation OF two we'll
known rules Of law applicable 70 such
/ cases. The first law is that corporate
values are property. and taxes thereon
are taxes on property within the consu-
/ tutional provision as 20 taxation OF prop
/ erty at value. AS illustrations OF this
proposition. beg 10 refer YOU TO Adams
/ Express Company VS. Ohio. l66 United
States. page lS5. where II Is held that Il
Is cardinal rule that whatever property
is worth for purposes Of Income 10 sell
u is also worth for the purposes Of taxa
uon' the converse Of which proposition
must also be true; and in Gulf etc. VS..
! Hughes. l8 United States Reports. page
/ IL. II was held that corporate privileges
! are property and taxes thereon are taxes
/ on property within the constitutional pro-
vision as 70 taxation Of property at value:
It was held, also In Railroad. etc. VS.
/ Board Of Equalizers. S5th Federal Re
I ports. page 302, 315; also IN Spring Valley
/ Water Works VS.. San Francisco. I24 Fed.
eral Reports, page 574. that the valua-
ton Of the franchise for the purpose OF
( fixing rates should not be less than its
valuation for the purpose Of taxation.
II IS true this method. although com.
/ petent. is not conclusive; but on tho
general doctrine laid down in People vs.
/ Comrs., IS y. Y, s.. and In many other
cases-that In matters OF taxation II
IS sacred duty 20 impose the burden,
equally "a duty fully recognized by The
Federal Constitution-it must be obviou,
that this method OF appraisal is entitled
10 high degree OF respect and conf
/ dence. But there IS another legal method
Of computation that completely verife.
the correctness OF the Humphreys val
uation. both OF the tangible and lntan.
gible assets Of the -Company-a methot
that has been legally defined as follows
| From the average market value OF il.
/ securities. which the Courts say IL taker
/ for period long enough 10 cover ordi
nary fluctuations Is competent evidence
10 be accepted as the basic factor in ar
equation to determine what IS the actua
value. or taxation purposes, Of the Fran.
chise. viz: From the total actual valu,
Of the securities mot face or par value
take the total value OF all the knowr
assets, other than franchises. and III,
remainder is the value Of the franchises. o.
State Railway Tax Cases, % L. S, 575
6O2. COZ C23: 663. 669. GID: Spring VALLEY
VS.. Schotter. 81 Cal, 69-117; Burke VS.
Badlam, 81 Cal, 594: san Jose vs. Janu
airy. 81 Cal. GA
Now, n the market value as here In
dicated is an acceptable basis for com
putting franchise value, It follows tha
It must also Furnish as least a salts
factory check upon an appraisal OF tota
value.
In this particular case the average
value OF the stock is 81 per share-whicl
for 10000 shares amounts 10 $4,000 L
not this q practically complete conirma
tion OF the Humphreys valuation G9,2
LOCO Of our physical assets and OF thu
Franchises also at $4,000? Let us see
Add 10 S,350.Oo0 our funded debt o
$500 600. which at average market valu
GID equals $3.5S4,O0O; and we have tota
OF l29S4,OOO-which closely correspond
with the Humphreys appraisal Of tn
property as a going concern at $1,000. .OOI
Now the plain and unmistakable poin
In all this IS that If this Company
pays TO the Collector OF Taxes for tn,
District of Columbia an amount IN taxe
which capitalized upon the taxation rate
established by law in this jurisdiction
equals an assessment valuation Of S13
100000, then the Company is entitled L
be appraised at S13,0OO,OOO for the pur
pose Of fixing a reasonable rate for IL
services. a little reflection. Mr.. Chair
man. win be sufficient TO satisfy YOU
mind and the minds Of the COMMITTEES
that IL this proposition Is not true il
law it should be so because incontro
vertibly 1t is true in equity. For II mus
be evident that the Government that re
ceives annually from us an amount tha
other people would have TO pay upoI
$l3,OO00O0 ought TO be equitably estoppet
from denying that we have prOpert!
enough under legally established taxation
rates in this District 10 produce tha
amount. The evidence shows that las