The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1910-04-05
Jas INVESTIGATION
STARTED BY HOUSE
President of Stevens InSti-
tute of Technology Gives
Testimony.
CONTINUED from Sixth Page1

Hssets-that is, plant real estate. and so
forth. That was without working
capital. Up 70 June u, 1903, there were
additional extensions made, going up 70
Sl.S30,O00. so that on June 80 1903, the
actual appraisement. without any fran
chise rights. was $9.273,9 51. Therefore I
Say that the securities do not repre-
sent even the investment And II we
are going 10 talk about returns, we
must talk about returns on the Invest
ment, and not on the securities The
securities might not reach 100000, but
that would not affect the rate Of return
on the investment For instance, take
the case OF one OF the Massachusetts
manufacturing companies. shoes and the
like. the book value OF the plant has
been reduced by excessive credits 70
plant account: that If the rate OF in
terest paid were calculated on the book
value of the pant II would be tire
mendous percentage. Here, If the earn
angs are calculated on the securities, Of
course, the rate OF return seems hlgh,
because the amount of the securities
does not represent, in par value, any
where near the actual investment In the
plant.
The Chairman-What. as you make
the figures, is the return which the
Washington Gaslight Company is get
ting on its investment?
Makes a Calculation.
Mr.. Humphreys viii make that cal
pany's statement and making no addi-
tional allowance, which I think should
be made, for increase aCCruinE cost of
depreciatiOn-taking the actual value Of
the property in round figures at $le,OO,-
600, which is a little above what il was
on June so, 1903. that would make 81
per cent II, however, you took the val
uatiOn, which I consider a moderate one.
which we put upon the plant as a whole
in the middle Of last year, the value Of
-. H. 81 .HsnHn 49,
concern, at Sl3.OO0.UO. that would show
in earnings last year . per cent, with
half Of the year running at 30 cents and
half Of the year at 81, or averaging
Mr.. Goldsborough-Nine cents.
Mr. Humphreys-Between 81 and 81
cents for the year Now, upon that they
made, on my valuation, per cent on
their property value, and on value OF
physical assets they only made about
81 per cent
Mr.. GoIdsborough-Pardo me. doctor.
but the difference between your caIcu1a-
ton of the rate per 1,oQo. and that of
the company, Is simply this, that the
company, IN stating its profits over
charged itself. or failed TO credit itself.
with the depreciation account
Mr.. Humphreys-Th IS right sir as
l have tried 10 explain. This fails 10
deduct from its receipts the fun cost, as
see f.
Mr.. Goldsborough-Au the actual state
nents and figures from which these de-
auctions were drawn We're correctly re-
ported by the company, and this side is
sue in regard 20 cost per 200 cubic feet
was made by the secretary under the
apprehension that II was not proper 10
credit the company with the depreciation
account
Mr.. Humphreys-That is what have
underworld 10 explain
Mr.. Goldsborough-And what fs +ba
difference
Mr.. Humphreys made my statement
upon that. and I supplemented il nv
saying that larger allowance should
be made for depreciation
The remainder Of the days testimony
Will appear later.-Adv.