The Washington herald., 1910-04-05
Dr. Alexander Humphrey, President of Stevens In
Stitute TeStifieS as Manufacturer and Expert

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complaint that was made here the other
day as TO a bill Of S2.7s. OF course. I
don't know whether the committee cares
10 hear anything upon that or not The
practice throughout the United States
with regard to deposits Is to take 2 de-
post where the company has no means
OF knowing the standing of the applicant,
Just as when you go into a dry goods
store 10 buy on credit, you have to estab-
fish your credit before you will be allowed
10 open an account So S. is deposited,
and If bill of 1913 should not be paid.
then the method Of procedure would prae-
tically amount TO the dedueting of the
$27s from the deposit to cover the bill.
and then Immediately asking the Gus
toner TO put up $2.79 in order to complete
the deposit again. In other words 1t is
intended, under such circumstances, that
the deposit shall stay always ahead of
the bill. This amounts TO the same thing
as happened in the case complained OF.
when the company demanded that the bill
be paid and the deposit left intact.
Another witness referred to the fact
that it would not be necessary to have
the money from additional capital TO
make extensions either of the mains or
of the works, because the company al
ready had a large surplus from which 20
pay for such extensions. I don't know
whether it is necessary before this COM
mittee TO referA 10 such a subject as
that or not OF course the company has
q large surplus. and It is represented by
this fact, that the capitalization does not
represent and is not equal 10 the amount
Invested. consequently there must be a
surplus; but that surplus is invested in
plant almost entirely, and the balance Of
the surplus Is used as working capital
Possibly there may be a moderate amount
there that is in excess OF the actual Pc
quirements; and the actual amount to be
reserved for working capital is a matter
Of business Judgment: but the surplus in
the main is. OF course. the surplus that
is now invested in plant.
Now. you cannot very well pay for the
extension of a main on Twenty-hrst
street by using the money already in
vested in a main on Twenty-second
street. so that this rather loose talk
about using the surplus which is al
ready invested IN plant is not very
helpful in meeting a business PROPOSE
ton
Mr.. Coudrey-If It viii not interrupt
you. would ike to ask a question For
instance, we are investigating and try
ing 10 and out whether the gas company
arc charging too much for their gas. Do
you know anything about the capitaliza-
tion and surplus and so forth, of the
gas company here?
Mr.. Humphreys-Ye sir
Mr.. Coudrey-What was their original
capital7
Mr.. Humphreys-wen. I could not tell
you that. because that goes back into
ancient history, although could tell
you from papers that have; from my
books.
Mr.. Coudrey-Are you gas expert
and have you handled. In any way, their
financial affairs?
Mr. Humphreys-Of the gas company,
do you meaHA
Mt. CoudreySYes.
Mr.. Humphreys have handled every
branch Of the gas bushes. sir
Mr.. Hazelton-But he means OF this
company.
Mr.. Coudrey-I am only speaking OF
this company in Washington.
Mr.. Humphreys-In my investigations
for them in past years. and in my inves-
legations for people outside of Washing
ton. I have Investigated all branches OF
their business. and am qualified to do so;
and ] have had charge of all branches
OF The business,
Mr.. Coudrey-It is not a question of
qualification, but what I want 10 get at
Is this: This resolution calls for an in
vestigation Of the gas company here,
and what we want TO know is whether.
In your opinion. you can say yes or no
as 20 whether the gas company here is
overcaoitalized OF not.
Mr.. Humphreys-At the present timer
Mr.. Coudrey-Yes, sir.
Mr.. Humphreys-It is decidedly under
capitalized, and there is not the slightest
question about II,
Mr.. CoudFey-HOw about their profits?
Mr.. Humphreys-They are not extrava-
CANT by any means; and, Furthermore,
their statement underestimates their ex-
penses; in other words. their profits are
overstated, in my opinion.
Mr.. Coudrey-Do you mean that their
statement does not give true statement
Of their expenses?
Mr. Humphreys-True. so far as they
believe. but, of course, differ with them
as 70 certain additional items which go
into expenses.
Mr.. Coudrey-What per cent did they
make on their capital last year?
Mr., Humphreys will have to figure
that out. if you VIII pardon me for
moment. According to their statement?
Mr.. coudrey-Yes; want TO see wheth-
er you agree with them on the figures or
not
Mr.. Goldsborough-Also doctor, If you
have the references convenient there, will
you please give the value of the prop
erty?
Mr.. Coudrey-Have you the printed
statement there that they have issued7
Mr.. Humphreys-Yes.
Mr.. Hazelton-It is the report that they
are bound to make by law.
Mr.. PeaTe-It has to be made under
OATH
Mr. Goldsborough-Ther Is no question
about the accuracy Of the figures.
Mr.. Coudrey-Is there any way by
which we can get the original capital of
the gas company?
Mr.. Goldsborough--I can tell you that.
1t was originally $4,000
Mr.. Coudrey-How much more money
have you put in2
Mr.. GOldsborough-It would be hard 10
make a statement of just the amount
but the fact is undoubtedly true that a
very large part of the capital that has