Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-03-14
PROBE OF GAS PRICE
Senate Committee on Incor-
porations Proposes Inquiry.
REPORT SUBMITTED TODAY
Congress Declared to Be Responsible
for Company's Behavior.
STATEMENT OF NET EARNINGS
Legislative History of Washington
Gas Light Corporation Since Char
ter Was Granted in 1848.
OF NET EARNINGS

ly a proper price for gas sold in the
District, an investigation of the at
fairs of the Washington Gas Light
Company is necessary. according to a
report submitted to the Senate today
by Senator Brown of Nebraska
The report was submitted to accom-
pany the resolution favored by the
Senate committee on interpretations or
ganized in the District of Columbia.
which authorizes the committee to in
vestigate the Washington Gas Light
Company.
Claims are being made, it is declared,
that some of the capital stock and
the certificates of Indebtedness of the
| company were issued without legal au-
thority 1t also says that the last an
nual report of the company showed
net earnings of II per cent on the
total capitalization. If certain of these
claims are found. upon investigation. to
be true. the report says, the public
has been wronged.
Means of Determining Facts.
To determine the facts necessary to
properly regulate the capitalization of
the gas company and to rightly fix the
price of gas, the report declares, the
investigation proposed in the resolution
is necessary.
Senator Brown, in reporting the resolu-
tion asked that it be referred to the
committee on contingent expenses as the
expenses Of the inquiry are to be paid
from the contingent funds of the Senate
Senator Gallinger thought, however,
that the resolution should go to the Sen
ate District committee During his long
service in the upper house, he declared,
it has been the unvarying custom to re-
fer such resolutions to the District COM
mittee.
Senator Brown did not consent to that
course. Instead. he asked that the mat
ter go over until tomorrow when the
resolution and report will be printed.
Reasons Assigned.
The reasons for the resolution the re-
port states to be as follows:
Il. The Washington Gas Light Com
| pany, being creature of Congress, Con-
gress is responsible for it's behavior In
order to discharge this responsibility Con-
gress should know all Of the facts Incl
| dent to the business of the company, its
| capitalization, the extent and value of Its
| properties. the quality and cost of it's
/ service to the public.
80 such information is not obtainable
| from the annual reports of the COM
| pany made to Congress.
%. The act of 1S4S limited the author
lied capital stock of the company to $780,
900, which has since been increas ed IN
- 6OO.OGO. some of which, it is claimed, is
without legislative sanction.
Il. The company has outstanding GER
| tiflcates of indebtedness equal to it's capi-
tai stock, to wit. 5000. CO., bearing per
cent interest, all of which. it is claimed,
, is wholly unauthorized by law.
.. IT is impossible for Congress tn
determine what is a reasonable charge
for gas unless Congress shall first know
| tually invested and the cost of produc-
| ton
Based on Company's History.
/! After setting forth the laws governing
the Washington Gas Light Company. the
report continues:
| From the legislative history of the
company since its charter was granted in
| 1SiS. it is clear
| First, that the capita lization of the
| company is within the control of Con.
gress.
| Second, that the company has accepted
such authorizations as Congress has given
it, and has acted hereunder
Third, that the company awaited itself
OF that portion of section > (since re-
pealeb OF the 1896 act authorizing il Il
convert certificates of indebtedness i'm the
sum of SaO,HO into capital stock.
| Fourth, that the certificates of indebt.
edness were issued without any express
authority of law; their validity and Sc
much of the capital stock as they repre-
sent is therefore open to serious question
| Fifth, If certificates of indebtedness.
| represent no actual Indebtedness due
| from the company, but, in fact represent
earnings and profits. they operate as an
| unauthorized increase of capital stock in
| violation of law.
| Sixth. 1t is obvious that Conpres,
never intended the company should have
power to issue any certificates of indebt
ednesS
Purpose of Congress.
Congress, in all Of the legislation re.
ferred to. has asserted its control of the
capital stock issued by the company
manifestiy for one purpose, that purpose
being to protect the public against ex.
tortionate charges for gas based on ar
excessive capitalization. If an investiga.
ton shall develop that the $4,000
evidenced by certificates Of Indebtedness
1 bearing q per cent interest, in fact rep.
resent undivided profits and do not rep.
II resent in any sense valid Indebtedness
it is clear the public has been wronged
Such wrong cannot be remedied by Con.
| gress unless and until Congress first as
certain the truth about the actual con.
sideration for such certificates"
Regarding the price OF gas. the report
sa-s:
The original act CT 1913 was silent or
the subject of gas prices. The act OF
June ~, 1850. was the first attempt OF
Congress to fix the price. The price was
made al 90 cents Per hundred cubic feet