The Washington herald., 1910-04-14
General Counsel Godsborough Declares that All
the Washington Company Asks Is a Fair
Return on Its Investment


whether this resolution ought to pass or
not, and then we will take up the other /
corporations. That is my intention. Speak
ing TO this resolution. DR.. Humphrey
there is none OF us who, as l have said /
before, underestimate his abinty-gave |
US a great deal OF information; In fact. l /
learned more about the gas business IN |
the last two weeks than l have IN all my |
life before, but DR.. Humphreys did not
get down to the resolution, as ] under |
stand it. and his remarks were therefore !
not relevant in my opinion.
Mr.. Goldsborough-I want 10 say 10 you.
gentlemen, that OF course I appreciate
the fact that you are here with the ut
most integrity and good faith. seeking TO
hold the scales fairly between the COM
pany and the people / do not question
IL for moment, but at the same time we
are here, put on our defense by a general
Indictment which contains. as ! said IN
the opening. no counts. but which is sup
posed to be defenSible upon the ground
that the company has not dealt fairly
with the people: that its charges are ex-
cessive, and that its profits are unusual.
II not abnormal.
Now It is absolutely essential for US. or
was essential for us. as I conceived II. 10
dlsabuse your minds Of that impression
In order to get fairly down TO tho real
merits Of the case.
Mr.. Coudrey-I want 70 interrupt you
right there. The resolution was intro
duced In good faith by myself
Mr.. Goldsborough-I fully appreciate
that.
Mr.. Coudrey-The fact that DR.. Hum
phreys did not give US the information
which we wanted makes me believe that
the gas company has made abnormal
profits. That was the only thing the doc
tor DID not seem 10 know. and do not
believe he went into that question because
l think he Is a gas expert ! think he Is
a good one. II 1 needed one 1 would send
for him right now and employ him, but
when it came down 20 the books OF the
company as 70 the amount OF money that
Is in the business. or has been put IN.
and how much has been earned, the doc
\ tor could not answer those questions. and
/ think the only person TO answer those
questions Is somebody who Is intimately
/ connected with the corporation
/ Mr.. GoldsborOugh-If the committee
/ please, the first step in this case is the
/ company's statement. and that Is here in
evidence as the foundation OF the COM
panys defense Prima facie IL is a com
plete defense. The company states the
value OF its property, which Is the ONLY
thing that can be legally considered when
you come TO estimate the measure OF the
! returns which the company is entitled 70
earn and distribute. Further, there is in
| evidence an unchallenged. unimpeached
| statement OF the actual amount OF the
earnings OF the company for the past
J year. II course. the statement only COW
ers one year We bring DR.. Humphreys
here because he Is competent to say
whether the earnings that our statement
discloses are truly stated, whether they
are correctly computed and whether the
estimates and valuations therein con-
tanned are reasonable and proper. and
that Is verifcation. Now, he IS brought
here TO satisfy your minds as 10 these
things. This is a wide subject. II has
many ramihcations, many Of the commit
tee have only general knowledge OF II,
and very meager knowledge at that, an1
II seemed TO be necessary that the subject
should be Illuminated by the testimony
OF an engineer Of the highest reputation
we could find.
When I come 10 argue the case I think
I can satisfy the committee beyond any
doubt whatever that the rates charged
ere reasonable. that gas instead OF being
expensive in the District OF Columbia is
I oil 81 -Io
ket; that IL is the only necessary OF
life that has been constantly going down
in price for fifty years. while everything
else has been advancing. and that il IS
even relatively cheaper here than water.
There IS nothing in the condition Of the
company in its treatment OF the people
in the charges that have been brought
against 1t TO justify its being penalized
by anybody. Whatever its rights are.
they are the rights which are guaran-
teed to it by the Constitution Of he
United States, and have any number OF
authorities-
Mr.. Coudrey-Would you be better sat
ished II this resolution applied to al
public corporations in the District OF
Columbia?
Mr.. Goldsborough-It could not be fairly
applied to them all because the gas COM
pany Is the only one that is uudercapi-
talized. The gas company is uhdercapi-
talized relative TO these other companies
by anywhere from 200 10 500 per cent
That is shown by the taxation rates. We
pay SI3l, 900 annually in taxes. The Cap
ital Traction Company. for instance-I do
. / No fzh fnor
about IL; IL is a great company and gives
the people a great service-pays 500. oOl
a year in taxes upon property capitalized
in securities aggregating $4,000, 600. Take
the Electric Light Company, for instance
IL renders a fine service. There is moth
ing TO say against it-everything for It
II has added a great deal TO the attrac-
tiveness of Washington. and to the value
Of property here. The fact remains. new
ertheless, that It Is capitalized for more
than twice the amount that the gas com
pany is, yet it pays but S66,OO0-only one.
half the amount of taxes that we pay in
We pay 900. 1 am only mentioning
these companies as Illustrations of the
point I am making Our business is as
large as the business Of the Capital Trac-
ton Company, for example, and against
its sixty or eighty miles of track we have
400 miles of mains. Why, can show the
committee that over fifty years ago
J have the evidence here in this book
$4,000. a large sum in those days. wa.
required 10 equip a plant for thirty mile;
Of these mains. Al that time the com
pany was paying $1,000 year in take:
upon this 100000 plant. We are making
more gas per day now than we did in q
month at that time. The plant to-day 8,
twenty times as large, the tax bill 10
times larger. 1 can prove TO the salts