Evening star. [volume] (Washington, D.C.) 1854-1972, 1910-05-03


people would have to pay upon $13. 900 COO
ought to be eQuitably estopped from
denying that we have property enough
under legally established taxation rates
in this District to produce that amount.
The evidence shows that last year we
paid to the collector Of taxes for the Dis
tict Of Columbia $131, 900 in cash. over
and above other forms of taxation. such
as water rents, ETC.; and the fact Is that
we will pay this year an amount approx
mating $15O,OOO for taxes upon our real
and personal property; and l submit.
apart from the rule Of law, which I have
alone ought to carry home to the minds
of the committee the conviction that the
company has invested capital of an
amount approximately at least, equal to
has been put upon the physical property
of $1O.OOO.O0O in round numbers must be
substantially correct At least so close to
being correct that the authorization of
securities to represent that value $1O,-
100000. cannot work injuriously to the
public, which as matters stand is charge
able for reasonable returns upon at
least &3,OOO,OO0 more than that sum. If
this be true think 1 have demonstrated.
Mr. Chairman that unless the Washing
ton Gas Light Company contemplates the
| issuance with or without congressional
| sanction of securities which. together with
those now outstanding. will exceed &c.
OOO.OO. there can be no occasion for ap-
prehension on the part of anybody of its
exceeding its constitutional common law
and common sense right in the premises.
1t was my intention. Mr.. Chairman,
to discuss at some length another
| branch Of the case. to wit: The charge
that the price of gas here as compared
| with prices elsewhere under fairly like
conditions is excessive, which charge I
| submit Is shown to be, by the testimony
which has been put into the case by
DIR. Humphreys-which by the way is the
only testimony in it upon this points
shown to be just as unfounded as is the
charge that it's prices are excessive as
| compared with going prices for the other
necessities of life.
Having thus disposed Of the facts and
the law in relation to this crucial
point. 1 shall now endeavor to briefly re-
view the propositions of law generally ap-
plicable to it. the legal postulates which
had the honor to submit for your con-
sideration in the earlier part of my
argument that you might the better I'M
derstand the scope OF 1t. Before pro-
ceeding to discuss these more or less
technical propositions. it may. however
be profitable for us to briefly recapitulate
the charges to which / have addressed
myself and the disposition I have en-
deavored to make of them. The first
charge assigned as reason to justify
the passage of this bill was, as has been
seen that our predecessors in Office and
title were guilty Of destroying the books
Of the company something like a gen.
erattfon ago, and that, therefore. it was
Impossible for us to prove with any
material proof that our investment was
ever actually paid into the company By
it's stockholders. This charge does not
touch the case at all. and I submit that
there is not left a shred of it that can
properly be taken into account when you
come to make up your judgment upon
the merits Of the bill.
The second charge was that the profits
OF the company are and have been out Of
proportion to the actual value Of the
property and are therefore grossly ex-
cessive. ! think I have shown you, and
II there be any doubt in the minds of any
of you as to the correctness Of my
opinion in that regard. ] am ready here
and now to show you that the profits
OF the company have never at any time
exceeded az per cent upon the value
OF its property. 1t is true they have
fact two or three times that amount
upon tile face value of the company's
capital stock, but I have talked to little
purpose II my argument has not made
it clear to all whom 1t may concern that
the face value OF the stock has no
earthly relation to the reasonableness
of its charges. the sole criterion. or
measure of value known to the law.
being the actual value of the property
employed irrespective of whether the
company has security capitalization or
not.
AS to the third charge. that our rates
are exorbitantly high whether measured
by actual cost or by inherent value. or
by prices obtaining elsewhere, / fiatter
myself that the evidence in the case.
which I have had the honor to anafyze
to the committee effectually disposes of
this proposition also.
The fourth count, that the Washing
ton Gas Light Company Is already over
capitalized certainly will receive fur
Their answer II the committee should
think it necessary when I come to sum
up the law of the case: and the same
observation may be properly made, II
the committee will permit me, Of the
fifth charge also, to wit, that it is be-
from public point of view for public
service corporations to invest Or rein
vest profits into betterments. or to predi-
cate rates upon their value when thus
in effect capitalized
AS to the sixth and to the last charge
because 1t is more or less seriously
claimed by the proponents of this prop
osition-that even physical assets cannot
rectly. by a public service corporation
without an invasion Of public rights.
The gravamen Of this charge is that
capitalization. whether true or false. so
as to rates that its enlargement III
against public policy and should be le-
gally prohibited. Therefore, that in this
particular case the company should be
right to the equal protection of the laws.
II as to this last charge the decisions
of the Supreme Court which I have dis
cussed 80 much at length in reviewing
the leading cases on the subject. the
Chicago and Milwaukee Railroad Com
pany. etc. VS.. Manning. etc. is not suf
ficient, I think ] shall be able to dis
pose OF it in a very few minutes by fur
Their citations to the same effect in all
the other leading cases involving the
same questions which have come before
the court for a third Of a century.
Gentlemen of the committee. the legal
propositions which. with all due respect
it Is submitted define our rights and the
rights Of the public and limit Your pow
ers in the premises. may be briefly sum-
married. as follows:
l. An established rate cannot be con-
that lower rate will yield reasonable
return upon the actual value of the
property used for the convenience of the
public.
In addition to the authorities already
cited l beg to refer the committee to
the celebrated dictum of the learned
Justice Brewer In Ames VS.. Railway, "a
Federal Reports, page 176:
1.-THE foundation Of reasonableness is
Justice
In Smyth VS.. Ames. 100 U. s.. 466, the
Supreme Court says (page $40:
1.-The corporation may not be required to
use its property for the benefit of the
public without receiving just compensa-
ton for the services rendered.
And again, on page SAT:
what the company is entitled to ask
is a fair return upon the value of that
which it employs for the public con-
venience."