Evening star. [volume] (Washington, D.C.) 1854-1972, 1912-08-24
Further Increases Authorized.

subsequently, by an act approved June
| 6. 1896, entitled An act relating to the
sale of gas in the District Of Columbia,
the company was authorized, under Sec
ton ), to still further increase it's capital
stock to an amount equal to the actual
cash value of the plant and the necessary
cost of further extension or further en-
largement Of the plant, it's cash value
and cost to be ascertained by a proceed
ing under the direction of the Supreme
Court OF the District of Columbia.
1.-THE last provision of the act quoted
is the first word by Congress in recog-
milton of the outstanding certificates of
Indebtedness formerly issued by the COM
pany. 1t will be noted that this provis-
ion authorizes their conversion into capi-
tai stock to an amount not exceeding
100000. The court records of the Dis
trict of Columbia and of the United
States Supreme Court disclose that the
company sought to increase its capital
stock under provisions OF section above
quoted. A petition was filed by the COM
pany in the trial court of the District. in
which it was prayed that there might be
judicial investigation as to the value
of the plant and that the company might
be authorized to increase its capital stock
to the full value thereof as provided In
the act.
THE Commissioners Of the District of
Columbia appeared in the suit and ques-
toned the constitutionality of the act on
the ground that the same vested the jul
dietary with power unauthorized by the
Constitution.
Pending the trial in the District Court,
the Commissioners filed a petition in the
Court of Appeals asking for a writ of pro-
htbition directed to the trial court against
further proceedings in the suit brought by
the company to increase its capital stock.
Court Sustains Petition.
The Court Of Appeals sustained the
petition and granted the writ of pro-
hibition. from which judgment the
Washington Gas Light Company APP
pealed to the Supreme Court of the
United States February %. 1908
Pending the appeal in said court and
before the case had been reached for
submission, Congress attached to the
annual appropriation bill for the Dis
trict of Columbia, approved March 3,
1909. the following proviso:
Provided, That section Of AN act
relating to the sale of gas in the Dis
trict of Columbia" approved June g.,
1895, and all remedies therein provided
be, and the same are hereby. repealed,
and all pending proceedings Hereunder
shall be vacated, and no Judgment, de-
cree, finding. permit or valuation of
any kind mentioned or intended to be
mentioned in said section shall be made
or ascertained. Par ,, CHI. 80, 30
stat. L., T03.)
This proviso not only repealed section
) of the 1886 act, but it also ended the
lawsuit involving the right of the COM
pany to increase it's capitalization then
pending on appeal in the Supreme Court
of the United States. This proviso also
vacated all proceedings had under sec
ton ., by the company, including the au-
thority to convert 100000 of certificates
into capital stock; SO that it is a serious
question whether the conversion of the
100000 of certificates of Indebtedness be-
fore referred to into capital stock is valid
Congress has no information as to when
this conversion was made. The only evil
dence 1t has Is that the capital stock was
at some time or another Increased by the
amount Of $6OO.O00. This evidence is to
be found in the last annual report of the
company giving its outstanding cap:tal
stock as $2,6OOOOO.
1T may be said in this connection
that while the appropriation act Of
1909 for the. District Of Columbia was
not approved until March ), 1909, i'm
which section 5 of the 1896 statute
was repealed. there was pending in the
Senate g Gill entitled An act to regu-
late the price Of gas i'm the District Of
Columbia, and for other PURPOSES 1t
likewise repealed said section and at
the same time authorized an increase
of the capital stock of the company to
an amount sufficient to cover oustand-
Indebtedness This bill, however. was
never reported back to the Senate from
the committee to which 1t was referred.
Deductions by the Committee.
From the legislative history of the
company since it's charter was granted
in 1848. it is clear:
First, that the capitalization of the
company is within the control of Con-
gress.
Second. That the company has ac-
cepted such authorizations as Congress
has given 1T and has acted Hereunder.
Third. That the company awaited itself
of that portion of section = (since repeal
edD OF the 1895 act. authorizing it to con-
vert certificates of Indebtedness III the
sum Of 100000 into capital stock.
Fourth. That the certificates of indebt-
edness were issued without any express
authority of law: their validity and so
much of the capital stock as they repre-
sent is therefore open to serious ques-
ton.
Fifth. II 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.
1T IL obvious that Congress never In