Newark evening star and Newark advertiser., 1915-03-02
N|NETY-CENT GAS
AGAIN TARGET OF
PUBLIC SERVICE
Frank Bergen Begins Reargu-
n1ent in Passaic District Case
at Trenton.
from a STAFF Correspondent.

tion, a number of the largest cities
IN the State and the Public Utility
Commission appeared today before
the Court of Errors and Appeals in
the reargument of the ninety-cent
gas rate fixed for the Passaic district.
which includes the cities of Paterson
and Passaic.
This is the second hearing by the
court in this matter one decision
having been made December 9 last
At that time the court, by a vote of
six to four, set aside the rate fixed
by the commission. and overruled the
Supreme Court, which had confirmed
the act of the utility board.
Various legal representatives of
cities throughout the State. determin-
ing that the matter was of the great
est Importance, petitioned the Court
of Errors for a rehearing, which was
granted.
Frank Bergen, general counsel for
the Public Service Corporation, pre-
sented the case to the court this
forenoon. He was aided by Robert
FL. McCarter and Richard V. Linda
bury. Mr. Bergen announced at the
sumo the entire court day in making
his argument.
Eight Points.
Beginning with an outline Of the
history of the case, Mr.. Bergen made
his argument on eight points. These
were:
THAT the commission declared,
without evidence to support the
stat ement, that the rate charged by
tho company was unjust and unrea-
sonable.
THAT as a basis for a new rate
the commission estimated the cost of
reproducing, less depreciation, of
part only of the company's property
in the Passaic division. and ignored
the remainder.
That the commission underesti-
mated the value of the property
which 1t undertook to appraise, and
rejected undisputed evidence of its
true value.
THAT the commission rejected and
ignored large and substantial ele-
ments of the value of the property
of the company, such as (a) the
value created by uniting six smaller
comranies into one large and eff
cient ompany; (b) the value of the
speci. franchise of the company or
its right to construct, maintain and
use it's mains ard service pipes in
the public higl tyS, and (c) the
value of the property of the COM
pany as an income-producing entity
with an established business in a
favorable locality.
'That the commission ignored un-
questioned evidence Of the value OF
the property consisting of the amount
and market value of the lawful out
eta securities of the company,
=, consolidation agreement and the
Sc.
THAT at the of ninety cents
l5t~ thousand cubic feet the company
carnot earn fair return on the
res enable value of all Of its prop
ertv employed in the manufacture
and distribution Of gas in the Pas
ea' division.
"That the enforcement of the order
made by the Board Of Public Utility
Commissioners and brought up fer
review would have the effect of TAX
ing private property of the Public
Service Gas Company for public use
without just compensation, in VIOLA
tion of paragraph 16 of article I of
the constitution of this State; and
'That the enforcement of said or
der would take property of said COM
pany without due process of law. and
would deny to said company tue
equal protection of the laws, in vio-
lation of section one of the fourteenth
amendment of the constitution of the
United States.
"The fixing of a rate for public
service is a legislative function ex-
ciusively," continued Mr.. Bergen,
land courts have no control over an
order fixing rates, except to deter
mine whether il was made within
the authority of the law, or whether
its enforcement would violate any
constitutional rights of the utility
co. oration to which 1t is directed.
As we understand that there was no
difference of opinion on this subject,
either In the Su' RENE Court or in
this court, and as we can think of
no reason to question the correctness
of their decision. we will not discuss
the subject further"
Mr.. Bergen declared that gas was
one of the very few articles of mer-
chandise," as he termed it, that had
not risen in price since 1890. He cub
a,.tted to the court a diagram which
+ he said had been compiled from fig
ures obtained at the last Federal
census This showed that rent had
increased 70 per cent, taxes more
than so per cent. and food about 20
per cent.
II cost the company more than
forty-six cents per thousand cubic
feet to manufacture and distribute
gas in the Passaic division during
1911, and nearly fifty cents during
1912. This calculation did not figure
in the cost of the investment, accord
ing to Mr.. Bergen.
1.-THE cost to manufacture and dis
tribute gas In 1912 was not known at
the time the order under review was
made" said Mr.. Bergen. "The record
shows that in 1913 the company OBJ
tanned oil necessary in the manufac-
ture of gas at the rate of 2.S2 cents
per gallon, under a favorable contract
made several years ago. but which
was to expire on December 81. 1918.
The most favorable quotation for gas
oil that the company was then able
to obtain was five and half cents
per gallon. In New England the price
was in excess of six cents. The ten
dency of the price for such oil is up
ward. If the appellant should be
obliged to pay Ave and half cents per
gallon for gas oil hereafter, the in
crease in the price over that paid In
1918 would increase the cost of manu-
featuring gas in the Passaic division
by 12.0S cents per thousand cubic feet
or gas sold; that is. the cost of the
manufacture and distribution of gas
in the Passaic division would be g. 02
cents per thousand feet of gas sold or
1904 cents above the cost of 1911.
There is another fact that 1t Is but
fair to bear in mind as we proceed
with this discussion. Twenty years
ago the rate for gas in Paterson and
neighboring towns was 81 and up
wards, and several gas companies
were engaged in the business. Gas
was then used by a much smaller
Ia ku OF