Evening star. [volume] (Washington, D.C.) 1854-1972, 1916-09-03
By I. A. FLEMING.

Local utility shares have not been
in especial favor with investors for
some time past, nor Is there mucn
prospect for q restoration of position
in the near future.
Tho appointment OF a public utilities
commission, the order for physical ap-
praisement, the initial results of two
physical valuations, at wide variance
with the expert appraisals made for the
corporations: the apparent impossi-
bility of an economical union Of the
utility corporations and last, but b,
no means least, the jolt given the two
gas-producing corporations of the Dis
trict in a reduction of the price OF
their product. have had an unfavorable
effect on investment operations in the
shares OF local utilities.
Even the bonds, for years holding at
much higher price average than &C
corded to high-grade issues on Wall
street. are seeking lower levels.
The cut in the price of gas was be-
lieved as next to impossible while the
utility commission was laboring with
valuation-perhaps. without demand
from any organized association-and
I but little. If any, effort was directed
toward the defeat of the measure.
Howard S. Reside. president of the
Washington Gas Company. returned
from his vacation and spent a couple
OF days In the city. but left convinced
that the measure would be fought out
IN the House, but more or less suro of
the enactment of the lower rates.
Some of the lawmakers in the House
held the fact that the company was
selling gas to the government at IS
cents as an argument that the people
should have the same rate.
Debate in the House was limited to
two or three pages of the Congress
sional Record. in the course of which
Representative Caldwell of New York
called attention to the well known Con-
solidated Gas case and the Supreme
Court ruling, in which 1t was declared
that corporation was entitled to earn
fair return on invested capital, and
assured the House that the gas COM
tected."
Will Probably Go to Court.
This in itself foreshadows an appeal
either by the directors of the corpora
tons involved or by shareholders, when
the case will be given due consideration
1t was cited in the Senate, in broachins
| the subject of cheaper gas, that the
Washington Gas Company was paying "a
per cent on its stock. without mention
Of the fact that the capital stock 81, 600,-
600, is exactly the. same as at the time
of the formation of the company, though
s4,059. 900 gold coupon bonds have been
| issued. which. in part, were given te
| holders Of $2.600.000 certificates of in
| debtedness some years ago.
The Washington Gas Company carries
| its property on its books at $4,000. 900
| An appraisement made for the company
some years ago placed it at SIS, 000, 900.
Statistics Showing Effect.
At an average price Of o.s2s1 per thou.
sand cubic feet, the Washington Ga.
Company sold, in the last calendar year
| $2,247,515.4s worth of gas.
| At an average price Of 70 cents pei
| thousand cubic feet, the company would
receive. based on the production of 1915
$1.S7S, S34.S7, a net loss of $268,68O.
While the business of the corporation
has been steadily increasing, it has no
! been at a sufficient rate to Offset thi
| loss. which would mean inability t,
maintain the present $3.50 a share divi
dend. provided that the courts sustain
the lower rate.
The same would be true with tn