The Telegraph-courier. [volume] (Kenosha, Wis.) 1888-1946, 1917-12-27
EMERGENCY Profits LARGE
Jity Attorney OF Racine in Answer Sent
to r. r. Commission Says Company's
Petition Is Based on Single
Months Business.

The city of Racine, which has taken
upon itself the burden of fighting the
battle against the proposed increase in
rates to be charged for gas by the
Wisconsin Gas and Electric Company,
has sent the Kenosha officials copies
Of the answer which it has fled with
the Wisconsin Railroad Commission.
The Racine city attorney strongly
pleads against any changes in the rates.
The brief of the city says in part:
"The failure of an established and
prosperous concern to have it's revenues
equal or exceed its expenses during one
month or several months, by reason of
an abnormal condition growing out of
the necessities of war, which condition
will in all likelihood be remedied with
In few months, can not be an excuse
for such a concern to invoke the aid
Of the emergency statute.
In January, 1911, rates for the gas
consumed at Racine were fixed by the
railroad commission The history of
all rate-making shows that in the great
majority of cases when rate is fixed
so as to give certain per cent rate
Of return in very few years, through
Increase of output, labor-saving devices
and other personal factors the per cent
rate of return has steadily risen so
that when the rate of return was fixed,
say at six or seven per cent, in a very
short time it rises to ten or twelve
per cent higher
'fThe history of e.Wisconsin Gas
and Electric Company is no exception
to the rule. The company's earnings
have increased from 1862 per cent of
return for interest and depreciation in
10l1 to 10 per cent in 1917 on the Ra-
cine property. The plant at the present
fine has an output equal to the output
the commission estimated it would have
In 1904. In matter of this kind the
past earnings of the plant are, we be-
heve, a matter to be carefully consid-
cred in determining whether an injury
is likely to occur to it's business through
some emergency In this connection
we desire to direct the commission s
attention to the fact that a 90 per
cent dividend was paid to the holders
Of common stock last year In view
of the uncertainties existing at that
time with relation to the war and bust
ness conditions generally, was tie
company justified in declaring such a
dividends Should the consumer at this
time be compelled to pay for it's short
sightedness of greed? Many business
concerns are satisfied at this time to
keep their business intact without MAX
ing any profits; hoping they will still
have a business at the end of the war.
The business of the Wisconsin Gas
and Electric Company is assured.
''The company desires the commits
sion to use as basis for its determine
tion the reproduction cost of the plant,
less depreciation. The city insists that
under the emergency statute in determ-
lining whether the interests OF the com
pany ire likely to be injured the true
basis is the actual cost, less depreciation.
''In our analysis of the situation as
set forth the city, of course, confined
itself to the income and expenses of
Racine. In this connection the city
calls attention 60 a table which shows
that in 1907, 95.5 per cent of the gas
delivered to the mains was consumed
in Racine, while in 1917 only 64.3 per
cent was consumed in Racine. The
number of consumers per mile of main
is much greater in Racine than in
Kenosha. Figures give Kenosha as
S3.9 and Racine 1926.
Tho cost Of Racine gas property OF
$3.50, 1861 as on June so, 1908, we believe
to be favorable to the company. Sucb
ccst is much higher per mile per main
than is found in cities, being $10,350
excluding overhead and paving, as
compared with an average of $6,7S5
and a medium of $3.50 for the plants
shown in table.
"Starting with the cost of $659,S51
on June 80, 1908, the cost for the
other years has been obtained by srb
tracing the additions to the orliel
years and adding the additions of later
years. Divividing the production prop
erty on the basis of the output we gel
in the table shown, showing the ga:
property apportioned in Racine; taking
he depreciation of 9 per cent shows the
property apportioned to Racine for 1907
S depreciation AS $990,000
''The gross income for Racine only
excluding depreciation is shown q:
$lS7,7sS; the per cent of return fol
interest and depreciation was there
fore over 1879. Taking out the depre
citation of $10,SS5, leaves $1,000;
available for interest and profit of lis
49, oa,+ mhn no~o,voa ~ nxaaoo of