The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-07-31
BROOKLYN GAS co.
!, WINS RATE FIGHT
Charles E. Hughes as Referee
Rules Legislative Act Is
Confiscatory.
P. 8. c. ACTION INVALID
1925 Charge for Coney Island,
Gravesend and Part of
Flatbush Expected.

The Brooklyn Borough Gas Company
will raise the rate for gas supplied to
Coney Island, Gravesend and part Of
F1atbush to s1.25 a thousand feet In the
near future as the result of an opinion
made public yesterday by Charles Evans
Hughes in which he holds that the COM
pany Is not bound by the 1916 act OF the
Legislature limiting the charge to so
cents thousand feet or by the ruling OF
the Public Service Commission in 1918
allowing n charge OF IS cents a thou
sand feet.
In the opinion the former United
States Supreme Court Justice held that
the rates set by the Legislature we're
confscatory and the 95 cent rate of the
Public Service Commission eventually
would prove too low. Mr.. Hughes was
appointed as referee by the Supreme
Court to hear and determine" the whole
question and his opinion therefore be-
comes the judgment of the court, ac-
cording to counsel for the company. 1t
is believed that the case will be appealed.
The business OF the Brooklyn Borough
Gas Company lasts for part of each year
only. The districts served are not con-
gested and the population is more or
less scattered. even in the summer.
Appeal by Company.
In 1918 the Public Service Commission
after an investigation ruled that the
company should reduce its rate from
BLOB a thousand feet to 95 cents, and
this was done. Tn 1915 the State Leg
islature fixed the so cent rate and the
company made an appeal to the court in
the form Of an injunction suit against
the city. the Attorney-General. the Pub
lie Service Commission and the District
hat bn 70
was confiscatory and therefore void.
Pending the referees opinion the 81.
cent rate was continued.
The hearing before Mr.. Hughes ex-
tended over the larger part Of q year
and a vigorous defence was put in by the
commission. the Corporation Counsel and
the Attorney-General.
The opinion not only holds that the
commission and Legislatures rates are
confscatory as far as this company Is
concerned but that the action OF the lat
ter has taken the power OF fixing the
company's rates away from the former.
II this Is sustained by the higher courts
the company will have the right to fix
Its own rates.
Mr.. HuRhes's Findings.
Mr.. Hughes held, frst, that the so
cent rate for private consumers is the
present statutory maximum for the
Brooklyn Borough Company. and is pal
pably confiscatory, the plaintiff being en-
titled to judgment restraining its en-
forcement.
Second, that relief against the so cent
rate restores the company to its former
position that in consequence II does not
appear that gas furnished to the city
at wholesale statutory rate Of IS cents
would reduce the company's total profits
so as to render them insufficient, or that
It Is required to furnish this gas without
substantial remuneration, and that ac-
cordngly no case had been made for
invalidating that rate for gas supplied
TO the city.
Third. that the Public Service COM
mission has no power to fix a rate in
excess of statutory maximum. and
that the IS cent rate fixed by the COM
mission does not allow the company a
fair return under existing conditions
Fourth, that the 81 statutory rate to
private consumers Is not revived by the
decision.
Fifth. that the court has no power to
Tx what is a reasonable rate.
other Companies.
1t was made clear in the offices OF the
Public Service Commission after Mr.
Hughess opinion was rendered that II
does not affect any other companies than
the Brooklyn Borough Gas Company
A proceeding which resembles the one
which Mr. Hughes has Just passed upon
Is perSling before a referee. 1t has been
started by the Kings County Lighting
Company.
If that opinion should be as favorable
10 the company as the one just handed
down 1t Is said that the other big gas
producing companies which are held
down to an so cent rate will begin SINH
lar proceedings. The companies main
tain that the cost OF producing gas has
risen sharply since the beginning OF the
world war and that they should receive
higher rate for their product.
Edward NJ. Bassett. counsel for the
Brooklyn Borough Gas Company, said
yesterday
'The outcome of the case thus far
SHOWS the unwisdom OF the Legislature
In creating commission TO fix fair
rates after careful Investigation and
then continuing to pass laws fixing new
ratAa without any tprae,Ioa,in, Ill