The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-07-23
|SAYS SOC. DOESN'T.
| MEET COST OF GAS
Consolidated Has Lost So, $780,
600 in 10 Months, Counsel
Tells Examiner.
LONG HEARING OPENS
Haywood Points Out Quality
Is Not Acknowledgements
Will Amend Complaint.

Hearings in the suit OF the Console
dated Gas Company to cause the 10
cent gas law to be set aside as con-
fscatory were begun yesterday In the
Federal Court Offices in the Woolworth
Building. The hearings will continue
until September Is before Abraham o.
Gilbert as special master by appoint
ment Of the Federal Court.
General. Newton and District
Attorney Swami are the defendants
Corporation Counsel Burr is counsel Tor
the District Attorney. Representing the
defendants in court are w. w. Cham
bers, deputy State Attorney General;
John H. O'Brien, Assistant Corporation
Counsel, and Col william H. Hayward
former Public Service Commissioner.
William L. Ransom of counsel for the
gas company outlined the situation
which the gas company contends makes
authorization to charge a higher rate
necessary. He explained that the Public
Service Commission is without power 10
60 to the relief of the company in the
absence of a court decree that the law
is unconstitutional This creates an
anomalous situation. The commission
wa created to supervise public service
corporations, 80 that they might oper-
ate In the public interest with fair re-
turn to their investors.
Mr. Ransom said that the decree OF
the United States Supreme Court when
sustained the so cent rate in 1sO9 dlo
60 only to the extent OF ordering that a
trial be had of operation at that rate.
The company failed to earn fair re-
turn even prior to the time when the
war caused the costs for labor and ma
terials to skyrocket, he said. The pro-
ceeding Is not to cause the determine
ton of a new rate but only to provide
an opportunity for proof that the exist
ing rate Is conflscatory.
THE so cent rate does not yield
the company a fair return. or any re-
turn, upon the property used by 1t in It's
business" Mr. Ransom said. The com
pany's loss during 1918 and the hrst
six months OF 1919 amounts to nearly
$6,750,OoO. Month by month the COM
pany and its investors are being called
upon to pay many thousands OF dollars
| to meet bare operating expenses.
The continuous. dependable supply OF
gas to this company's 100000 consum-
ers, day by day under all the varied
conditions OF weather and demand, has
necessitated the development OF vast
property whose value this Federal court
found fourteen years ago to be In ex-
cess OF SIS 100000 and to which more
than sls 900, 900 of tangible property,
over and above retirements, has been
added during the succeeding years, max
inc not less than s70.00o,000 on which
it 70 al
But the confscatory character Of the
so cent rate and statute depends on
no inquiry into aggregates of value.
II this company used mo property in its
gas business II would be entitled TO
charge more than so cents. The existing
rate does not pay operating expenses.
The rate has never yielded anything like
a fair return on the company's invest
merit. A valuation in excess of 10000
goo can be proved. but only a fraction
J Of that total would need be shown to
demonstrate the confscatory conse-
| quences OF the statutory limitation.
THE fiscal history OF this company
| for the past twelve years has been con-
tinuously under the scrutiny OF the Pub
lie Service Commission. This case ought
to he susceptible of proof from the
records OF the defendants themselves"
Mr.. O'Brien moved to dismiss the
complaint on the kTouhu uat IL ulu Ho'
state sufficient facts regarding the val
! uaton of the company's property and
because it did not show that the COM
pany was sufficiently economical in run
ming it's business
Col Hayward supported the motion or
| the ground that the complaint did not
| show that gas of the quality fixed by
law had been furnished to consumers
Unless the company is furnishing gas
Of the required standard, this proceeding
| is meaningless" he said. There is nc
allegation here that gas of that quality
| has been furnished"
q, The master, in denying the motion
said Col. Hayward's point was vel
taken, but that the company might have
an opportunity to amend ats complaint