The Sun and the New York herald., 1920-06-30
81 GAS IS ALLOWED
BY DISTRICT COURT
Concession Will Stand Until
Final Decision by U. ).
Supreme Court.
EXCESS PROFITS HELD
They Go Back to Consumer II
90 Cent Rate Is Again
Enforced.
EXCESS PROFITS HELD

Beginning tomorrow gas companies
serving all New York, excepting Staten
Island, will be allowed to charge u Tor
every 1000 cubic feet OF gas Sold In
stead Of 80 cents. This permission was
authorized temporarily by Judges ward
Mayer and Knox OF the United states
District Court. who signed orders IN
validating the so cent gas law penang
an appeal by the companies to the
United States Supreme Court.
Unless they change their present an
nounced intentions, the. gas companies
will put into effect the full 81 rate thus
authorized. Under the terms OF the tenn
porary orders they must set aside the
difference between what they now charge
and what they intend to charge ana
must refund the surplus In the event
that the Supreme Court denies their
pleas. As in 1906, when a similar nght
was waged by the gas companies, they
base their appeal on the ground that
the 80 cent law Is confiscatory and
therefore unconstitutional.
The Consolidated Gas Company, six
subsidiary companies serving Queens
and The Bronx and the Kings County
Lighting Company won their temporary
victory in litigation for higher rates,
and by the terms Of the decision they
must deposit with Richard yelling, ap-
pointed a special master for the purpose,
the excess funds over and above the 80
cent rate. The excess fund is to be de-
posted beginning August Is and on the
18th Of each month thereafter until the
validity Of the law Is determined finally.
II the companies lose the money thus
set aside will be refunded to consumers.
The Standard Gas Light Company OF
New Yorf, the Central Union Gas COM
pany the Northern Union Gas Company
the New Amsterdam Gas Company, the
New York Mutual Gas Light Company
the East River Gas Company OF Long
Island City are the subsidiaries OF the
Consolidated Gas Company.
The orders have n precedent In the
case OF the Brooklyn Union Gas Com
pany. also one OF the contestants of the
constitutionality OF the statutory rate.
That company was permitted recently to
charge 97 cents per 1000 cubic feet un-
til the law Is tested and passed upon by
the highest court. In all these cases the
orders are directed against the Attor-
ney-G General, Charles d. Newton; Lewis
Nixon, Public Service Commissioner;
District Attorney Swami and the District
Attorneys of the three other counties
and restrain these officials from enforc-
ing any of the laws provisions.
In granting yesterdays sanction of the
81 rate the court held that since 1915 the
gas companies have been operated at a
loss and are unable 10 continue the man
ufacture of gas at the price stipulated
by law. I'VE think the rate is confisca-
TRY" the Federal Judges said in COM
ment.
The decision was predlcated upon
report Of Abraham S. Gilbert, who as
special master designated to take evil
dence recently arrived at the conclusion
that rising costs Of labor and materials
entering Into the making of gas COM
PEELED an increase in the price to the
consumer II the companies were to earn
a return upon their investment. The
opposition of State and city authorities
was based chiefly on the charges that
the companies had squandered money
prodigally had padded costs and other
wise juggled their books to show deficits
which were in reality fictitious.
One opinion expressed by the court
disposed OF arguments that some of the
companies derived large revenue from
electric lighting or other channels by
declaring that what the plaintiff may
earn by reason OF its interest In COM
panies engaged in furnishing electric
current Is not to be considered in de-
terminlng what Is fair return on its
gas business. The two operations are
entirely distinct and we suppose II
would hardly be contended that If the
plaintiff had lost money. In its electric
business a fair rate of return for its
gas business should be raised to cover
that loss"
Robert Il. Livingston of the Consoll-
dated Gas Company said last night that
the gas companies would have their
hands full taking advantage of the tenn
porary victory, inasmuch as It involved
readJustment OF all bills and collections
and the mechanical readjustment of
$4,000 prepayment or quarter" meters
OF the Consolidated company.
IT Is estimated that about $1,000 900 a
year would be set aside for rebate pur-
poses under the new 81 rate to be ex-
acted by the Consolidated as Company.
John p. O'Brien, Corporation Counsel.
declared that IL his petition for leave
to intervene and become a party.de-
fendant in the gas company cases ia
granted-it is now pending before
Judge Learned Hand of the United
States District Court-he would pro-
ceed as first step to contest the orders
and ask that they be vacated. The CITY.
he promised, would oppose to the ut
most this temporary collection of a
higher rate. Previous experience has
proved that the money so collected mas
never been returned in full. even after
the companies lost their suits in the
courts, he added.