New-York tribune., 1920-06-30
Dollar Gas for
City Granted by
Federal Court
New Rate To Be Effective
Tomorrow and Until Final
Decision in Suit Pending
Before u. S. Tribunal
Eight Injunctions Issued
Special Master Is Named
to Hold the Difference Be-
tween New and Old Rates

Dollar gas became reality in New
York City yesterday.
Until the final determination Of the
rate litigation between the Consoi-
dated Gas Company and the state and
county authorities and the Public
Service Commission, now pending in
the United States District Court, to
declare the 80-cent gas law of 1906
confscatory and unconstitutional the
Consolidated and it's subsidiaries will
be allowed to charge, beginning to-
morrow, not exceeding 81 per 1000
cubic feet They are granted this
permission in eight injunction orders
filed by Federal Judges H. G. War,
John c. Knox and w. I. Grubb.
Richard Wellington is appointed
special master to hold the difference
between receipts at the S0-cent and
the newly authorized 81 rate for ulti-
mate disposition, according to the
determination of the main suit. If
tn, suit results in a victory for the
consumers, represented by the mu-
ilSlPdl duliiot illeo, tlC Olllc CllCc Will
be refunded; if victory Tor the gas
companies the moneys so held will be
turned over to them. The New York
Trust Company, the United States
Mortgage and Trust Company, and
the Title Guaranty and Trust Com
pany are made repositories of the
fund a verified statement Of which
shall be made by the companies to
Mr.. Wellington on August Is, and the
fifteenth day of each month thereafter
Referring to the recent findings of
Special Maste~ A. S. Gilbert, in which
he recommends to Federal Judge
julius M. Mayer that the statute of
1906, fixing the 80cent rate, be de-
clared in contravention of Article
Of the Fourte enth Amendment of the
Constitution, the court said:
"We have not to fix a rate, but to
determine if the statutory rate is void
because confscatory; and, if SO, to give
the plaintiff the protection which it
ought to have against conhscation
pending final judgment"
Old Rate Held Confiscatory
Adverting to the affidavits of the
Consolidated, covering its items Of ex
pense for operation for the year 1919
as an independent concern, and it's
bination with it's subsidiary corpora
tions, the decision holds that the evil
dence satisfies the court "that the
plaintiff is not now and has not been
able during 1919 and will not be able
in the future to manufacture and sell
gas at the statutory rate of so cents
with anything left for return upon
its investment. We think the rate is
confscatory."
Taking up the several legal objec-
tions against such a holding, the court
goes on to say:
"1t is suggested that period of ex-
perimentation has now elapsed suffi-
cient for us to say as to whether the
SO-cent rate is contiscatory. We think
it is quite sufficient. What the plain
tiff (the Consolidated) may earn by
reason of its interest in companies
engaged in selling electric current is
not to be considered in determining
what is a fair return on its gas bust
ness. The two operations are entirely
distinct, and we suppose it would be
hardly contended that if the plaintiff
lost money in its electric business
fair rate of return for its gas business
should be raised to cover that loss"
Answering the objection of the de-
PENDANTS that the gas companies are
not entitled to relief because they have
not furnished gas of the candle power
required tsy the statute, the court
says:
"The special master has found that
this is not the fact. But, if it were, it
would be no justification for confisca
ton of the plaintiffs property. Public
officials have taken no action to en-