New-York tribune., 1920-02-11
8O-Cent Gas
Rate Enjoined
By U. S. Court
Brooklyn Union Company
Gets Injunction Restrain
ing Enforcement Pending
Hearing of Suit in Equity
Price to Advance March j
Judges Rule That Corpora
ton Has Not Enjoyed
Fair Return OH CAPITAL

A temporary injunction restraining
state and municipal officials from en-
forcing the S0cent gas law was grant
ed to the Brooklyn Unisn Gas Com
pany yesterday in the United States
District Court by Judges Henry G..
Ward, Julius NJ. Mayer and John c.
Knox.
The injunction is to continue until
August l pending hearing of the
gas company's suit in equity attack
ing the constitutionality Of the law
on the ground that it is confiscatory.
and 1T may be extended if the court
does not arrive at final decision bv
that date
The Brooklyn Union Gas Company
is required to file bond to reimburse
consumers should the law he held con-
stitutiona.
New Rate Not Yet Announced
The action Of the court permits the
company to put into effect immediately
new rate for its gas. This company
IS the. largest in Brooklyn and the ad-
vance will affect most of the nonule-
ton What the rate will be is as vet
unknown, according to James II. Jour
dan, president of the corporation.
Mr.. Jourdan said yesterday that the
S0-cent rate will continue until March
l. Asked whether it would be ST .O5 q
thousand feet, the figure requested by
the company from the Public Service
| ~
med, he said no set rate had been
arrived at. In some quarters it is said
that the charge may be $12O
AT the offices of the Public Service
commission last night it was stated
that an appeal probably would be taken
to the United States Supreme Court
and an effort made ''to see that as low
a rate as is possible under the court
decision shall be imposed, and in order
70 protect the consumers the commits
sion will apply to the court for the i'm
pounding of the amount of the differ
ence between tre SO-cent rate and any
higher tariff which may be established
pending the final adjudication of the
case by the courts
Rate Has Been Fixed by Law
The fight on Chapter 125 Of the New
York State laws of 1906, fixing the
price for illuminating gas in BROOKLYN
at eighty cents and requiring the gas
TO be twenty-five candle power was
commenced in 1909, when the United
States Supreme Court upheld its con
stitutionality
When the Public Service Commission
refused to sanction the $l.O5 rate. the
company brought suit against Public
service Commissioner Nixon and the
case was argued in the United States
District Court on January 2S. Will
lam n. pyckman appeared for the
company. While Ely 4. Neuman was vas
counsel for Commissioner Nixon. Mr.
Dyckman presented figures intended to
show that his client had lost $20,495. .43
during 1919 and that under present con-
dltions its loss amounts to 81 900 a
day.
Mr.. Neuman charged that the COM
pany had padded its expense accounts
IN such manner as to turn profit
into seeming loss. He pointed out
apparently conflicting figures, saying
/ that at one point the capitalization
was given at 500 900, 900 and at another
place at S35,000000 He also ques-
/ toned the figures on income.
No Fair Return. Court Holds
down yesterday in this connection
reads: while upon the other affida-
Wits submitted 1t is impossible to state
accurately the amount Of capital in
vested and the cost of manufacturing
and distributing the gas sold, we are
convinced that there was no fair re-
turn In 1918 on the plaintiffs capital
invested and that IN 1919 there was
no return at all"
The opinion adds that it will be
necessary to ascertain the actual fig
ures upon the examination of the plain
tiff's books and the examination and
the ross-examination of witnesses be-
fore a skilled master.
1--WE have no doubt the opinion
reads, "of the plaintiffs right to come
into equity. The penalty for violation
of the act is so great that it could not
test its constitutionality by raising its
rates except at the risk of complete
annihlation. This makes the act un-
constitutional on its face.
"The plaintiff explains its failure
to give the required 22-candlepower
! by showing that between January l