The New York herald., 1920-01-28
KINGS COMPANY MUST GIVE
80 CENT GAS; COURT ORDERS
100000 REBATE TO CONSUMERS
Corporation Told to Try Low Rate Before Pleading 1t Con-
fiscatory-Justlce Greenbauni Declares Quality oProd-
uct In 1913 AlwaysWas Below Legal Standard

Justice Samuel Gruenbaum, IN the Ei.
preIne Court. yesterday dismissed tho
complaint OF the kings County Lighting
Company IN Its application for an injuno.
ton restraining tho Attorney General, the
Public Service Commission and tho city
Of New York from enforcing the 0-cent
gas law. which tho company contended
was unconstitutional and confisoatory.
Not only did the Justice hold that tho
company had failed 20 establish its right
20 charge a higher rate. but he declared
the corporation had deliberately inflated
its corporate stock value and indebted"
ness by s1.oooo0o, failed to avail itself OF
testimony which would have shown con-
clusively the original cost Of the plant
and fIagrantly violated tho law In sellins
an inferior quality OF gas than required
by statute
observance Of the law Is cardinal
principle which Is obligatory upon him
who seeks judgment in equity" COM
mcnted the Justice in hts sweeping deci-
sion, While the law fixes a standard OF
twenty-five candle power for gas dis
tributed In New York, evidence at the
trial was convincing proof that the cor
poration furnished its consumers a quality
sometimes as low as ten candle power,
and never met the legal requirements dur
ing 1918
Consumers to Receive S400,0o0,
Since July l. 1915 when the company
began its fight against the law, consum
ers have been required TO pay 9S cents
for thousand cubic feet Of gas, the
excess amount being at first impounded
and later released after the corporation
provided a bond to insure It's return In
the event of an adverse decision, Under
Justice Greenbaum's findings almost
Ma h1y ..of1 1Staf, Nxrtn ho
turned with interest.
The company sued to declare void chap
ter 6N OF the Laws of 1916, which fixed the
price OF gas sold to the residents In the
Thirtieth and Thirty-first wards, Brook
lyn. at eighty cents thousand cubic feet
Eighty-three days were devoted to the
trial before the decision was rendered. and
the case has been pending In the courts
since 1916,
Expert accountants employed by the city
had not nlade a complete examination of
the company's books which would enable
them to verify the correctness OF entries
bearing on the cost of the plant and ex-
penses of operation. and they insisted that
strict proof be adduced at the trial, which
served to delay final adjudication.
The company was the successor Of the
Kings County Gas and Illuminating Com
pany, and its books as of July l. 1901,
showed an issue Of &. .000,0C0 worth OF stock
instead OF 100000, which appeared on it's
predecessors records.
AssaiIs Company's Financing.
There was not the slightest evidence
adduced which would show any warrant
for this increased capitalization and the
increased bonded indebtedness" said JUS
tce Greenbaum. In fact, the transaction
was an arbitrary new book value Of the
properties through the medium of a newt
corporation apparently organized for that
express purpose.
The plaintiff contends that the present.
reproduction cost forms the proper basisI
for valuation OF It's plant The city insists
that the actual original costs form the
proper basis. The unsatisfactory charac-
Ter OF so-called experts opinion on the
valuation OF alphabetically reproduced
plant az given time must be apparent TO
every one who has had experience with
that Kind OF testimony. The Court has
therefore taken into consideration in de- |
termining the present value OF the plain
tiff's business both the original and est.-
mated reproduction cost of construction,
1t Is thus clearly established that since
the inception of the plaintiff It has real
lied substantial income and has been
fully compensated for the expenses in
CURED in developing its business and that
IL would therefore not be entitled to now
add anything for going value.
1t must be always borne in mind that
IN rate cases the burden is upon the plain
tiff TO establish confiscation beyond doubt
On the question OF original cost prior to
1901. the plaintiff has deliberately re-
Trained from calling witnesses who are
still alive and some of whom are stu
connected with it who could have testified
as to whether the books of the predecessor
company, TO which il succeeded, were not
accessible and who. even in the absence OF
such books might have thrown flood OF
light upon the matters involving the
original cost of construction"
Higher Value on Property.
Justice Greenbaum said that he was
justified in applying the rule that the
plaintiffs failure TO call these witness i'm
piled that their testimony would have
been unfavorable in it's character. Ex-
perts testified for the city that a fair
depreciation allowed the company for
seventeen years would be fifteen per cent
based upon a valuation OF s2.299307 for
the plant and land. The Justice put
slightly higher valuation in his findings
holding the property and land to be worth
s2,502 695.
The failure of the company TO apply an
eighty cent rate as an experiment was Of
itself important in defeating the claim
that the rate was confiscatory in the JUS
tees opinion. 1T is obvious that unless
the evidence is conclusive that conflsca-
that it would be mere speculation In the
absence Of an actual experimentation 10
find whether the increased business would
or would not sufficiently overcome the
reduction in price," he said. Under such
circumstances the plaintiff would not meet
the burden Of proof that rested upon it.
At the trial, tho company submitted a
table of operating expenses, which in
cluded an item Of $500 paid TO oncl
Byrne. its retired superintendent. Justice
Greenbaum said il was highly improper
10 introduce what was mere gratulty
into rate case.
Observed Law IN other Years.
The Justice then took up the quality of
gas furnished by the corporation.
During the entire year OF 1918 the plain
tiff continuously furnished gas OF a
candle power below the legal standard of
twenty-five candle power, and varying
from maximum OF 1874 candles to a
minimum point average Of Ills candles,
he said.
There was not n single day during
1918 when the plaintiff furnished gas up TO
r.. ..I III Tasae