The New York herald., 1922-03-07
U. S. Supreme Court Releases
S11,000,000 to Consoli-
dated and Its Stock Scars.
NEED NOT SELL AT A LOSS
Prendergast Sees Way to Re-
wise Charges and O'Brien
Plans to Keep Up Fight.

Action by Judge Learned Hand in
declaring the so cent gas rate con-
fiscatory and increasing it to as high
as $1.50 a year ago. was upheld by the
United States Supreme Court in a
unanimous decision handed down yes
terday
William A. Prendergast, chairman
of the Public Service Commission, said
the decision left that body free to de-
termine what is the reasonable rate
to-day. A proceeding is now pending
with that purpose in view.
"It is earnestly to be hoped" said
the chairman, that the city of New
York will be prepared to look at the
question of gas rates in the light of
the courts decision, which has estab-
lished beyond a question an uncon-
testable basis for the conference the
commission has already started be-
tween the city and the gas companies
to fix new rates"
Corporation Counsel J. p. O'Brien
expressed the opinion that inasmuch
as the rates fixed by Judge Hand were
based ON production costs in 1919 he
could prove that the lowered cost
would make an so cent rate fair to-
day.
Two Companies Now Affected.
The immediate effect OF the courts
decision will be to turn into the treasury
Of the Consolidated Gas Company about
ST 900, 900. being the money received
above the original 80 cent rate, and
which the court impoundcd with Richard
yelling as a special master pending
final adjudication. The Kings County
Lighting Company also was a direct
beneficiary by the decision to the extent
of about $1.152.641.
These were the only two companies d.
rectly involved in yesterdays decision
but II was taken as auguring a like re-
suit In the case or the other companies
all of whom have cases In court. The
Brooklyn Union Gas Company, for in
stance. stands to benefit to the extent
of S7,701.4 400. about twice the S3.427.425
deficit written onto the books last year
The entire amount inpounded from all
companies In the city is well above $685.
100000.
All local gas securities started to soar
the minute the news arrived from WASH
ington. Consolidated Gas, which opened
at 95a. shot UP to l061a sagging back
- before tho close. BROOKLYN Union
Gas. which opened at IS. gained a clean
ten points and held il right through to
the end of trading. The per cent. bonds
OF the Consolidated received heavy sup
port, making a gain of three points.
Consolidated Dividend sure.
IL was pointed out last night that the
next dividend of the Consolidated was
assured out of the impounded money Il
will receive. The last dividend was paid
out Of an extra cash dividend received
from the New York Edison Company.
Declaring that for the last three years
his company and its subsidiaries had
been subjected TO unsparing attack and
systematic misrepresentation, George Ii.
Cortclyou, president OF the Consolidated.
added:
ITO all OF this hostile campaign the
unanimous decision OF the highest court
comes as an emphatic and fitting rebuke
The decision Is OF nationwide importance,
as an augury OF justice and fair dealing
for public utilities and their investors.
1t probably win mark the end OF efforts
to fix gas rates rlgidly In response 10
political clamor and will lead to an era
of impartial, reasonable regulation ac-
cording to the facts and the law.
~ gas rate that is too low is as OBJ
jectionablc 10 the public interest as a
rate too high, and the unanimous de-
cision of the court vindicates this COM
panys action In contestng the so
cent law, in FORMULATING increased
rates subsequently and in reducing those
rates when decreased operating costs
permitted. Every essential contention
OF this company Is unanimously sus-
tained by the highest court.
1.-THE statement made by the Corpora
tion Counsel is of the same character as
his previous statements. unanimously
repudiated by the nations great court
His allegations now are as false and
specious as they have always been and
as the Supreme Court has unanimously
found them to be-"
O,BrIen TO Continue Rnte Fight.
"I. should be borne In mind that the
decision Of the court relates only TO
the years 1918 and 1919 and therefore
is not conclusive as TO what Is n fair
price for gas under the present day
condition." said Corporation Counsel
O'Brien in part.
",rhat the present price. fairly charge
able to gas consumers in this city. should
be not more than so cents Is clear
when we consider that Judge Hand,
whose decision apparently has been af-
nrmed by the United States Supreme
Court, found that the company derived
over and above all expenses of every
kind and nature, even Including in
come tax as an operating expense. sos