SELLING PRICES AND TERMS OF BUSIV QQ 



CHAPTER IX. 



SELLING PRICES AND TERMS OF BUSINESS. 



THERE is no difficulty in arriving at a mutually satisfac- 

 tory schedule of prices, if regard is had to the rights and 

 requirements of both parties concerned. The gas under- 

 taking is in no sense a public or philanthropic undertaking, 

 to be carried on for the benefit of the public or for the 

 relief of public expenditure, but should be run on business 

 lines, at a fair but not excessive profit. The consumer is 

 entitled to efficient service, at a moderate price, but the 

 price should not be cut so fine as simply to pay the bare 

 dividend. Unless a fair provision is made for depreciation 

 and contingencies, a time will come when the capital outlay 

 stands at its full value on the books, but nowhere else. It 

 may be that a large outlay for renewals is necessary and 

 there is no balance at the bank. The wise manager is not 

 satisfied with merely providing the dividend, but he takes 

 care to keep up the structural value of the property. Small 

 undertakings do not at any time earn large profits, 

 especially if the capital outlay is already excessive, and there 

 is too great a tendency to divide up every penny of the 

 available balance. Too frequently it will be found that the 

 shareholders have received 5 per cent, when the concern 

 has really earned only 3. Thi explanation is necessary, 

 because there is a very general idea that the working expen- 

 diture plus the sum required for dividend will represent ?. 



