The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1886-03-07
"a q
The Claim that Money Cannot Be Made at
&3 q Month q Mere Pretense.

In0 Claim CnaC money cannon f0 MADE at
&3 a Month a Mere Pretense.
New York Times fEditorial)
The Central Union Telephone Company, of In
diana, is playing a bluff game. 1t announces
with regret" that in view of the recent decision
of the Supreme Court sustaining the validity of
the law regulating telephone rentals and ~toll-line
charges lit has voted to decline all new business
in the larger cities, where it is impossible to
furnish service under the law without loss; to
forthwith give notice of the termination al the
earliest possible date of the contracts of all sub
scribers in such places; to make the continuance
of exchange business in smaller places dependent
on the possibility of continuing under the law
without loss, and to appeal to the Supreme Court
of the United States"
The company's pretense that it can make no
money at So a month rental for its telephone in
struments is humbug. The public is no longer
in the dark either as to the cost of telephone
instruments and maintenance or as to the
enormou profits which the Bell company and
the local companies under it's control have been
able to make with the extortionate charges hith-
erto imposed upon the public. When a telephone
instrument complete costs only $3.42, and the
total average expenditure for ''plant" for each
subscriber is only about $11. it is preposterous to
assert that the telephone business cannot be
made profitable at a charge of $50 a year to each
customer.
The motive Of the Indiana company in making
this announcement is sufficiently obvious. The
local companies are practically identicalNWith the
Bell company. Their interests are in its in
terests and their policy is determined by its Of
6cers. Until within a few months this gigantic
monopoly has been secure in the possession of it's
rich field of operations. It's fraudulent patent
had been fortified by judicial decisions obtained
as a result of c~ollusive suits. It had in its en-
ploy able and untiring patent lawyers, always
ready to pounce upon any rival who had the
temerity to enter its field, and 1t seemed to be
thoroughly sheltered against all possible perils.
But a sudden and alarming change has come
over its fortunes. The validity of Its
patent. which is the foundation of
its whole existence. is to be tested by the govern
ment which granted it. and there is an excellent
prospect that the fraud by which this monopoly
was built up will at last be fully exposed. and
that a remedy for the wrong that it has put upon
the public will be found in a repeal of the patent.
Another misfortune scarcely less disastrous has
befallen the company in a suit to test the consti-
tutionality of the Indiana Law restricting its
charges to So a month. The affirmation of the
constitutionality Of that law will lead to similar
legislation in other States, and the greedy com
pany is threatened with the loss of half of its
norm revenues. The price of its stock is
seriously affected, and the outlook for a con-
tinuance of large dividends upon its seven
times watered capital is extremely gloomy. The
company feels that it must do something, and
promptly, to meet and stay this evil turn in It's
fortunes. So it threatens to go out of business
altogether In Indiana. hoping that this bold move
will have the effect of preventing adverse legisla-
ton elsewhere.
We fear that the company will find these tao
tics totally Intellectual. 1t is now a well-settled
principle in this country that the people may find
a remedy in legislative action for the wrongs
from which they suffer at the hands of corpora
tons. The greedy and extortionate nature Of
the selephone monopoly is notorious. Con-
trolling a means of communication which
has now become indispensable to the busi-
ness and social life of the country, the com
pany takes advantage of the public's needs
to force from it every year an exorbitant tribute.
The public is tired of this e~xaction. and is in a
humor to use the means of defense which lie
ready to its hands. In every State where tele-
phones are used laws similar to that of which
the Indiana Supreme Court has just affirmed the
constitutionality should be passed Until the
government suit has been tried and concluded
this is the only remedy which can be made
available against the telephone companies. Sen.
ator Pierce has introduced a bill limiting tele-
phone charges in this State to SIS a month. A
similar bill was introduced in the Assembly the
first day Of the session. This legislation is just,
necessary, and in the public interest The Leg.
~islature should pass the bill. We have no fear
that the New York telephone companies will de-
cline to do business at SIS per month rental for
each instrument.