The herald., 1894-05-02
TALK ABOUT TELEPHONE TOLLS
The Sunset Officials Submit
Some Figures.
They Claim That They Are Losing
Money.
Financial Review of Affairs of the
Local Company Disclosed by the
Officials YesterdRy-The Com
mittoe Favor Red uction.

The councilmanic committee on the
regulation of the rates for telephone
charges held meeting yesterday with
Mr.. Munson in the chair. President
John I. Sabin OF the Sunset Telephone
company of San Francisco and Electro
clan Glass of the same concern. which
controls the local telephone company,
were present.
President Sabin, on behalf OF the tele-
phone company, submitted the follow
ing statement of its financial operations:
The gross receipts for 1893 in Los An
geles were s77, 472.s0. and the expenses
$73,767.36. With the royalties RENTED
after January 80. 1894, $3.50 are added
to the net profit in 1893. the total cum,
$lO,S55. would only net 6% per cent
upon the assessed valuation. The cap
ital OF the company is 100000, and
the actual expenditure in cash over
$4,000, 600. The company pays 8 per
cent per annum on its stock. Since
1890 its dividends have amounted to
only $87 600. or e per cent per annum,
the balance having gone into the plant.
The stock is selling in San Francisco at
$40 per share, or 81 200, 900 for the whole
plant, which cost $2.00o,000. The bond
ed indebtedness is $4,000, though but
a small part OF these bonds have been
sold.
President Sabin then made a state
ment that there was but little money in
the telephone business, contrary to pub
lie opinion on the subject, and claimed
hot ka kxo in
creases, and the telephone plant does
not follow the usual law of Wholesale
and retail trade. On the other hand
ately than small ones.
Mr.. Munson said that was peculiar,
and wanted to know why it didn't follow
the same law as railroads-the more
carried the greater the profits. Mr..
Sabin said telephone wires were not like
tracks. The tracks were in use more
than the wires. In this city 1850 wires
stand idle large part of the time. All
the wires are carried underground in
the business center, and in time they
must also be put into business blocks
the same way, and all this means very
heavy expenses. Subscribers who do
the most switching are charged more 80
as to enable less rate to others and q
consequent increase of subscribers.
Moderate users OF the phone here now
are paying less than in other cities.
|. The maximum rate of Sc month was
changed to 81 and cents switch 30 as
to make a proper sliding scale of prices
and have those who use the phones
most pay in accordance. The idea 10 to
| cut down the main rental and by such
an arrangement charging uniform rates
like in Boston, where the rate is $40 and
| $l6 uniformly. Yet he considered that
| rate not exorbitant. remembering the
excellent service rendered.
Mr.. Munson There is going to be
telephone competition in Los Angeles.
and we are of the opinion that the rates
will have to come down.
President Sabn stated the opposition
company would learn that they could
make no money at low rates. Further
more experience has shown that cities
only want one system. II there are two
they will have to use both more or less,
and there will be two bills to pay in
stead of one. New York has 10000 tel
ephones and the machinery for them
cost 100000. The Sunset stock is on
the market, and that shows the company
is not paying big dividends, The COM
pany proposes to open an exchange in
the southwest part of the city, and by
placing four or five magnetic telephones
on circuit, the cost might in that way
be reduced in that section to So month.
The committee interposed that this was
the very part of town where most rich
people live who can best afford to pay for
telephones. The company's representa-.
tlves continued to make showing OF re-
duced revenue, stating that they are not
now making installation charges except
where long line and poles are to be put
up. The Boyle Heights and st. James
Park lines were no source of revenue. II
may be years before they pay anything
| Mr.. Nickel stated it was a very easy
matter to make figures, but he thought
the bill of expenses of the company was
Unfortunately large. The committee de-
cided to take the matter under consid
Grafton for the present.