The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1896-11-13
DIFFICULTIES OF TELEPHONE COM
PETITION.

The following letter to the Evening
Post" lays bare some of the inside facts
connected with the cost of installing and
operating a telephone exchange
To the Editor of the Evening Posty:-
Sir-The statement made by Mr.. Slaxzon
IN his letter on the telephone question is
really most amusing Would he have
government has employed ex-Solicitor
General Aldrich for no other purpose than
70 destroy one monopoly that another
may ~thriye?. Yet that is the natural and
me only Inference we can draw if Mr..
Aiarich's company really owns or con-
trolls patents that would give that coma
PAM a more exclusive monopoly of the
telephone business h the Bell enioys.v
| do not believe the United States Off
Gals are engaged in that kind of a
scheme, while / do believe that if the
Seriiner and the Edison patents are de-
clared invalid it win not materially
change the present policy of the Bell
companies Blu the cancellation Of the
patents viii afford an excellent oppor-
tun1ty for adventurers to inveigle unsus-
pecting and inexperienced investors intos
attempting to establish competing tele-
phone exchanges in our larger cities,
where, IN the very nature of the service,
the lepho exchange must ever remain
a natural monopoly, and two or more
exchanges prove a burden that the pro-
gressiye merchants must endure and sup
port We now have two telephone COM
panies in Trenton, and a third is getting
under way.
When a new telephone COMPANY at
tempts to secure a foothold in a large
city, il finds that one of the great prob
lens it must solve lies, not in the total
number of subscribers 1t can secure, but
In the lumber of desirable subscribers
that will prove permanent and paying
patrons For the service of a telephone
exchange Increases in value in the same
ratio as the names of the desirable ele-
ments in the community are added to its
lists of subscribers. In other words,
while a newspaper circulating only among
saloons and read principally by the fire.
quenters of such places might prove prof
liable to a certain class of advertisers,
columns, as II would not reach the pub
lie in general-the buying classes. So a
telephone exchange might secure several
hundred or a thousand or two subscribe
ers, and yet the combinations afforded
have no practical value to the constant
user of telephone service or the general
public, and the secured subscribers be
rarely called for. But the progressive
merchant must pay his tribute to each
company just the same. Thus ii is not
only the greatest number OF people you
can reach with the aid of the telephone,
but the greatest number of the very peo-
pie you desire to reach that renders tele-
phone service invaluable.
A second problem, and one not so diff
cult of solution as hat of securing the
necessary desirable subscribers, Is to Sc
cure the capital necessary to construct
a modern telephone plant. Such a plant
e eaan Sro oe s PFopes slSbs conslrp sa s175 for : less LESS
scriber, depending on the size of the ex-
change; the larger the plant the higher
the average cost per subscriber. A first
class telephone plant having a switch
board capacity of 1000 subscribers can
be completed for s125,GOo, while 1t would
probably require an investment of $780, 600
to complete every detail in a modern
plant of 5000 subscribers. Many opposi-
ton telephone exchanges have been built
for a less sum per subscriber, notably
Topeka, Kan; Fort Smith, Ark; Selma,
Ala; Waukesha, Wis, and some twenty
others. But these exchanges no longer
exist. having gone the way of all purely
return for the heavy Investment. Now
the shrewd dnancier is not putting his
money into Investments that promise as
fat plucktngs for promoter and lawyer
as competing telephone exchanges do.
He may loan the use of his name in re-
turn for a profitable consideration. But
the plant will be built (well or poorly
from the investments made by lambs
honest and unsuspecting creatures who
are so inexperienced as to believe tina
because a certain prominent citizen holds
quite a block of stock in a new enterprise
he must have invested a large amount
therein. And as the lamb" seldom has
the reserve capital necessary to protect
an investment of this character, he soon
has a practical illustration of how easily
his venture maj be swallowed up and lost
for ever.
But the most difficult problem that
confronts the new company In a large
city is to SO plan the constructive and
engineering features of a plant as to in
sure from the start a satisfactory high
class service TO subscribers already edu-
Gated TO a high standard of telephone SER
vice. 1t means something more than
placing a switchboard in a room and con-
Meeting thereto the wires radiating out
TO the subscribers telephones. For the
building of the modern telephone plant
in a large city includes the planning or
the construction of outlying exchanges
connected to each other and also to the
main exchange by underground trunk
lines; and in the proper arrangement and
disposition of these runk lines. and the
rapid handling of the ever-increasing
traffic in conversations. abides an engi-
neering problem, requiring capacity, abil-
dty, and experience of the highest order
to satisfactorily solve and thereby evolve
a successful modern telephone plant.
JOHN WALTON BOURKE.