The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1897-10-02
SAYS ITS PRESIDENT
Is A.KNOW- N0THING
A TELEPHONE LINE MAKING Is
PER CENT ONE OF THE WON
DERS OF THE WORLD.
THE BELL COMPANY IS
FIGHTING FOR ITS LIFE
Conclusion Of the Largest and Most thorough
investigation That Has Ever Been Held
Before the North Carolina Rail

Investigation hat HAS Ever been Held
Before the North Carolina Rail
road Commission.
On June LIST the North Carolina Rail-
road Commission, after hearing evidence
and argument from the telephone COM
panies of the State, and others, issued
the following order:
The Southern Bell Telephone and
Telegraph Company will be allowed
a maximum charge for telephone ser
vice as follows:
| Place of business special wire $34.00
per year; 2, party wire each, $1,000 per
year; 3, party wire, each, $3.50 per
year; 4 party wire, each, 5000 per year;
party wire, each, $17.00 per year.
Residence, special wire, $2400 per
year; 2, party wire, each, S22.40 per
year; party wire, each, $4,000 per year;
4 party wire, each, $16.S0 per year; 5
party wire, each, S14.40.
Since then July 31sD a rehearing has
been granted. This rehearing has been
in progress for the past two days and
was completed last evening at 6 o'clock.
Though the Railroad Commission has
the matter under advisement and has
not yet rendered its decision, | venture
the prediction that, with the evidence
before it, the above order will remain in
force.
If it does, Senator Daniel tells me his
company will take an appeal.
The telephone rate investigation be-
fore the Railroad Commission was re-
sumed yesterday morning at 10 o'clock.
The morning was consumed in the in
PRODUCTION of additional evidence, two
witnesses-Gen. Meaney and Engineer
pickernell-being introduced by Senator
Daniel.
The testimony of Gen. Meaney took
much wider scope than on the day pre-
vious and the evident purpose of the
first part of it was TO bring out such
facts as would, if an appeal is taken,
get the matter into the Federal court.
For instance he testified that the
Southern Bell Telephone Company is a
New York corporation and has no charter
in North Carolina Also he said that
the recently-fxed rates. seriously in
terfere with existing contracts between
the Bell Telephone Company and its
subscribers in North Carolina, and pre-
vents the execution of those contracts.
These rates, he did not think, when all
things were considered, were such as to
allow the company fair and reasonable
return on the capital invested-On the
contrary, he said operating under the
new rates, the telephone company would
be doing business at a loss. He said
his company had met with competition
in four of its eight exchanges in the
State, and the competing company Of
fered service at a rate much lower than
those charged by the Bell Company
even if Mr.. Cars company--the In
ter-State-had, since March 3fst, earned
Is per cent, that would not be fair basis
ON which to fix rates. Experience proves
that three months or even three years
is too short a period on which to fix tele-
phone rates. There are good years and
bad years-storms and accidents--in the
life Of a telephone company. The last
three months, during which Mr.. Carr
says he has made Is per cent, have been
the best telephone months Of the year.
From now till March 31st again, storms
may be expected and many repairs will
have to be made. Besides. Mr.. Carr's
company pays only one of its officers a
salary"
Gen. Meaney said he couldn't see how
the Interstate Company was to be bene-
fitted by having the Bell Company's
rate reduced If their rates are lower
than ours, then they ought to be masters
of the situation.
| Maj. Wilson: care not all your ex-
changes operated at about the same cost,
per subscriberT
Ihey are, in case no extraordinary
storm comes to one that does not come
to another.
| did you not say yesterday that in be-
ginning business you made mistakes that
cost you about $4,000? Do You thinl
that fair amount to now bring for
ward as a legitimate charge upon the
capital stock upon which you expect to
make a reasonable proft?'
II think we would be entitled to do
that, or we would have to re-organize
our business de novo. That time has
come in great many places"
Commissioner Ohio Wilson, "You said
yesterday your franchise in North Caro-
lima cost you 1000. To whom did you
pay that money and for whatW
"Of that amount $4,000 was paid
| to the American Bell Telephone Com
pany for a right to do business in the
State. This also gave us a right to all
its patents then and to any it might ever
| have"
"Then You were buying thoughts that
were yet unborn and property that did
not existT'
eve were"
"Where did the other $4,000 goY
"To expenses incident to opening up a
new business and such as cannot be prop
erlv charged to construction"
'Do you call these things franchise ~
"Well, perhaps not. 1t might more
properly be called the purchase of a
patent right. We paid for these patents
by issuing stock to the American Bell
Telephone Company"
Suppose a telephone company erects
plant for $4,000. Later another
company, on account Of new inventions
or expirations Of old patents, is enabled