The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-02-11
NOTELEPHONE RATE WAR
CENTRAL UNION COMPANY WILL NOT
INACCURATE ONE.
Claims Made by Manager Vail as to
Cost of Operating Exchanges
Outside Stations.

There has been some curiosity expressed
in the last two or three weeks as to wheth-
er there would be telephone rate war in
Indianapolis, such as have been reported
from other cities in The State where COM
panies were started in opposition to the
Central Union Comapny. The reason for
this inquiry is found in the fact that when
the New Telephone Company was recently
organized the announcement was made that
rates much lower than the maximum rates
| of the Central Union Company would be
offered. This was followed by the an
nouncement that the Citizens Cooperative
Company granted a franchise eleven years
ago, also intended to enter the field.
William A. Vail. state superintendent of
the Central Union Company, was last night
asked If there was to be a rate war. He
was inclined to believe that there would
be none, saying that his company is al
ready furnishing telephone service at the
| lowest living rates. He predicted that the
New Company would find that it had I'M
dertaken too much.
1--WE have found it suicidal to cut rates
in other places" said he. I'm Lafayette we
could not make anything at the rate we
met, and the other company certainly was
not making anything. The great trouble is
that Tie Iueu WIN ~ 1illO the lClCpl1OAlS
business do not know anything about i, and
are deceived as to what it costs to estab-
lish and operate plants. Would you be sur
prised if 1 were to tell you that we have
had competing companies voluntarily offer
us options on their plants at from % to IS
per cent. below what they paid for their
installation? 1t is a fact. The men who
go into the companies are deceived. Some
times they honestly believe that the plants
can be constructed at the figures promised
by the promoters, but they find before the
work is finished that they have been de-
ceived.'
Mr.. Vail mentioned one city where COM
pany was started in opposition to the Cen
trail Those who were induced to invest
were informed, he claims, that the ex-
change could be put in operation ready for
service for IS 600 The work was hardly COM
menced before they found three times that
amount would not pay the expense, he says.
They now have $4,000 invested in cash
with a debt of 49, 0C0 over Them, he went
on. "They owe everybody, have not yet
paid their December salaries. We have
nothing unkind TO say of the indianapolis
men who have undertaken this venture.
They are all business men of standing, but
We know that they are mistaken in thinking
they can operate at the rates they offer
We know the telephone business thorough
ly. Indianapolis is now getting the best
telephone service to be had, at rates lower
size in the United States or any other coun-
try where the cost of labor and operating
expenses are of the same proportions In
London, England, the rate is 800 a year
for the same service we give Indianapolis
for $72 in Paris, France, $50, and there the
underground work is done free OF cost to
the company Mr.. Vail mentioned other
European cities where night service is not
given where subscribers can only use their
telephones from a. m. to 10 p. M, and
where they have to purchase the 1nstru-
ments and pay for their installation out
right. He spoke of the party line service
here as being as economical as any one
could wish to secure a satisfactory serV-
ice Mr.. Vail frankly says that the tele-
phone business is a natural monopoly, tnaI
it does not pay to have two companies, as
the cost of service is not reduced.
IF man is on our line and wants to
reach our subscribers he must keep our
telephone in his office, must he not? Sup
posing he has q telephone from another
company in his house; then he must have
a telephone of that second company in his
office to reach his own residence, thus pay
ing for three, $72 for our telephone $40 for
his other office phone and $24 for his resi-
dence-$l36 year. We would give him the
same service for 1884, Does he save any
thing? There is another thing. The tele-
phone subscriber here can get into COM
munication with 100000 telephones in all
parts of the country. He has the same
privileges as the New York subscriber. He
can reach 500 towns in this State. Can the
other companies say as much? 1t will take
them some time to offer such service. We
find that about 60 per cent. OF our SubScr1b-
ers use the toll lines, not frequently, but
occasionally. Our exchanges in the smaller
towns do not pay us, but they are neces-
sary for the completeness of the system and
the convenience of our subscribers. BY hav
ing different classes of service we manage
to make our operations balance. We may
not make anything on the party lines, but
what we gain on the highest priced service
evens things up, and we place our business
patrons in communication with large num-
Der of subscribers.
While Mr.. Vail did not say in so many
words that the Central Union Company will
TO. - 70 lnaT I or1xr
other inference could be drawn from what
he did say.