The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-03-08
A BAR TO COMPETITION
WORKS BOARD MAY THROTTLE THE
CHEAP TELEPHONE PROSPECTS.
Decides 10 Accent Bids on a Franchise
The Central Union Com
pany's Opportunity.

Telephone men who have been asking the
administration for franchise, proposing TO
furnish the telephones at greatly reduced
rates, say that the action of the Board of
Public Works yesterday offers an excellent
opportunity for the Central Union Company
to sti1e competition at the outset.
Yesterday the board wrote letters to the at
torneys for the New Telephone Company and
the Citizens Cooperative Company, saying
that it had decided to advertise for bids for
the franchise, or words to that effect. The
letters stated that the board would adopt
specifications and formulate contracts, spec
flying the terms on which one OF the COM
panies that are asking an opportunity to
compete for the telephone business would
be allowed to operate in Indianapolis. May
or Taggart explained that in a general way
the specifications the board would ADOPT
would stipulate the territory within which
wires must be placed in underground con-
Quits; that connections must be made with
independent companies throughout the State
SO that they would be placed in communica-
ton with Indianapolis; that the successful
company would be required to pay GER
tain sum annually into the treasury, say
5000 year, and requiring that good, ade-
cations will also specify the maximum
rates that may be charged.
The telephone men who have given the
telephone situation a good deal of atten-
ton say that this simply means the Central
Union Company could set up straw bidders,
furnish a bond promising to forfeit $4,000
or $4,000 TO the city if new plant were not
in operation in a little while, and by bid
JiYo~ hisrb oh, flo
pay annually after the plant was in opera
ton, and secure the contract the board pro-
poses to give. Failing to put in a plant at
the end of the stipulated time, the straw
company would simply forfeit the bond to
the city, the Central Union Company would
be out $4,000 or $3.50 only, and would have
a clear field for an indefinite time to come,
without having to lose $4,000 to $4,000 a
year in rates cut to meet competition. 1t
is claimed that contract strong enough
to prevent the manipulation Of such a
scheme cannot be devised by the city.
THE LETTERS SENT OUT.
The letters of the Board of Works were
mailed to Lewis c. Walker, attorney for
the New Telephone Company, and Leon Q.
Bailey, attorney for the Citizens Co-opera-
tive Telephone Company. Copies of both
were sent to Pickens, Cox 81 Kahn, attor-
neys who appeared before the board few
days ago, saying that the board ought to
let a contract by open competition, and
stating that they represented men who
would enter into the telephone business II
this plan was adopted The identity of the
lawyers clients was, not revealed, but 1t
was said their names would be made known
at the proper time. At the public hearing
of telephone men lastsThursday l.. G. Walk
er said that the Central Union Telephone
Company assumed strange guises in its et-
forts to stave off competition, and warned
the board against anonymous concerns that
proposed to reveal their identity at some
time in the future. Mr.. Pickens has assert
ed that his firm does not in any way repre-
sent Central Union Interests. The letters,
of which he was furnished copies yesterday,
addressed to Messrs. Walker and Bailey,
read as follows: ~
after duly considering the proposition Of
the telephone company represented by you,
we have decided that the best interests of
the city of Indianapolis will be guarded by
the preparation of specifications and con-
tract, defining upon what terms and condl-
tioIis telephone franchise will be onered
in open competition, such franchise to ad-
nit of connections with outside independent
companies, and at the same time secure to
the city of indianapolis efficient service and
cheaper telephone rates.
1.-THE board will at once proceed to pre-
pare such specifications, and as soon as
completed, the same will be published IN
the daily papers, and copies furnished to
those desiring them" r
When the telephone men learned that
specifications We're to be adopted they
feared that the bidding. companies would
be required to use certain kinds of instru-
ments, switchboards and other telephone
equipments, perhaps those. controlled by
Bell interests, but it seems they were mis-
%olr Nov Tia
would not undertake to designate what
particular kind OF equipment should be
used. but would simply I, INSIST Isl tnat g 1000
specifications will not be drawn, he said,
so as to bar any company from bidding.
WHAT THE MAYOR SAYS.
'"The more I thought over this question:
said the mayor, ''the more / felt the only
thing for the board to do was to itself stip-
ulate the terms on which a new franchise
would be granted. There are at least two
and perhaps three companies asking to
come in. If contract were given to one
the others would have right to expect
the same treatment. Last week, when the
telephone men of the State were here ask
ing that the wall be broken down and they
be allowed to communicate with the city
it struck me there was a good deal of JUS
tice in what they said. The board will re-
qulre the company getting the contract to
that the company offering lower rates
should not be required to pay anything
into the city treasury. OF course the 5000
or 5000 subscribers would be benefited but
how about the $4,000 or 40 900 people who do
not use telephones? What benefit would
they get? When company uses the streets
it should pay something into the treasury
so that all the taxpayers might get some
benefit. The opinionsis growing that fran
chises giving the use and occupancy of the
streets are valuable rights and should be
paid for. We felt that we could not let all
these companies. come in without paying
something. The minimum amount the city
will accept-say, 5000 d year-will be Stipu-
lated in the specifications Then the COM
pany that is wiling to give the highest
amount above that will be given the con-
tract. Besides specifying the districts where
the wires must be underground, where poles
may be erected and wires strung above the
streets, the specifications will stipulate the
maximum rates that may be charged for
telephone service, so much for residences
and so much for places of business
LITTLE SAID AS TO RATES.
''Will that be lower than any figure that
has been suggested by the companies ask
ing franchises Pre-
81 doubt not. OF course, am only speak
ing of this in general way. The details
will be decided on, as, for instance, the
lowest annual amount the city will accept
a year for the franchise, at the confer
ence to be held later"
By the plan that is proposed there could
be but one telephone company besides the
one now in the field, and citizens OF In
dianapolis would not be bothered with hav-