The Washington times., 1902-03-12
Hearing Continued Before
Supreme Court.
THE COMPANY'S CONTENTION
Attorney Worthington Illustrates Work
ings of Telephone Exchange With
Practical Switchboard - Holds Rates
Fixed by Congress Would Mean Loss.

Argument In the telephone case, which
was commenced Monday afternoon before
the Supreme Court of the United States,
occupied the attention of that body all
day yesterday. Mr.. A S. Worthington,
attorney for the Chesapeake and Potomac
Telephone Company, who opened on Mon
day. continued for the defendant.
There was exhibited in the court room
a switchboard such is used in branch
telephone exchanges in order to illustrate
the practical operations of the telephone.
He contended that a telephone exchange
supplying reasonably efficient service to
all parts of the District could not be
maintained and operated without loss
at the rate fixed by the act of June 80,
1898. Mr.. WorthiDgton contended that
the business of the telephone company
had been economically conducted. and
that its books os accounts had been
properly kept. He said that these books
of accounts and the original vouchers had
been thoroughly examined by the most
competent expert accountants in the
United States, and this examination
showed that the necessary expense, per
subscriber, of maintaining and operating
4 telephone exchange in this city is Ear
create. than the maximum rate fixed by
Congress.
The Company's Position.
Mr.. Worthington held also that the
showing of average receipts and expendi-
lures made by the Telephone Subscribers
hi
not well based upon the facts in the case.
He denied the contention that expendi-
lures properly chargeable to construction
have been charged to maintenance. He
analyzed the statements made by the ex-
pert, Haskins. in order to maintain this
contention. He said that the ordinary ex-
pensss included in the Haskins statement
must have added to them an allowance
for depreciation and for extraordinary ex-
penses caused by storms. fires, damage
suits, and other contingencies. In addi-
tion to the expenses. he said the tele-
phone company is entitled to reasonable
compensation, and this involved an en-
quiry into the value of the plant in this
city
He went quite fully into the cost of
telephone construction and various ap-
purtenances in relation to it. He ana
lyzed at length the opinion of the Court
of Appeals on the question of the reason
ableness OF the rates fixed by the act of
June 30, 1888. He dwelt upon the dispro-
portionate increase in the COST of the
central office equipment as the subscrib-
ers increase in number, maintaining that
the Increase in the number of subscribers
increased the cost of conducting the serv-
ice in a greater proportion than the in
crease of compensation by having numer-
Gus subscribers.
No Provision for Future
He said that legislation by Congress in
relation to the rates provides no means
for changing these rates at any time in
the future, however unreasonable and un-
just they may become. In this legisla-
tion differs from corresponding legislation
everywhere else, because in the acts of
the State Legislatures. which have come
before the Supreme Court involving this
question it will be found that there is
always provided a commission of some
kind, with authority to fix rates, and from
time to time alter them. But this law
makes no provision for the disproportion-
ate increase Of expenses and the conse-
Quent necessary increase Of rates which
would follow any considerable increase in
the number of subscribers under the con-
ditions which 1t imposes. He concluded
by contending that Congress had erred
and defeated its own purpose by fixing a
scale of charges that. IL enforced would
result in the ruin of the telephone COM
pany, and for these reasons submitted
that the holding OF the Court OF Appeals
should be reversed and the case remanded
with instructions to dismiss the bill
Mr.. Worthington will be followed by at
torneys for Manning and others favoring
the upholding of the decision of the Court
Of Appeals.