Omaha daily bee., 1902-12-04
OF TELEPHONE PLANT
Board Of Review Gets Some Evidence, but
Not All It Wants
CALLS FOR A STATEMENT OF EXPENSES
Chairman of Board Seeks TO Figure
Out Value of Omaha Property
On Basis different from
Lawyer M~orsmnn's

The hearing on the complaint Of the Tel
ephone company before the Board Of Review
developed the fact that the company's rev.
enue from telephone rentals in Omaha ag-
grcgate $3.50, 900 a year; that the operating
expenses foot UP approximately S125, 600 a
year, leaving the remainder to apply to
general administration, interest on invest
ment and earnings on franchise value.
e. NJ. Morsman, as secretary Of the Ne
braska Telephone company, and W. w.
Morsman. as attorney, appeared before the
Board Of Review by appointment yester-
day in support OF the company's application
for a reduction Of it's assessment as fixed
by the tax commissioner. The argument
was entirely upon the valuation Of the per-
sonal property Of the corporation, there
being no wide difference Of opinion as to
the valuation Of $685. 900 placed upon the
real estate owned in Omaha.
The argument was made by w. w.
Morsman, who referred to the fact that
the company had made a return to the
tax commissioner showing in round num-
hers 1878. 900 Of personal and SIS, 900 OF real
property in Omaha. This return, he said,
had been prepared by the officers, acting
conscientiously with n full knowledge OF
the cost and condition of the whole prop
erty of the company and its earning ca
pacity, based upon twenty years Of expert
ence and with the earnest purpose and
endeavor to place in the hands OF the tax
commissioner a fair statement of the true
value of the property at this time. Then
Mr.. Fleming had. arbitrarily, as the
speaker understood, and without any
knowledge Of the facts and conditions or
facilities for accurate information, added
1920. 900 to the figures as returned by the
company. Mr.. Morsman said he had no
doubt that Mr.. Fleming had acted con-
| scientiously In this matter, but as an off,
cial act to establish a basis of taxation he
considered the increase unjust.
Taking value of stock.
Discussing the method employed by the
officers of the company in placing their val
uation upon the property the attorney sub
mitted that It was a recognized principle
in such computations that when a company
had no bonded Indebtedness the value of the
stock was the necessary test OF the value OF
its property. This company, he said, had
at the time of making the return about
81. SOC, 900 Of stock which could not fairly
be valued above par, as this company's STOCK
never had sold higher than that. The sum
Of 81, 800. 900 was therefore taken as the In
flexible basis of the value OF all the COM
pany's property, including franchises, AMI
from that was then subtracted the value OF
all property outside of this city, including
that at Lincoln, Council Bluffs, Hastings
and South Omaha and the Black Hills.
The officers had also computed the value
II it's property, using the earnings and cost
as the basis. and had arrived at practically
the same result. He had, he declared, re-
peatedly said that the company wanted its
aN g4e Nrtta UalNn ~ all
other property in the city was to be as
sessed in the same manner, but he consid-
cred the addition OF $12O, 900 by Mr.. Flem-
ing to be a great injustice"
After being sworn, E. M. Morsman, in re-
ply to questions from Mr.. Victor Rosewater,
chairman OF the Board Of Review, said the
company had for years paid 8 per cent divi-
deuds on its stock, but he could not say as
TO what surplus that had left. There were
numerous other questions that he could not
answer at that time, but in the course OF
the examination he stated that on Septem-
Der 80 the company had Ats subscribers
and the yearly average was 4,2S6. The
average gross rentals for the Omaha ONCE
per month he gave as $19, OS0, which did not
include the tolls, amounting to about $4,000
per month, or the long distance tolls. which
he did not believe would run over 81 per
days Tho operating expenses, he said,
averaged 50 per instrument per month.
Local Operating Expenses.
When asked to state the monthly ex-
penses of the Omaha ONCE. Mr.. Morsman
said he had no figures with him from which
he could give that information. The board
then requested him to furnish it a state
ment OF the monthly expenses, showing
the salaries paid to executive officers and
their expenses, attorneys fees, cost of
supplies and the proportionate amount of
all general expenses chsrgable to the
Omaha office. Mr.. Rosewater said that
the company had deducted the value OF all
Of its other property. leaving Omaha as the
residuary legatee, so to speak. but the
board wanted to go the other way around
first, leaving the residuum to the property
outside OF the city.
In the course of the examination Mr..
Morsman declared he could replace the
entire Omaha equipment Of the company
with the latest improved material for
$3.50, 900 and 1t would then be worth 80
per cent more than the present plant
which he valued at 5000, 900.
In reply to a question from Mr.. Fleming
he said he considered the franchise in the
city OF Omaha, taken alone, as being worth
not more than $75, 200 and that he did moi
consider the franchise in this city to bC
worth any more in proportion to the in,
vestment than those in Lincoln, Council
/ Bluffs or South Omaha. Mr.. MorsmaI
said his company had paid dividends o
6 per cent upon it's stock for a period o.
| about eight years, but most Of that tim,
that interest was not considered to con.
/ stitute an attractive investment of money
The stock had seldom sold in this city. bu
principally in New England and the east.
Before adjourning. the chairman Of tn,
board said while decision was reserved, tn
. telephone company would be required be
: fore action on its complaint to furnish
$ the missing data that had been asked for
: but Mr.. Morsman intimated that he wa
I uncertain whether he would comply will
r this requirement.
|. 7 nnMnAMN ACCECOMEH5