Ottumwa semi-weekly courier. [volume] (Ottumwa, Iowa) 1899-1903, 1903-01-01
A Peculiar Condition Not Known
Until Recently.
THE FLAT RATE is IMPRACTICABLE
The Substitution of the Sliding Scale
for Hello Service Would Place the
Balance on the Right Side of the
Ledger.

paratively recently been discovered
and was not known when the fiat rate
for phone service was made, accord
ing to Dr. H. S. Herr, president of
the Ottumwa Telephone company. AS
result companies are losing money
when as a matter Of fact the substitu
ton of a sliding scale would place
the balance on the right side of the
ledger.
This in brief is the story DR.. Herr
told the members Of the Interstate
Telephone association at it's last an
nual meeting held at the Auditorium
hotel in Chicago December Gil. Nine
states were represented by over 600
delegates. DR.. Hers paper was on
THE Sliding Scale of Rates for the
Telephone Company" and bears the
distinction of having been chosen with
one other for publication in the official
organ of the association, the Western
Electrician. DR.. Hers paper, which
has ideas of interest for Ottumwa peo-
pie as printed in the Western Electro
clan follows:
Cause for Poor Telephone Service.
The flat-rate system incorporated in
to many of the franchises granted to
different independent companies by
city and town councils, has been the
direct cause of more poor service,
poor construction and poor mainten-
ance than any other cause that can
think of at the present time. None
OF the Independent companies was
aware when it began business that to
maintain telephone system would
cost more per telephone to care for
800 than for a lesser number There
| fore, the companies soon found them
selves paying out more money for
maintenance and operating than they
were receiving. A very popular price
among promoters and catchy price
for the public, is rate Of 81 and So
per telephone, this being considered
an adequate amount in telephone
systems under most favorable condi-
tons for from 800 to 500 subscribers.
That is not sufficient amount to com
duct the business and maintain the
| plant when the number is more
A large number of telephone ex-
changes that in the beginning. when
their subscribers We're few in number
gave excellent service, are now giving
very poor service, because expenditures
consume all the receipts, and there
| is nothing left for repairs or mainten-
ance. And unless financial relief comes
by means of advance receipts, very
short time will put them out of bust
ness.
/ Cost Increases as Members Increase.
The eagerness of the Independent
L tnlnnhnnn n rio 40
I done the public in charging exorbitant
rates by the company holding the origi-
1 inal patent upon the telephone, was the
prime cause in promoting independent
Tor opposition telephone companies.
! The new companies, like the hardware
or grocery men, counted that the more
service they could sell the greater
would be their profit, prices always
! bNng the same. One hundred barrels
of sugar or 100 barrels of nails can be
sold by the merchant for less money
4 per barrel than one, two or three bar.
refs and still the merchant would make
greater profit on his investment by
selling the large number at the same
price, than by selling the small mum
Der at the same price. And
thus the pioneers of indie
pendent telephony, when they turned
their attention to the telephone bust.
ness, thought if they could sell the
service of thousand telephones they
, could make the rate the same or even
less than if they sold the service OF
only one-quarter or half that number
The comparison between sugar
, nails and telephone business is not 8
fair one. When a barrel of sugar is
sold that is the end of it; when tele
phone service is sold it is only the be
ginning. Forever after there are wires
to be taken care of, trouble to chase
lightning and electric currents tha
burn up the instruments, to be switch
ed off and many other things must BIZ
done, and the more telephones yol
: have the longer distances are neces
sary to reach the subscribers. Whel
; nails and sugar are sold, the merchan
receives all his cost and profits; whel
!. a telephone is placed, only a small
portion of the cost is paid in the sci
vice and years are required to balanc
! accounts. But to give telephone sci
: vice to one thousand subscribers
central apparatus must be provided a
cost of no less than one hundre
: times as much as the central appars
> tus will cost to give service to on
/ hundred subscribers. Ten exchange
Of one hundred subscribers at 81 an
: So a month will bring a handsome re
turn to the owners, where one wit
one thousand subscribers at cost c
S 81 and So per month will be positiv
r loss without any provision for mai1
4 tenance Still, in each case, thol
e sand subscribers are served. But thi
n us sufficient to show cause for thi
e paper.
e Sliding Scale of Rates.
/ By the sliding scale of rates for tie
n ephone companies is meant scale {
d rates based upon the number of COZ
!: nections given subscribers in any on
d system The Importance of such
n rate is well understood by the olde
companies, as shown by the slidin
scale of rates as used by the America
Bell Telephone company at the adver
= of independent telephone companie
, | TIL, <f "a FOL 10