The San Francisco call., 1905-06-30
CONSIDER PLEA
FOR FRANCHISE
Supervisors Hear Arguments
of NJ. A. King Against Au-
tomato Telephone System
EQUIPMENT TOO COSTLY
Braunhart Says City Might
Duplicate Plant of Home
Company in Los Angeles
EQUIPMENT TOO COSTLY

OOIllpttIIy Ill LUIS AlSClcS
The Supervisors joint committee on
Public Utilities and Finance yesterday re-
sumed consideration Of the application of
the Home Telephone Company for
grant of franchise to establish an inde-
pendent automatic telephone system in
this city.
M. A. King, whose application for an
independent telephone franchise was
turned down by the Board Of Supervisors
some four years ago, read long type
written statement, in which he argued
that benefits would result by having two
telephone systems, but advised against
the automatic kind.
King urged the committee to act ia
vorably on the application that a tele-
phone franchise be sold. but to substitute
form or ordinance providing for the
grant which he submitted. The state
ment says in part:
For years the efforts to enthuse the public
on automatic telephones have proved unavail-
ing; Not a large city to-day is using it.
with the single exception OF Chicago. In
most cases after five years Of use automatic
manual 1t Is costly to INSTALL expensive TO
maintain. too delicate in its mechanism for
constant reliable service and too intricate for
the understanding of the average telephone
user Columbus. Ohio. is the largest city
manager Of the automatic company OF Chicago
is director and stockhoder Of the Columbus
plant.
SAYS STOCK is WATEKED.
The Home Telephone Company of Los An
geles is at present dominated and controlled
by group of fnanciers and bankers whose
sole purpose is to make the watered stock of
that organization pay dividends regardless of
its earning capacity or of its service. They
ais also control the ong-distanee company and and
Opportunities of the immensely profitable long
distance company they find 1t necessary to
have San Francisco and Portland. franchise
in San Francisco would also give them an
other opportunity of unloading the con-
fding public several millions of watered stock.
The watered stock of the Los Angeles COM
pany has been boosted on the market by the
prompt payment of dividends until the public
Is eager to pay and are paying S64 per share.
The rates established by the Home Company
al the start below the cost of 10000
telephone service. Three-year contracts were
taken. They now claim 1000 phones In ser
vice. The three-year contracts have expired
The rates have not been Increased, though
the cost Of the service to-day must be twice
what they are charging. Still they pay divi-
dends promptly; I am told that some of their
issue of s2.50C. 000 stock is still unsold-
The bonds of the Home Telephone Company
were frst offered to the banks of Los Angeles
At 80. with a bonus of equal amount of
was oversubscribed. This explains the pre-
ponderance of testimonials read by Mr. Kahn.
attorney for the company being from bankers.
1. certainly was good thing. Two lengthy
testimonials are from Bank President Patter
of the Home Telephone Company.
King said that Chairman Braunhart
had received large number of letters
to the effect that the independent tele-
phone companies had proved failures.
both financially and in service, but had
received his information from the Sun
set Company.
WRITES TO MAYOR.
"That is net so.'' said Braunhart
!, raI fr,fn ion
from that source. have also written to
the Mayors of many Eastern cities rela-
tive to Independent telephone companies
and have received some replies.
Braunhart said he had prepared list
of questions which he desired answered.
He began by asking King If he was ac-
ouainted with the installation of the |
Home Telephone system in Los Angeles, |
and King replied in the affirmative. King |
said he had been granted a telephone |
franchise in Los Angeles himself, for |
which he had paid $30S0 under the |
Broughton act. King said he had re-
ceived 5000 for his labors in getting the |
franchise for dormant company, which |
he afterward transferred to the Home |
Telephone Company.
Braunhart said that 1t was desired to |
ascertain how cheaply duplicate system |
of the one in Los Angeles could be in |
stalled here, with q view to ultimately |
having the municipality build such a sys- |
tenn. King said the bonds Of the Los An |
geles system paid per cent interest, |
which caused Braunhart to remark that |
the city could borrow money at 315 per
cent.
King said he did not know of any one
receiving bonus for promoting the Los
Angeles scheme, and admitted that he
knew nothing about telephone construc-
ton, being simply promoter himself
King said the ordinance submitted by
the Home Telephone Company granting |
the automatic franchise was insufficient,
as it is simply rehash of the State
law.
f. W. Wachter, superintendent Of the |
Home Telephone Company, declared that
King knew nothing about the financial |
affairs CT the company in Los Angeles, |
and was not competent to talk thereon.
Braunhart said there were numerous ap-
plications for telephone franchises, includ-
Ing one from the Stromberg Company.
The committee deferred further consider
alton of the matter until Thursday,
JulV 90