New-York tribune., 1906-05-12
TWO CENTS TO PHONE.
NEW COMPANY'S OFFER.
"HeIIo" Battle Begins and Promises
To Be Hard Fought.

Apportionment- 1t looks like the beginning OF a
hard and long campaign.
Martin W. Littleton presented the argument OF
the Atlantic Telephone Company. while the inter-
esis OF tho New York Telephone Company were
represented by ex-Controller Grout and John @.
M'lburn.
Tt was learned last night that the financial back
srs Of the Atlantic Telephone Company J. B.
Russell & Co. brokers' and principal owners OF the
Chicago freight subway system and George w.
FairchiId OF the Guardian Trust Company. In
Wall Street It is said that J B. Russell & Co. and
MI Fairchild have made arrangements 20 continue
she campaign indefinitely.
Mr. IAttleton said yesterday that II the Board of
Estimate and Apportionment would give his COM
pany for twenty-five years what the city has given
fhe New York Telephone Company for the last
twenty-five years in the way OF a monopoly of the
ducts Of the Empire City Subway Company, and
about $4,000 year Che equivalent of the cty's
telephone bilD. his company would give the city
the use of loo telephones without cost and would
guarantee rate of only two cents a message.
This offer. made informally greatly interested
Controller Metz. who told his colleagues that II the
company would bind itself TO furnish telephones at
SO q year he would that the company get its
franchise for nothing with unrestricted Of the
ducts now monopolized by the New York Telephone
Company
The Council Chamber packed with spectators
when the hearing began with Patrick r MCGOWAN,
President Of the Board Of Aldermen in the chair.
Mayor Mcclellan heard part Of the arguments.
Mr. Cromwell. of Richmond. the only absentee.
The Mayor. the Controller, President Coler of
Brooklyn and Mr. MCGOWAN presented for the
minutes several hundred letters and kilograms COM
rending and opposing the application OF the At
iantic Telephone Company.
The Atlantic Telephone Company has amended its
proposition since il first submitted it, IN December
last. and amended it is in brief, follows:
Pay in advance. 100000 evidence of good
faith Pay an increasing percentage Of gross re-
oflps loI ] Its 9nboros ss i 81 snail ali red,;,re "
charge five cents a message for messages wholly
within one borough ana nor 10 exceed 10 cents 20
,Iss -. fFr,,To 26 "a "a er cent lower Than
the old company rates in eject the nrst OF this
Surrender the franchise and plant to the city at
the end twenty-five years the city to thereafter
It absolutely.
Opening for the opposition. Mr.. Grout said the
question whether il was 10 the interest or the
people TO have duplication or Uiplicauon OF the
service He said the interest Of the city was CO.
incident with the interest Of the company now in
the field If competition goo6 thing he said,
more competition better thing. There were
NOW, he said. the applications OF two other COM
panies besides the Atlantic Telephone Company,
three other companies contesting the right to fran
chises and six new companies seeking 10 get into
the city.
He declared that the conditions were similar to
those which existed when the several gas COM
panies in Brooklyn and New York We're seeking
franchises several years ago, only eventually to be
gathered together in one big monopoly. He re-
ferred TO the street railway traffic merger as an
other economic certainty. While competition be-
tween railways was natural the telephone service
he said not.
The telephone is good TO you" he said, 'un-
less you reach all the other people who have
Telephones With more than one telephone
pany you division that lessons the utility Of
elephone those who use it. Eventually there
must be consolidation and IL you have useless
competition you have useless duplication OF cap
Iial"
Even If the new telephone rates are cheaper than
the Old he said. the cost TO the public would be
greater, for it would have to have two telephone
services. The whole economic thought on the SUBJ
ject he contended, was that the telephone
natural monopoly and could be controlled only by
public regulation public control
Mr. Grout said that careful research had failed
10 disclose one writer on economic problems who is
IN favor OF a dual telephone system He referred
the fact that in all large European cities and
countries there is unified system Of telephone
service
Concluding. he said that the admission of a new
company would involve the tearing up Of the
again. as all the wires must by law be under
ground Surely he said. New York did not want
its streets torn up again.
John G. Milburn. general counsel for the New
York Telephone Company who followed said there
was no logical or practical reason for the admis-
sion OF a telephone company in New York.
Unless the existing system is bad said Mr..
Milburn. ''snd unless its service is bad and
eXorbitant price is charged for that bad service.
snd unless there is cure for the evils but the
admission OF another company, the present utility
should not be MANNED and mutilated."
He said that these propositions could not be up
held. The telephone system in New York, he said
was the best and most efficient IN the world. and
had been described by competent authorities who
had investigated systems throughout the world He
declared that the present company had adoDted
every Improvement 10 increase the efficiency OF the
service. and had during its existence less than
three times torn up its entire plant and thrown il
mo the scrap neaR 10 10 replace II by newer and
improvements in the future. he was sure and the
Aew York Telephone Company would be the first
Mr IAttleton for the new company. denied any
posslpllty OF coInDlna1lon between the companies,
ana then argued against Mr. GrOut's complaint that
the admission Of the Atlantic Telephone Company
"oqa mean IlpIIhg u2 me streets OF New York
Let the New YORK Telephone Company open the
anyways they have taken from the city, he said,
and we viii install our system without tearing up
street They stand here, In the Empire City
subway matter, accused of fraud
Ar. Atueton said there competition
against the Bell telephone until eleven years ago
FOR the seventeen years that the system enjoyed a
the independent companies appeared Il was stirred
and IN the eleven subsequent years since 1895 was
compelled TO install 100000 telephones to meet COM
The fact S." said Mr. IIttleton, that the New
to-day, and # can never be fully developed under
the process and system Of the present company.
! per cent the first year, and so on. II we make
money ,aSS the city viii make money It snt dupca
Hnney pretended TO reduce the charges SIX months
did do2 They did not reduce the cost of the mes
s4g.ei, 1ney reduced the rental OF the receiver
charge you rental The cost Of messages was not
II New TGFk & City win give US" Mr. 1Attleton
sc; Mnat & +Sew York has given 70 the New York
franchise Tor nothing $1,000 gor INTO & Ins city.a
20 the city and the free OF the city's subWsvs
ne Of5sE:. '',,',''S'' - 'ash 70 guarantee
that the plans Of every inch OF slbva1a s9
by the Empire CITY subway Company were on fie