The Montgomery advertiser., 1906-04-03

The special telephone committee of the Merchants Association of New York was composed of the following gentlemen:
 Clarence Whitman, of Clarence Whitman and Company.
 John C. Flames, Vice-President The H. B. Claflin Company.
 J. Crawford McCreery, of James Me Creery and Company.
 Herman A. Metz, of H. A. Metz and Company
 Frederick E. De Berard. Editor and Statistician of the Merchants Asso- citation.
 These are names of men who are not only well known in New York. but throughout the entire business world. They made an exhaustive re- port upon the subject of telephone competition. and under date of June 29th, 1905, that Association. by the President. MT Clarence Whitman, quot cd from that Committees report as follows:
 Increased Outlay Due to Competition.
 During this committees inquiry, statements have been received from merchants in various cities where competitive telephone service exists, to the effect that competition has re- suited in an increased instead of d de- creased burden of cost, and in d diNid- ed service which has materially ob- structed intercommunication Business and professional men find 1t impracti- cable to dispense with the established telephone syste no matter what in ducements of apparent low price may be offered by new company. General intercommunication Is the essential re- quirement especially for business men. This can not be assured by either competing company in case or a divided service. The use of both systems and an increased outlay is therefore compulsory.
 No real compensa tory advantage is derived from this added expense. It may be assumed that the addition of a second system increases the number of persons who may be communicated with by telephone, and therefore ex- pands the utility of the service. This assumption is misleading. Most of the telephone placed by new compet- ing telephone system do not displact telephones already in use, but simply duplicate them. h all these cases facility of fntercommunication is. not enlarged The real increase of possi- ble connections is small, and obtained at disproportionately large cost. This | is illustrated by the ease of Baltimore in that city the local Bell Telephone Company has somewhat more than lS,- 900 stations, the independent company between 5000 and 5000. All examina- tion of the lists of the two compa- nies show that more than half the in dependent company's subscribers are also subscribers to the Bell Company An independent inquiry was made by member of this committee in the City of Baltimore on this phase of the question. A leading merchant stated that practically for each $1O0 per year paid for the servIce of the local Bell Company, with the ability to reach through it's system more than 1S.0OO other telephone users, he was required to pay for the service of the independ- ent company an additional $50 per year for the ability to reach less than 5000 additional telephone users. In this instance, the effect of competi- ton is to increase the aggregate ex- pense about 50 per cent, while the Ia ciIities are increased but about IT per cent. If the new facilities were combined with those of the original company instead of being isolated, they would be far more effective and could be supplied at much less cost.
 Alleged Reduction In Rates Not Real
 The principal if not the sole argu- rent in favor of competitive service Is the alleged lower rates commonly offered by d new company in compe- tition for business. Tn fact, the aver age annual charges under the fiat rates of the inde sendent companies in Philadelphia and Baltimore are as