The Montgomery advertiser., 1906-04-03
BUSINESS MEN REPORT ON
 THE EVILS OF TWO SYSTEMS
No General Inter communication With Two Telephone Systems and Alleged Re-
 duction Not Real.

high as or higher than, the average
 annual charges under the graded rates
 ot the Bell Companies in these cit
 ies.
 Tn Philadelphia during the fiscal year of 1905 the average gross income
 per station of the Bell Company un-
 der graded rates was s57. For the same period the average gross fn-
 come per station of the independent company under flat rates was S56.64.
 In the latter case tine maximum busi-
 ness flat rate was S3e, with d dimin-
 ishins scale for party lines, residen-
 ces, etc. These figures were given by
 the officials of the two companies in
 formal statements made to the Trades
 League of Philadelphia.
 Tn Baltimore the average annual
 earnings per station of the independ-
 ent company for the fiscal years 1901
 and 1902, were S37.6i. The company
 increased it's rate more than one-half.
 to nearly the Philadelphia scale. The
 average gross annual earnings per
 station were thereby increased to $E1
 for the l.scal year, July, 1903. to July
 1904. as stated by trs president of the
 company in an affidavit recently made.
 During the fiscal year 1903 the aver
 age gross annual earnings per station
 of the Bell Company were si1.5, and
 for 1904 they were Ss2.SS.
 Ut is thus shown that the independ
 ent service. which purports to be the
 cheaper. is not so in reality. but on
 the contrary is the more expensive, both absolutely and relatively. as it
 involves an equal or greater outlay for
 much inferior degree of utility. Restriction of Utility. The effect of two rival telephone systems in one city is to divide the population into two parts, without
 means of telephone communication with each other except at excessive cost. While a single system promotes general intercommunication svo sys- tems make it impracticable. Two sys- tems therefore greatly restrict the utility of the telephone. seriously inn pair its value and impede its conner | cial development.
 Rival Systems an Economic Waste. It has been shown that a single sys- | tenn can perform the desired service
 much more efficiently and at less ag- gregate cost than two systems can. ! It is obvious that two systems Involve duplication of plant and organization. which entails a heavy additional bur den of fixed charges and operating ex- penses much of which would be un- necessary if the service were per formed by a single system. This du- plicated outlay being in excess of the amount really necessary to perform the service, is an economic waste. In telephone operation no compensatory benefits to users in the form of lesser cost of service or increased efficiency have yet developed to justify this | waste. The dangers coming from 1t are easily seen. Unless it is provided for in the charges exacted from con- sumers the capital investment will be gradually eaten up. In the meantime. as abundant experience in railroad competition has shown, equipment will be permitted to deteriorate, operating expenses will be reduced below the proper limit and the efficiency of ser vice will be lowered.
 General Results of Telephone Compe- 9ition.
 "In the opinion of this committee. competition In telephone service Is not public benefit and not useful
 means of regulating telephone charges.
 As shown above. little or no bene6t
 accrues to any part of the public in the way of reduced rates, many con-
 sumers are compelled to increase their asgregate outlay, the utility of the service is cut in half, expansion made difficult, the efficiency of the service threatened and the capital investment enlarged.
 "Competition in telephone service does not offer a choice of benefits, but compels a choice of ~vils-either haIf-seryice or n double price," adv.