The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1908-09-26

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Definite action on the telephone mat
ter, which has had much of the atten-
ton of the city council since early in
the year. is expected to be taken at
Monday nights meeting, when the new
proposition. presented last Monday and
laid over for week, will come up for
consideration.
The suggestion that the city enforce
the collection in cash of the tax on EEL
ephones was made last spring. The
ordinance on the point provides
that the tax shall be 81 a. year on each
telephone renting for $50 a year or
more, and 80 cents on each telephone
renting for less than $50 year. The
Independent company has paid no Ii
cense tax, but has been giving the city
about fifty free telephones and paying
per cent of its gross earnings to the
city, according to the terms of its fran
chlse. The Bell company is paying 20
cash for license tax. but has been Civ
ing telephone service in lieu of tax,
under contract made with the city
about four years ago.
Several interesting questions have
arisen in connection with the relations
between the telephone companies and
the city as a result of the discussion.
One point was that the Bell company
did not have a franchise, although the
company has maintained from the first
that 1T has a valid franchise and the
city attorneys Office has held that the
company has rights amounting to the
same thing as a franchise because the
city has recognized the company's
right to do business here for many
years. The city attorneys office has
held. also, that no back license can be
collected from the Bell company, as the
contract with the city prevented that.
The council voted last Monday to re-
sclnd this contract Sept. 80.
The telephone companies have uues-
toned the constitutionality of the Ii
cense tax as applied to telephone COM
panies, point on which legal opinions
differ.
Several propositions in the nature of
compromise have been offered, but none
has been accepted by the council. These
generally took the line of granting the
Bell company a franchise to expire
when the company's corporate exist
ence ends in 1888. but required the COM
pany to pay ! per cent of its gross
earnings into the city treasury and to
furnish free telephones to the city. The
last of these was offered by Council
man Fernstrom Sept. IA. 1t was re-
ferred to committee and pigeonhoIed.
What Amendment Proposes.
The latest phase of the question has
the form of amendment of the existing
general ordinances. and does not go
INTO the matter OF franchise or recog-
nize any company specifically. 1t
makes it optional with telephone COM
panies to pay in cash the tax now pro-
vided by ordinance, or to furnish the
city fifty free telephones and pay / per
cent of gross earnings TO the city, This
would not change the present arrange
ment as far as the Independent COM
pany is concerned. In the case of the
Bell company, it would mean telephone
service valued at $4,000 a year and
about $500 a year in cash, a total of
S6,400. The amount to be derived from
the Bell company under the present or
dinance would be approximately $4,000.
making a difference in favor of the new
arrangement of 81. 400, as the city would
naturally be required to pay cash for
its Bell telephone service with the
present contract rescinded and the
company paying the license tax in
cash. assuming that the constitution
atty of the tax were established.
The cash payments by the compa-
MES under the new arrangement. of
course, would vary as the volume of
telephone business in the city varied
The city would have access to the
books of the companies and would thus
be able to tell accurately the amounts
to be paid.