Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1912-01-22
Council Bluffs
ROYALTY LIFTS PHONE COST
Telephone Company About to Effect
Compromise with the City.
TAXPAYERS WILL PAY THE TOLL
II Council Exacts Added Charge,
Cost of service Is to BE Raised
Under Consolidation of
Two systems.

A compromise offer will be made within
the next few days by the legal depart
ment Of the Independent-Bell Telephone
company by which the company VIII &C
cept its liability to pay the per cent
royalty on It's gross annual income In
accordance with the provisions OF section
fifteen of the charter OF the old indie
pendent company. which II acquired by
pendent, II was said Saturday BY City
Solicitor SImball, who is conducting the
city's side Of the controversy. that ABOUT
The only matter that will be LETT In
DISPUTE is as 10 the time when the COM
pany Inca ed the liability.
Attorney C. saunders, who represents
the comp will present the expected
compromis fer. What its nature Is
has not / disclosed. The seeuoh Oh
the acquIi harter under which the
ROYALTY Is anded declares:
A a further consideration for this
franchise. the said company agrees 10 pay
10 the city Of Council Bluffs. semi-an-
nually each year. 5 per cent OF us gr1ss
earnings from rentals OF ,elepnYn p,,,ss
Gated withln said city Of Council btuifs,
and As a further purpose OF carrying out
The provisions OF this section. shall fur-
nIsh me said city, at the time OF making
such payTnents a statement showing the
said earnings. and the said city snall Al
an times have access TO the sala com
pany's books for the purpose OF verifying
s,,ch statements. but il Is understood and
agreed that the provisions OF this section
shall not be In force and effect while the
Nebraska Telephone company, us sue
cessors or assigns shall have an exchange
IN this city. doing telephone business as
A competitor, and not paying 10 said CITY
a like portion Of It's earnings.
when DO Royalties Begin
While a majority Of the stock OF the
independent concern was secured at the
beginning Of last year and the company
at once announced that II was operating
under the new charter the contention Is
now that the royalties do not begin Until
after the completion Of the work Of con-
solidation and the actual cutover has been
effected on the new switchboard being In
stalled in the Scott street exchange,
Interest Is revived concerning what will
be the effect Of the city's enforcement Of
the payment Of the royalty. When the
company announced its determination las,
summer not to make any additional
charge above the established rates for the
Bell phones when the two systems were
fully combined II was with the under
standing that there should be no change
In the old status in relation to royalties
or taxes. This was intended to give all
Of the users OF the phones the combined
service Of the two systems at the cost
originally charged for the Bell alone. ap.
proximatlng about GOO instruments. In
sistence upon the royalty payments will
relieve the company Of its obligation NOT
10 raise the rates and increased cost Is
certain 10 an extent ut least TO meet the
royalty charges, Thus the tax viii come
directly from the pockets Of the people
II has been limited that the rates fol
business phones would be advanced 10 .
a month. and the rates for all mlsht b
fixed at q figure that would give III,
average annual rental Of all the instru
ments In offices and residences at 80
year. For 900 telephones this woult
mean the payment Of royalty OF 5. pei
cent on gross income OF $4,000, or ub.oo
a year. This little sum would come yer,
handy 10 the city officials. but the peopl'
who must be called upon to pay Il ma,
take another view OF and think II cheape
10 cut off the royalty for while at leas
and use II TO prevent an increase In tn
rates.