The Washington times., 1913-08-27
MUTUAL RELATIONS AND INTERESTS
OF THE BELL SYSTEM AND THE PUBLIC

the greatest number: that the inter
dependence of the telephone service
and the value. of complete and uni.
versal intercommunication Justify and
require some services partly at tht
expense of the whole for the benefit
OF the whole.
We believe that this highest com.
mercial value can only be attained by
one system under one common contro
and that 1t cannot be given bv inde.
pendent systems unless they are oper.
ated under agreements which result ir
one common control and one common
interest. in effect making them a single
system.
We believe that rates should be SC
adjusted as to afford the company
sufficient revenue to pay such wages
and compensation as will secure the
most efficient servicer to maintain the
very highest and most advanced stand
ards Of plant and apparatus, to carry
on such scientific and experimental re-
search and inventions as to apparatus
and methods as to insure the highest
standards. and to carry to reserve and
depreciation such amounts as will en-
able the company at any time to re-
place old plant and old methods with
new plant and new methods as fast as
they may be developed and found to
be to the advantage of the service.
We believe that In addition, such fair
charges should be paid upon the in
vestment In plant as will enable the
company at any time to obtain money
necessary to provide the plant re-
quired to meet the continuing demands
OF the public: and in order that waste
and duplication Of effort may be
avoided and uniformity Of purpose
and common control be enforced that
there should be a centralized general
administration in close communication
with and having general authority
over the whole on matters common to
all or matters OF general policy.
We believe that any surplus beyond
that necessary TO equalize dividends
on fair basis should be used by the
company for the benefit of the public
and should be inalienable for any
other purpose. and should be either in
vested In revenue-earning plant until
necessary to substitute plant which
NAV become inadequate or obsolete or
should be used to make the service
cheaper or better.
We believe that under nronar GOV,
ernmental control and regulation the
profts from promotion or operation al
lowed to be distributed should NOT he
so large as to warrant or tempt conn
plete duplication Of plant and orvani-
zation. with its duplication Of It's capi-
tal charges and its organization. oper-
ating. maintenance and depreciation ex-
penses: and we do not believe that
utilities giving at fair rates an efficient
and sufficiently comprehensive universal
service should be subject to limited
competition. not giving such service.
Competition which ignores the obIiea-
tion to furnish a complete and COM
prehensive service Is not competjtion
Is not for the benefit of the public IN
that II does not reach the whole public
interested.
II. therefore. complete duplication,
with its dual exchange connection and
dual bills for service. is a prerequisite
to complete competition. government
control and regulation cannot go hand
III Will COnnpeIlIlOn.
We believe that the record of the Bell
System will be accepted by the public
as fully in accord with these declara-
tions. Consistent adhertnce to this
policy has given the public of the United
states the best. most comprehensive
and cheapest telephone service in the
world and made the Bell standards the
standards Of all nations.
To remove any possible excuse for mis-
apprehension on account of the many
misleading statements which have been
circulated as to the alleged Unnecessary
and cvercapitalizatIon and excessive
charges Of the Bell system, the follow
ing stati,tics are given. Except where
stated. the figures are for the Bell sys-
tenn: that is. the American Telephone
and Telegraph and its Associated Com
panies.
The entire Bell system on June 80. 1918.
mad outstanding in the hands of the
public obligations q. e.. notes. open ac-
counts. bonds and shares) to the par
value OF s776.OO0.00o
The book value of the total tangible
assets, which Is considerably less than
their replacement value. amounted to
$50 0o". $40 Many appraisals OF property
included In these assets have been made,
and most of them under the direction of
public authorities. In no case has the
value as 1t stands on the books failed
to be sustained. and In most cases it
has been very largely exceeded. O
The total dividends and interest paid
during the year 1912 amounted to only
I'll per cent on the average of its out
standing obligations and to less than )
pcr cent on the average value of its
assets.
The actual cash which has been paid
into the treasury OF the American Tele-
phone and Telegraph Company on &C
count of the capital obligations now out
standing amounts to 80, ,O0O,O more than
the par of such outstanding obligations.
The Associated Companies collected
from the public and paid back in taxes
over $1,000. 900 curing the year 1912.
The steadily increasing necessities OF
the public not only for additional but
for new telephone service can only be
capital outlay. To meet these demands
during the six and one-half years from
1907 to June. 1918, inclusive. the increase
I'm telephone plant was as follows: Toll
line wire increased from 1.460, 900 miles
to 2,242, 900 miles; exchange wire in
creased from 5000, 900 miles to 1900, 600;
the number of exchange stations in
creased from 2.73O,OO0 to 100000; the
number of stations of Independent COM
NTH hn all