Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1913-10-16
HALL CALLS RATE
CUT CONF|SCAT|ON
Unfair to the People of Vermont
and to the Telephone Com
pany, He Says.
WOULD RESULT IN A DEFICIT
Net Revenue of the New Eng
land and Its Four Subsidiaries
in This State Less Than
Two per Cent.

the term applied this morning by Vice
| President f.. *. Hall of the New Eng
land Telephone company to the reduction
Of rates proposed by the public service
| commission.
Leaving aside any legal or constit,i-
| tional question:" said Mr. Hall, such a
reduction would he unfair to the people
| of Vermont and also to the company,
| for 1t would absolutely wipe out our
| proht and surplus and result in an actual
deficit"
Mr.. Hall was cross-examined for more
| than an hour at the opening of the
morning session by Mr. Cook of special
counsel for the state, and then closed
his statement with discussion of the
effect of the proposed rates In this he
said:
we are here in response to an order
to show cause why a certain schedule
of exchange rates which is substantially
lower than existing schedules should not
be put into effect; to show cause why
our intrastate toll rates should not be
reduced 20 per cent. and to show cause
why our so-called reduced toll rate
should not be abolished.
The first answer, the quick answer
the answer that suggests itself to US as
soon as the proposition is stated, is that
an order undertaking to promulgate such
rates would be in violation of law, and
would amount to COniiscation.
LESS THAN TWO PER CENT. PROFIT
''The aggregate net revenue of the New
England company and it's four subsidiary
companies in the State of Vermont
amounts to $4,000 per year, which we
Sh "a l,,Nt l.
on the property used in furnishing the
service. As We understand the law, we
are entitled to earn at least six per cent.
Accordingly, any reduction in our present
revenues would amount to conhscatlon.
As a matter of fact, the rates which
are proposed in this complaint would not
only wipe out the small margin of profit
now existing. but would turn the present
mcagre profit into a substantial deficit.
Assuming for the purpose of argu-
men that the order suggested by the
compainants involves no legal or con-
stitutional question, dsmissng that
aspect of the case entirely for the
present, I should like to undertake to
answer the question as to whether or not
such an order is fair order. as to
whether 1t is fair to the New England
company and it's subsidiaries; a to
whether it is fair to the independent
companies in the State of Vermont.
many of whom are rendering an excellent
service for the compensation which they
receive; as to whether ii is fair to the
people of Vermont who are using this
telephone service.
Let us see first whether Vermont is
now being fairly treated The Vermont
rates are the rates appearing in the
regular schedule of the company, which
are in force throughout its entire ter
rtory for communities and exchanges of
similar size. This general schedule has
been worked out under the instructions
of and with the approval of the public
service commission of another State.
That these rates are well and equit-
ably adapted to the requirements of the
citizens of Vermont Is shown by the fact
that under this schedule the telephone
development per 100 of population is high
er in the state of Vermont than in any
other State served by the New England
company Figures as follows are for the
average number of telephones per 100 of
population in the territory served
I'm New IIampshire...... SO per cent
I'm Massachusetts,. SO per cent
In Vermont ........ .......1O2 per cent
This would seem to show conclusively
that the rates are well adapted to Yer
mont requirements.
LESS REVENUE PER STATION.
"Supposlng we look at it from another
point of view, What is Vermont paying
for its telephone service as compared
with other States? The average revenue
for exchange service per telephone station
in Massachusetts is s3o95; in New FIamp-
shire it is $3.50; in Maine $3.50; and i'm
Vermont, $22.l0, showing that Vermont
produces per telephone station the lowest
average revenue OF any State in the ter
ritory. Thus again, looked at from an
other point of view it would seem that
the present rate schedules treat Yer
mont fairly.
hooking at the question in another
way, 359 per cent. of the New England
plant investment is situated i'm
the State of Vermont. and yet the revenue
earned from the plant instead of being
35s per cent of the total revenue, is only
236 per cent This IL after creditlng to
Vermont all of the revenue earned by
the plant within the State of Vermont.
Looking at II still another way, al
though the company has more telephone
stations per 100 of population in the ter
ritory which II serves In the State of
Vermont, II has to cover proportionately
more territory to connect these sub
scribers. In Massachusetts. for instance.
the company averages q telephones per
square mile, while in Vermont It aver
ages only Sh telephones per square mile,
Lot na al from