The Bennington evening banner. (Bennington, Vt.) 19??-1961, 1913-10-30
PHONE HEARING IS
RESUMED AFTER
VACATION
Testimony Related To Question
of Depreciation
PRES. SPAl.DlNG ON STAND
Says New England Company Goes
Not Have to Buy Through
Telephone Trust.

Montpelier. DC. 29.-President
Spalding Of the New England Tele
phone and Telegraph company occu-
pied the stand all day today before
the public service commission on a
continuation OF the telephone in
quiry. His testimony was largely
technical and almost wholly devoid
of special incidents.
The principal subject OF the day
was the ascertaining of what is a
proper allowance for depreciation
and how depreciation figure is ar
rived at Mr. Spalding said that as
a result OF estimates based on its
experience and best judgment, the
New England company and It's sub
salaries laid aside last year, as a de
probation liability, sum amount
ing to per cent of the actual value
of the plant
This figure represented the aver
age depreciation of score Of items
entering into the construction of
telephone plant.
This depreciation reserve was al
ways carried as liability and in no
circumstances could 80 to the stock
holders OF the company in the form
of dividends The purpose OF the
fund, he said, was to provide for the
replacement of The plant whenever it
became necessary to replace it be-
cause OF absolute deterioration, obso
lescence or because of extraordinary
contingencies such as sleet storms,
fires and the. like.
The commissioners asked MIR.
Spalding If he could explain unon
what theory Mr.. Lawrence of the
Springfield local telephone company
had managed TO increase his cap
itaization but the witness said he
was not familiar with the details of
that case and would not want TO ex-
press an option without having made
close examination.
a good deal would depend, he said
upon what charge, if any Mr.. Law
renee made for his own services.
whether the bookkeeper employed
by him in his other enterprises was
properly charged for the work done
for the telephone company and whet-
her q proportionate charge for rent.
light and heat was made for the tele
phon company
The commission also weni very
thoroughly into the question of the
purchasing contract between the
New England company and the Yves
tern Electric company. The latter
concern is the manufacturing and
purchasing branch of all the Bell
companies, and IS controlled by The
American Telephone and Telegraph
company.
Mr.. Spalding denied, however. that
the New England company as one of
the Bell subsidiaries. was compelled
to purchase its supplies from ,ho
Western Electric company. lie
maintained that this large central
purchasing and manufacturing agen.
cy was the means of enabling the
Bell companies 10 get standard ma
terial of better quality at lower
prices and withs better deliveries
than was possible elsewhere.
one of the conditions of the con
tract as he read it was that the New
England company might exempt
from the contract any article it de.
sired TO purchase elsewhere.
He quoted some figures TO show
that during the las, Eve years the
Western Electric company has Sc
cured an increasing amount of the
Independent telephone patronage of
the country, and that it had sup
piled to these Independents. in com
petition with other manufacturers
bids. 30 Pc cent Of the apparatus
and A. per cent OF the cable.
BY making the Western Electric
company its purchasing agent the
New England company has been able
to reduce the quantity OF stock car
ried in It's storehouses from an aver
age OF IS per telephone ia 1903 Co
an average OF s. per telephone ia
1918.
In reply 10 the suggestion that the
New England company was compel
ed to buy from thc Western Electric
company. Mr. SpaldIng said. THAT is
not SC If the New England company
found that il could purchase TO be-.
Ter advantage outside OF the West
ern Electric company. it would do so
az once"
Mr. Spalding vas giving the detail
figures for depreciation charges
when the session adjourned.