Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1914-06-19

tory of the development of the tele-
phone in Pennsylvania and an expo
sition of the theory underlying the
wonderful organization of the tele-
phone business was given before the
Public Service Commission yesterday
by Frank H. Bethel, head Of the Bell
companies in Pennsylvania. 1t was
practically the close of the Bells OBJ
Jections to the telephone rate schedule
proposed by the commission and next
September the commission will hear
those who object to the position taken
by the Bell.
Mr.. Bethel testified relative to rate
making and gave brief history of the
telephone business. He has spent
twenty-three years in the business and
during the entire period was connected
with companies with headquarters in
New York. Philadelphia, Baltimore
and Washington. Mr.. Bethel said
when the telephones were first placed
on the market the management had
absolutely no idea of exchange devel-
opment. The telephones were rented
with the idea that the renter would
connect his house and store. or fac
tory, and it was not until 1878 that the
exchange idea was developed. Mr..
Bethel brought out that the telephone
companies now do not rent telephones,
but sell telephone service. He also
spoke of the development in New York
city, which in 1890, when he started
as a salesman in that city. consisted
of 10000 telephones, whereas to-day
there are in service $40, 900 telephones.
Really Began in 1894
Mr.. Bethel then went on to say that
the telephone development as the tele-
phone companies know 1t to-day really
did not start until 1894, with the es-
tablishment of measured service con-
tracts in large cities. At this time, too
| dc, 1xyn ficin q
were used to aid in the telephone de-
yelopment. Relative to rate making
Mr.. Bethel said that the telephone
companies were sailing in uncharted
seas and that they did not know what
to charge nor what was proper basis
upon which to charge. When tele-
phones were rented the price was $40
a set, but with the development of the
exchange idea it was necessary to look
about for some basis upon which the
charges could be made. AS matter
of fact, Mr.. Bethel stated, there is not
now, nor never has been. in the tele-
phone business throughout the country
uniform rate-making scheme, put
in all cases rates depend very largely
upon very many circumstances which
must be considered before rates are
established.
Taking Altoona merely as a typical
example, Mr.. Bethel spoke of the es-
tablishment of telephone exchange
in 1881. when, with a crude switch
board as well as crude instruments
with service to perhaps so other sub
scribers. the rate was S4S for
grounded circuit. In 1892, when me-
tallic service was established, the rate
was increased to $85; year later to
500. and in 1898 was reduced to $50.
In 1899 it was increased to $72 and
in 1909 reduced to $4S, just exactly
| A 10 n
for service with SO subscribers, whereas
at the present time there are some
1000 subscribers connected with the
Altoona switchboard. The rates men,
toned were for what is known as un-
limited individual line service.
One mistake that was made by the
early managers, according to Mr..
Bethel, WIS that there was too great a
difference between the individual and
, marty line rate. The result was that
too many subscribers took inferior
service. In other words. they were
served on party lines, and in very few
cases were there individual lines in
service on account Of the great differ
ence in the rate. This resulted in ar
unusually large number of busy re.
ports being given and consequent pool
service.
How Scranton Grew
. Mr.. Bethel took Scranton as an.
other instance Where the rate Tor un'
: limited individual line service was 500
! and then cut to $50, which might seen
like drastic cut but really made very
little difference in the revenue of the
company, for the reason that, although
500 rate was quoted, yet there were
| very few subscribers at that rate
r When the rate was reduced, however
/ to SEQ 1t brought about large in.
crease in subscribers at that rate, ant
this, according to Mr.. Bethel, is wha
has been history of the telephone de-
yelopment all over the state.
The business and residence rates IL
Pennsylvania were the same unit
: 1893, when a residence rate schedul,
= was set up.
Speaking Of the toll line rates, Mr
, Bethel testified that the use of the tol
l lines was q matter which required tn,
{ education of the subscribers. He sait
= that there was no systematic schem,
Of toll rate making, but that rate
were based upon any number of cir
cumstances which entered into tn,
3 case. For instance, it very often hap
/ tpened in the early days that in ordel
r to reach town ten miles away 1t wa,
I necessary to make use of fifty miles o.
1 toll line circuit If rate had beer
made based upon the use of these fift,
r miles of circuit it stands to reason
/ according to Mr.. Bethel, that there
would be very little use made of the
| service For that reason II was necea