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

often below that at which service
could profitably be rendered. but in
order to develop the toll system such
rates were absolutely necessary While
there is not to-day any systematic
rate making scheme in effect, Mr..
Bethel testified that at the present
time his companies were working on q
scientific method and that they had
hopes of placing in effect before very
long toll rates based upon a systematic
scheme which would mean a reduc-
ton In number of rates and increases
in some others.
Revenue Falls OF
In speaking of the revenue which
the Bell companies in Pennsylvania
have earned Mr.. Bethel said that in
1884. with 1854 stations in service,
the average revenue per station was
$69.91. This went to $50 in 1892, with
$500 stations in service. At this time
the Bell companies discontinued very
generally the use of grounded circuits
and established in their stead metallic
circuits. In 1896, however, the aver
age revenue. had fallen to SIT, with
2l,OOO stations in service; In 1899 1t
was $50, with 3S,S64 stations; in 1904,
S4O.49, with 1877, ,042 stations; in 1909,
to S31.67. with 166.195 stations in
service; while on January 1 of this
year the average revenue per station
In pennsylvania was $30.42, with
394.7S9 stations served by the Bell and
central district telephone companies.
In other words, the average revenue
per station was more than cut In two
since 1892 and at the same time the
number of stations has gone up from
10000 to almost 100000.
In speaking as an expert Mr. Bethel
gave 1T as his opinion that the Bell
companies should earn gross 80 per
cent. of the total investment. In other
| words. that If the investment is 500
per station. then the average rate
should be $50 per station. He spoke
OF the companies just recently reduc-
Ing the number of working hours for
its men to eight hours a day. He
spoke of the increased expense on ac-
count OF the operators wages in
creased. as we'll as those rearrange-
ments of hours made necessary by the
labor law. and gave it as his opinion
that the expense per station will un-
doubtedly increase each year, thereby
making it necessary that the revenue
per station should also increase.
The Bells president offered in evi-
dence an exhibit showing that while
foodstuffs generally have gone up in
price, very many of them increasing
over 100 per cent. in the last few
years. telephone rates have come
| down.
Whole State Studied
| Mr.. Bethel told of having made q
study of every city, town and hamlet
in Pennsylvania in 1908 and 1909 anC
as result of this study the rates
which are now in service were put il
effect. Mr.. Bethel, In response Of
Ex-Governor Pennypacker's question
whether population was considered II
making these rates, said that there
were really five principal element.
which are considered in rate making
but that they must all be considered
together These elements he mentioned
as being: First, the character of the
population. whether native or foreign
born; second, the population itself
| third. the valuation of the property il
the area to be served; fourth, tn,
amount of money in the banks a!
showing whether or not the com
munity is prosperous, and fifth, tn,
area to be served.
Mr.. Bethel said that in makinl
rates the company considered ever
how streets are paved and whether Of
not the residents of the city plan
flower gardens. This all goes to SHOW
the characteristics of the inhabitant
of the town which is being studied.
4 Mr.. Bethel said that if telephon,
rates were based on the cost of fur
nishing the service 1t would mean hav
ing almost as many rates as there ar,
stations in service. For instance, l.
the man living next door to the tele
phone exchange wanted service
would cost very little to furnish hin
with that service. but man Twins
two miles from the central, office woul(
require the expenditure of quite a bi
Of money to furnish him with tha
service. Rates must be the sam,
within certain limitations or 1t woult
be practically impossible to conduc
the telephone business with any sys
tenn.
How Rates are Made
Mr.. Bethel said that he had beer
making rates for eighteen years ant
has no formula because there are too
many different elements which mus
be taken into consideration. Here il
what think should be DONE" said Mr.
Bethel. Find out the value of tn,
entire property. how much you mus
earn, and then make rates so tha
each community contributes it's share
so that no hardship is worked upo1
any one locality or community"
In response to question Mr.. Bethel
stated that in Pennsylvania for tn,
next thirty or forty years he estimate.
that the telephone companies will re-
ouire from $3,500,000 to $6,000,00O
year to take care of the new business.
At the afternoon session Mr.. Bethel
explained the relations of the Bel