News and citizen. [volume] (Morrisville, Vt. ;) 1881-current, 1914-03-18
WILL APPEAL 10 COURTS
Vice President Hall Tells Why Order
Cannot Be Complied With

New England Telephone and Tele-
graph company made the followin&
statement of the position of that COM
pany relative to the order issued by
the majority of the public service
commission Of Vermont:
Never before in the history of the
New England Telephone and Tele'
graph company has it taken any APP
peal from any order or recommends
ton by any commission, either state
Or federal. circumstances surround
ing the present case, however, are
peculiar and the finding is one which
the company is unable to understand
in view of the facts and the evidence
presented to the commission.
In justice to the telephone using
public in the state of Vermont and the
other states where the company oper-
ates, as well as in justice to the COM
pany itself, the officers of the COM
pany feel that it is their duty to ap-
peal from the decision of the majority
of the commission in this case, and
wish to state frankly why such an
action seems to be the only course
fairly open to them.
The net revenue of the New England
company on its Vermont business at
the present time represents less than
percent return on the value of the
property located in Vermont. The re-
auctions proposed by the majority OF
fhn 1iCci 0tin "a
wipe out all of this net revenue.
Although the commission admits in
its opinion that the company is en-
titled to earn at least percent, it
undertakes to establish, by the order
of the majority, set of rates under
which it would be impossible to earn
even l percent, provided the company
continued to maintain its plant and
the quality of its service.
The majority opinion seeks to justi-
fly these apparently contradictory con-
illusions by arbitrarily reducing the
value of the company's property, as
shown by the uncontradicted evidence
in the case, to figure far below its
actual cost and far below what il
would cost to replace it in its present
condition. 1t then proceeds to arbi-
trarily reduce, on paper, various &C
tual costs of maintaining the plant
and furnishing the service by making
various assumptions as to values and
costs which are not only not based
on any evidence presented at the
hearing, but which are distinctly con-
trary to the uncontradicted evidence
in the case.
The majority of the commission
then present a compilation of figures
based on these various assumptions
which they argue justities the reduc-
tons suggested and which, they
argue, shows how the company might
get percent return on this theOreti-
cal investment. BY carrying these
assumptions still further and by arbi-
trarily, on paper, reducing the value
of the company's property by so per-
cent instead of by rs percent, it
would obviously be possible to justi-
fly, on paper, still more liberal re-
duction in the rates.
Unfortunately for the company,
however, upon whom rests the re-
sponsibility of furnishing the service,
these assumptions do not help very
much in the actual conduct of the
business. If an article costs a dollar
1t costs a dollar, and its value is not
by an arbitrary assumption,
on paper, that it costs so cents; and
the fact remains that if the rate
schedule as proposed by the majority
of the commission had been in effect
Turing the year ending June 30, 1913,
he company would have been left
without any margin of profit whatever
)ver and above the expense of fur
lishing service in the state of YER
mont.
Under these circumstances there
eem to be four possible courses open
o the company:
Ito acquiesce in the majority de-
ision of the commission and under
axe to have the loss on its Vermont
carried by the telephone US
ng public of the other states. We
10 not believe that this is fair to the
ther states, nor do we believe that
he people of Vermont would wish to
ave their telephone service upon
ny such basis. Furthermore, under
his proposition the company would
e furnishing certain grades of SER
ice in Vermont at lower rates than
he company would be charging fol
he same grades of service furnished
nder similar conditions in Other
tates. The company knows of nc
Iay in which it could justify any such
2-lf, on the other hand, the COM
any should adopt for similar grades
f service in similar communities in
ne other states, the reductions sug-
ested by the majority of the COM
Mission, the aggregate loss in the COM
any's revenue would more than wipe
ut the small margin now resulting
'om the total business of the COM :
any. This margin is already SO
nall as to be a source of serious con-
srn and has already resulted in a
smporary postponement of certain
improvements in equipment and ex-
'nsions of the plant.
3-The third course omen TO the ,