The Penn's Grove record., 1915-02-12

apartment houses to make their rates
5 cents a message. Moreover. when
than the minimum number Of
messages are to be sent, it should
no longer be necessary to contract to
take extra service in blocks Of 500
messages.
Value Put at s~s5,ooo,ooo.
In explaining how he arrived at
these conclusions, Prof. Bemis said
that he though the value Of the prop
erty, on which the New York Tele-
phone Company should be permitted
to earn a return was SOS, 900. 900. He
explained that this figure was based
on the fact that on Oct 81 the prod4e-
ton cost of the telephone company's
PROPERTY in the city was SIS, 520.127-
From this might be written OF for
depreciation the IL per cent. which
the company had accumulated from
its customers, which would bring the
value down to $685. 19, 692. Then a
very liberal allowance for working cap
ital would increase that sum to $751;
900, 900.
AS the courts have at time permit
ted companies to retain the apprecia-
ton in the value of their land and q
few other kinds Of property in order
to meet every possible contingency
of this nature the Professor set his
final figure at SOS, 900, 900.
Five years ago in testifying before
the upstate Public Service Commits;
sion an official of the company sug-
gested that it should add to the in:
vestment So 900 as its going val.
ne, and last October another official
asked on this score an allowance OF
about $13, 400, 900. But Prof. Bemis,
quoting the decision Of the Court OF
Appeals in the Kings County Lighting
Company's case of last March, held
that it was impossible for any com
pany which had been paying from its
inception to charge anything to its
capital account on this score. As
from it's very start in 1878 the New
York Telephone Company had made
a profit, it was not entitled to any
allowance for going value, he asserted.
Then remembering that the SUI
preme Court allowed the Consolidated
Gas Company s per cent. as a reason
able return, Prof. Bemis maintained
that the telephone company could
have no cause for complaint if 1t was
permitted to make Z per cent. which
on $65, 600, 900 would bring in s4.550.-
900. AS a matter of fact in 1914 the
company earned s9%.550,000.
In addition Prof. Bemis pointed out
that the profit was earned nothwith-
standing the 10 per cent. reduction
Of rates which went into effect on
Feb. l last year, and while the New
York Telephone Company was paying
the American Telephone and Tele-
graph Company as a rental for its
telephone transmitters, receivers and
induction coils, Az per cent Of its
gross receipts. This Prof. Bemis poiat-
ed out amounted to about 81 a year on
each telephone, whereas so cents
would have been adequate.
Could Still Make s5.675,ooo a Year.
Prof. Bemis attacked the arrange
ment between the two companies. The
telephone instruments, he urged.
should cost not more than So. and
the Wisconsin Commission had held
that so cents a year was enough to
cover maintenance and profit on them.
He denied that the American Tele-
phone and Telegraph Company gave
any local or accounting services to
the New York Telephone Company.
which would entitle it to the charge
of 50, and he believed, he said. that
at least $1.25 of It had been clear
profit to the American company. This
meant, he pointed out, that from the
542,6 73 telephones in use in New York.
the American Telephone and Tele-
graph Company collected each year
$67S,S41 which should have been left
to be added to the profits OF the New
York Telephone Company. So that
taking the property of that concern
at SOS, 000, 900 and allowing il 3 return
Of Z per cent. upon it. It would be
possible to make concessions to the
public to the value OF $685. 900 a year.