The Washington times., 1915-01-14
PHONE RATE PROBE
BEGUN IN BALTIMORE
Government and District Off,
ciaIs Interested in Maryland
Valuation Case.

Members Of the Interstate Commerce
Commission. corporation officials and
telephone users generally are expressing
keen interest in the telephone rate in
vestigation which has just been started
before the Public Service Commission OF
Maryland. at Baltimore.
The plan adopted by Osborne /. Yel-
lott, peoples counsel Of the commission,
for ascertalning the value Of the Ches-
apeake and Potomac Telephone Com
pnny, has been termed revolutionary.
but many Government officials here are
inclined to believe 1t will find favor In
other States. Mr.. Yellott Is desirous Of
placing a fair value on the corporations
property and to ascertain what rates
would be fair to the public.
The plan Of inquiry may be represent
ed az an inverted pyramid. At the top
Of this inverted pyramid are all the
units Of all the classes OF the companys
BY sssss sssss Of Of nns
the value Of them are reduced again
and again to general figures. so that
| when the inverted apex of the pyramid
Is reached the total valuation OF the
property Is had.
Two Sides To Cooperate.
There really are two Of the inverted
| pyramids: one the peoples counsel's
and the other the company's. Both are
| worked out according to exactly the
same rules and upon exactly the same
forms. Thus. each side starting with
all the units Of all the classes OF the
companys property, there is an even
and consistent progression toward the
total valuation.
| This permits checking of one side 8
calculations of value against those OF
the other at regular and frequent
stages, so that where there Is agree
ment upon valuation, that much Of the
| valuation question is removed from
| controversy; where there Is disagree
ment, there is opportunity easily to as
efforts to adjust failing. to lay the dis
| agreement before the Public Service
Commission in such manner as to per-
init that body to inquire directly into
the question and make its decision di-
| rectly upon 1t.
Mr.. Yellott stated today that so far
the work of appraisement OF the COM
pany's property by both sides-that is,
by the peoples counsel and the COM
pany's men-had been devoted chiefly
to equipment. With about $7.0oO.OOo Of
such property, he said, the differences
in valuation between his figures and
those of the company amounted to only
about per cent or per cent-about
side had seen the others figures until
Tuesday night and that the checking
| up and ascertainment of differences
occupied only about twenty minutes.
Cost Light So Far.
The method will be applied to deter
mining the value of each of the classes
of property upon which the company is
held to be entitled to earn revenues;
that is, upon real estate, equipment. ex-
change lines, toll lines, rights of way.
intangibles. construction, overhead and
| working capital. Mr.. Yellott said in his
statement that up to this time the cost
| has been about 5000. and that he cX-
| poets it not to exceed $4,000. whereas
he calculated that if the usual method
| that of employing an engineer to make
| an appraisemcnt of the company S
! property to be set against the appraise-
| ment OF the company's ensineer-had
| been used the cost would have been
| about $4,000.
The probe is expected to require
| weeks of hearings.
| Facts developed at the inquiry arc
expected To be Of value in this city.