The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-02-23
SEE PHONE CUT
PROMISE IN BIG
COST ESTIMATE
Interest at 8 Per Cent. OH
500. 025.03t Less Than
Old Profit.
HOPE rs STIRRED BY
COMPANY VALUATION

At the close of yesterdays hearing on
telephone rates before the Foley legls-
lative committee IN the rooms OF Tho
New York County Lawyers Association,
at los Broadway, at which representa-.
tives Of hotels and apartment houses
testified that tho rates they paid the
New York Telephone Company necess!-
tates n charge of more than five cents
a call, j l.. Swayse. council for the
company. filed a statement showing that
it would cost 500. 92b.934 to duplicate the
physical property in Greater New York
owned by the company on June 30 last.
Prof. Edward y. Bem!s. the committees
expert. estimated the property's value
at $4,000, 900. This was $34 925.s3a
less than tho company's estimate.
The New York Telephone Company
made what was equivalent to an offer TO
reduce telephone rates in Greater New
York. s1.3s1. 900 a year when Il sub
mitted the statement. On the valua-
ton of s99.925. 93I. the 5 per cent. return
agreed upon ms fair by the oinpan the
Foley committee and the upstate Public
Service Commission would be $4,000. 600
annually. 1881, 900 less tina last years
net profit OF 1891, 900.
The statement hled by Mr.. Swayze
was compiled by Halbert r. Gillette, n
membe of the appraisal committee, and
Mas based on value rather than cost.
Mr.. Glllctte criticised prof. Bemis for
making an Incomplete study and FOR
not attempting 10 follow tho law pro-
Viding that reproduction cost now and
such cost less depreciation must be de-
ternined by inventory and appraisal.
lie said that the original cost must be
ascertained. Mr.. Gillette fxed the de-
probation at s5.O0O.O00 to $4,000. 600
and said Prof. Bemis had made only n
partial study OF tho company's boolss.
BcmiS Looks to Actual Cost.
In reply Prof. Bemis said he still
leaned strongly TOWARD valuation AZ
actual cost. lie added that. given the
cost, he would not ind physical APP
praisal necessary in fixing rates. Mr..
Gillette had estimated the cost OF repro
ducing the property at present day
rates, he said. while he believed a mo-
nopoly was entitled to n fair return on
actual rather than hypothetical costs.
lie expected to submit a rate schedule
on that basis at a meeting to be- held
tomorrow morning. ne stld. as a re-
SUN ~ VI nv company =
sources of revenue.
Most of the session was devoted 20
the testimony of hotel and apartment
house interests. all complaining of an
annua loss on telephone calls and say
ing they would gladly charge ; cents In
stead of 10 II the company would re
duce its charges.
Frederick g.. Muschenheim. vice.
president Of the Hotel .Astor Company
and chairman nf tho Tg1anhnn. ..Ap,tptt-
tee OF the New YORK Hotel Mems As
ISOLATION. testified that in 1914 the hotel
received from guests telephone calls
s4s,553.33, and paid the company s2s.-
Ol6.2s.
Figures s:.N7s Loss ut \stor.
Wages and expenses of sl3,362.Os
made the profit on service S5.l75.Oo, bu.
this was offset by $7.j53l2 rental value
OF the space occupied by booths and un-
paid telephone charges TO guests, maxi
Ing a net loss of S2.37Ni0 He admitted,
however hat An Independent interior
system would cost $500 a year and
that now the hotel gets interior service
Tree. \ > cent rate would mean an an
nual loss Of $1,000 under the present
rates. he said.
NJ. II. Winkler, representing tax
payers associations. asked Mr.. Muschen-
ltlm II ne mao Dthli tllt inc Metro
politan Life Insurance Company con-
templatcd installing an automatic in
terror system and If he believed K would
save money. H. read a statement hat
the Plaza Hotel OF Chicago made money
on a i cent rate. and that the Chicago
Telephone Company made Il profit Of
81. per cent. IL 1914. Mr.. Muschenhe!m
admitted that the Aston did not wish 10
encourage the general public to use It's
pay stations.
The Waldorf Astoria filed n sta te-
ment showing a net loss for tho year
ended January Is, 1912, OF S2,+67.25,
but its floor space estimate was only
sl.S25, instead OF the S7,553 estimate
by the Aston.
The Ritz-Cariton said It's loss was
$ij6 50. and Thomas Il. Green, pro-
prietor of the Hotel Woodward. a
smaller hotel, said his operating loss
for the year ended October, 1914. WAS
sS76.75 and his total loss 81, 100. He
said the hotels tried TO keep their tele-
phones private and prevent "undes!r-
ables" using them.
Calls Present contract Unfair.
scented by Albert r. Weslau, president
~ the Washington Heights Taxpay srs
Association and owner OF several apart
present contract with the New York
Telephone Company, which he called un-
iair. a local cal, costs IN apartment
house from 6 10 . cents. exclusive OF
the operators salary In one OF hts