The Sauk Centre herald. (Sauk Centre, Stearns County, Minn.) 1886-current, 1916-10-05
TELEPHONE RATES
SERIOUS PROBLEM
RAILROAD AND WAREHOUSE
!. COMMISSION FACE SERIOUS
SITUATION
INITIAL CHARGES TOO Low
MANY SMALL COMPANIES HAVE
MADE NO PROVISION FOR
REBUILDING FUND

The Minnesota Railroad and Ware
house commission is face to face with
a somewhat puzzling situation in the
rural telephone field. Of late there
has been brought to the attention of
the commission from various parts of
the state a condition that requires i'm
mediate remedy and which the per-
sons involved look to the state for aid.
The condition arises from the fail
ure of the companies in the first in
stance to adopt a schedule of rates
that would carry their burdens. The
situation is very similar to the one
that the fraternal insurance orders
were called upon to face some years
ago and which all but disrupted some
of them. In order to make their in
surance departments attractive GER
tain orders adopted set of rates
which later proved inadequate. The
inevitable result was that they were
compelled to raise their rates not only
high enough to meet the obligations
of the order but to cover the deficien-
cies of the period of low rates. The
only other alternative was dissolu-
ton of the order and the partition of
the assets among the members of
good standing. The majority raised
the rates and gradually are getting on
their feet again.
In like manner scores of rural tel
ephone companies in Minnesota and of
course elsewhere fixed their rates
without regard to the day of reckon
ing. No provision was made for de-
probation or to meet obligations. The
subscribers obtained of course tele-
phone service at a very moderate fig
ure and were pleased accordingly
But the future is not so bright judg-
ing from many of the communications
received by the Railroad and Ware
house Commission.
An instance is furnished by a tel
ephone concern with plant valued
at about $25,000.0O and serving 450
subscribers in one of the best known
farming sections of the state. The
secretary of the company writes that
the plant almost has outlivcd its use
fulness and unless reconstructed the
cost of maintenance will be in excess
of the earnings. 1t is suggested hat
the Commission make an investiga-
ton of the entire situation, including
ar examination of the books and IN
inspection of the plant and propose
a table of charges that will be Fair t.
all concerned. Otherwise, writes the
secretary, the company will be wreck
ed, the subscribers deprived of their
telephone service and the stockholders
liable for assessments to liquidace the
obligations of the company.
"This is an unfortunate condition.
said a member of the Railroad and
Warehouse Commission, "but We are
quite helpless. We can send men out
to make Investigations with view OF
ascertaining the reasonableness OF
rates but hardly to advise local COM
panies what rates to charge. Such a
duty was not contemplated by the
legislature and the amount of the leg
islative appropriation for the main
tenance of the newly created tele-
phone department would preclude any
such action.
Telephone companies should obtain
rates to cover operating expenses,
taxes and the maintenance of the
property in serviceable condition. 1t
is the duty of the officers to see that
this is done. The duty of the state *
to see that excessive rates are not
charged, that no discrimination or
other unlawful practices are engaged
in and that a reasonable service is
provided. We are advised that there
are numerous instances of a similar
nature. The plants that were Install
ed ten and twelve years ago, in many
instances, are now almost obsolete
through lack of repairs and must be
entirely reconstructed or discarded,
but it is up to the companies them
selves and not to the state, to see that
this is DONE"