Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1916-08-03
An Explanation from Wilson.

stromsburg, Neb.. Aug. 2.-To the Editor
Of The Bee: Replying to Commissioner
Clarke's criticism Of my charges Of mall
administration in the Lincoln telephone case,
It is strange, to say the least, that neither
the secretary of the commission. the clerk IN
charge of the reports of carriers, nor the
other two clerks Of the accounting depart
ment, all present when I visited the com
missions Offices, knew of n study having
been made of the Lincoln company's reports
only two months BEFORE" and which "eon-
sumed three weeks of the accounting de-
partment's time" And It Is significant that
II such study had been made. the results
were not given to the people Of Lincoln In
some form or other. Looks like . post hac
study to me, and Mr.. Clarke's account Of II
deserves considerable examination--more, In
fact, than one can ask the press to publish.
Mr.. Clarke says my comparisons are I'M
fair. without Drawing his ire and going to
his Offices to examine the detailed reports.
l venture the statement that the Lincoln
company, with its valuation Of s1o1.20 per
telephone. has no greater proportion Of "ex-
pensive cable and underground construction"
than the Nebraska company property In this
state, with It's valuation of $77.6o per tefe-
phone. And why does he say that "the aver
age for the entire system in either the Ne
braska or Lincoln companies is materially
lower than the average for Omaha or Lin
coin" alone, when. according to the commits
sion's annual report for 1918, the average
valuation by the commission of the entire
Lincoln system Is sl1s.32 per telephone7
Mr.. Clarke also seizes upon the repro
duction new" valuation of the Lincoln COM
pany for his defense Of its extortion. con.
fession Of the weakness Of his position
Everybody knows such valuations are tainted
with much ruesswork. and not based upon
experience. The commission fixed the re
production new" value at $1,78b,907, or
Sl35.75 per telephone, and authorized the
company to use a sum equal to 9 per cent
Of this for maintenance and depreciation, or
$l60,781.70 annually. And notwithstanding
the property is of the age wherein the de-
probation Is above the normal, the actual
amount used to maintain the property during
the last three years averaged less than $685.
900 per annum, according to the company
reports.
Valuations are the crux of every rate
controversy. The problem is, as Zapp said
to Birsky: "How much is labor and ma
terial. and how much is pinochle. There is
q prejudice amongst consumers against pay
ing for pinochle overheads, timer overheads,
ETC." Twenty-one and seventeenth per cent
of the Lincoln valuation was for overhead
charges for which the company submitted no
/ foundation--no statement Of cost In detail.
And at the risk of again being charged with
making unfair comparisons, I give the aver
age cost of few telephone plants in this
state wherein the stockholders are too nu-
merous to admit Of the working Of fraudu-
lent schemes.
The Nuckolls county company. with 40s
stockholders, reports an average cost Of $50
| per telephone; the Monroe company Of Platte
and Madison counties, with s52 stockholders
an average cost Of $ss; the Hamilton county
| company, with 1895 stockholders, an aver
age cost of sS5. and the Glenwood company
| of Webster county, with 1897 stockholders
an average cost of only $21.4o. And the
average cost Of construction Of all Of the
telephones in the state outside the L. T.
| T. and Nebraska companies, Is but $48. II
seems to me that the commissions vslua.
tions, like Lincoln's famous rathole. will beal
looking into, and I'm going to keep on look.
| ing notwithstanding Keeper Clarke's asper.
sions on the morality of the thing.
| I am told had no right to include in tn,
revenues Of the Lincoln company $1,000 II
rentals for buildings. Perhaps not. but
would have needed microscope to see tina
amount in over s45o.ooo of annual gros,
revenues. And he says nothing about tn,
| expenses OF the buildings properly deuucibl'
from the rentals. 1 considered nothing bu
the net revenues in computing the rate o
return. And he says that have improperl.
included all the toll receipts. Yes, in gros
revenues. but do not think that did, in tn
net. l assumed the company had obeyed tn
law requiring II to divide these receipts witt
connecting lines. and believe that it ha
done so, though may be In error. dom
see how Il could have gotten by" with tn
whole cheese. And l also assumed that tn
commission had enforced It's order of tire
years ago, requiring full monthly reports o
all receipts and disbursements. Again l sa.
that I used only the net revenues as show
by the company's reports in computing tn
return upon the valuation. 1t seems to M
that Mr.. Clarke must either plead guilty t
not having enforced the commissions order
or to not having reduced the rates to sub
scribers. VICTOR E. WILSON.