The Washington times., 1917-01-25
SAYS PHONEBILL
Is CONFISCATORY
John l. Swayze, Phone Com
pany Counsel, Cites Legal OBJ
jectionS to Lewis Bill.
CONTINUED from First PaEe)

CONTINUED from First Page.)
would deal with it any less literally
than II is now dealing with a large
number of other systems which 1t
does not control"
Great stress was laid by the attor-
ney on the fact that the Lewis bill
provided for the appropriation Of ST.
100000 for the purchase OF the COM
pany's physical property, while the
value OF the plants earning power is
in excess of that.
ITO illustrate the importance of
standard apparatus, IL we assume that
the automatic system, which Il is
proposed by the introducer of the
bill the Postmaster General shall in
stall In the District OF Columbia IL
one which will not work in harmony
with the apparatus now used
throughout the rest OF the country
by the Bell system, the destruction
of service that would follow here
would be so great the introducer
would have succeeded in actually Sc
gregating Washington telephones
from those throughout the rest OF
the United States, since the lines OF
the Bell companies are those by which
Washington must reach all outside
telephones.
Recounts Difficulties.
ar Washington is to be expert
mented on as Mr.. Lewis and other
advocates of the bill desire, the rela-
tionship of the local service when de-
prived Of that OF tho system from
which 1t now holds such valuable
wyh lob q
such value engineering and other ser
vices should be considered and the
question asked whether It is intended
to compel by some means not dis
closed the junking of all the tele-
phone apparatus outside the District
OF Columbia that does not harmonic
with the new automatic system.
mo provision is made for connec-
tion with other telephone companies,
which seems to be left to bargaining
at arms length in which besides com
pensation service questions of the
gravest importance may be involved
and the Bell system must not only
make a good bargain, but must pro
tect its service and property.
Reviews Suburban sItuatIon.
THE large number Of District peo-
pie living in the suburban territory
the District should be
considered in weighing the
effect OF the proposed experiment.
The difficulty in segregating any
community, fully recog-
nized by the men who have built up
the Bell system, is illustrated by the
absence OF provision in the bill to
give the suburban territory full pro-
lection and real service.
Condition That Control Service.
The local telephone system il part
of the general Bell system of the
country and therefore not only sup
plies local service but connects the
people of Washington with telephone
users Throughout THE United States"
said Attorney Swayze.
"All this service depends upon the
use Of paten trights, service con-
tracts. traffic agreements and other
and this service outside of
Washington depends ->~5n contracts
for interchange which are part of its
general relationship to the Bell sys-
tenn. To make the interchange eco
nomically effective all the companies
in the system have adopted standard
apparatus. standard accounting and
standard traffic agreements. Some
OF the apparatus under patent Is
most necessary for the efficient con-
duct of telephone business and with
on tit the service to the public will
be very much damaged.
Acquires Only Physical Property.
aye 1.-THE bill provides only for the
acquisition OF the physical property
Of the telephone company and makes
no provision respecting the patent
rights or the value OF the establish
ed business and other contract
rights, including those for connec-
lions with other companies. The
Supreme Cour tof the United States
established by its decision in the
case OF Monongahelia Navigation
Company VS.. United States, 14S u. 3.
312, that the United States in con-
demning property must take not only
the physical property but the exist
ing rights of the owners as to the
use OF 1t. Conhscation would result
from taking only the physical prop
erty OF the telephone company.
Says Users Would Suffer.
THE telephone users will suffer
equally by. the loss OF the rights en-
joyed by the company. The patents
are owned by the American Tele-
phone and Telegraph company and
their use, like other rights and privi-
leges enjoyed by this company by ar
rangement with the American Tele-
phone and Telegraph Company, is q
mutual right enjoyed by all the COM
panies in the Bell system throughout
the United States.
The bill leaves in doubt whether
the intention is to make compensa-
ton in cash as is required by weight
of authority or to compel the owners
to accept per cent United States
bonds. Provision for interest at
per cent from the date of possession
as of July 1, 1917. until the final
award is made by decision of the
United States Supreme Court after
a possible lapse of a long period SEEM
ingly constitutes conhscation of the
property of the company to the
amount between per cent per annum
and as a minimum the legal rate of
interest and as a maximum the earn
ing power at the time possession IL
IL