The Washington times., 1917-01-26
Counsel for c. & P. Tells House
Committee Charges Provided
Are Inadequate.
ALLEGES DISCRIMINATION
Insists Plan Also Denies Con-
stitutionaI Right to
Corporation.

Continuing his argument against
the Lewis bill providing for Govern
ment owned telephones In the District,
Attorney John L. Swayze. gene al
counsel for the Chesapeake and Po-
tomac Telephone Company, today con-
tended before the House District Com
mittee that the measure contained
rates which were not only discrlmina-
tory but were inadequate.
He also insisted that the provision
in the bill which would preclude q
termination of the Government own
year denied the telephone company
its constitutional right to a day In
court
On Section Z.
Addressing himself to section of
the Lewis bill. which would empower
the Postmaster General to take charge
of the telephone lines within a radius
Of nifty miles of the District during
certain hours to put farmers and con-
sumers into communication with each
other at low rates, Attorney Swayze
said:
The initial rate of one cent, plus
one cent for each ten uileI of terri
tory covered by tn call is absolutely
unrSasonable.I do not contend vhat
the Government hasn't the power to
take charge of these lines outsid OF
the District, although this bill pro-
vIdss for an experiment within the
District. but 1 do contend that the
rates are s.bnormally low"
Reads Decision.
Attorney Ewayxe then read the de-
cision rendered. in the Eigni.e case
b. Justice Charles Evans Hughes,
while the lat was a member of
the Supreme Court of the United
States.
1T was clearly stated in that de.
olson, said Attorney SwRyze, that
a public utility corporation cannot be
legally compelled to perfom serVi'
ees for less than cost and that in
fixing rates ali the OUTLAWS incident
to the performance of the service
must be considered. In oLher>words
the rate must be composite and cover
au costs. Tie public utility corpor
alton is entitled to a rate covering
actual cost, plus some profit"
Congressman Lloyd asked II the
,increasin business which Congress
man Lewis believed would result
from decreased rates would not
bring the company as much money
as It is now receiving for fewer calls
at a high rate.
1T would not" replied Attorney
Swayze- The rates prescribed in
section Z are non-eompensatory. The
more you increase and pile up bust
ness on these rates the greater the
loss will become. Rates should al
ways bear the burden of business
There must be a reasonable flexibility
Of Judgment in determining rates" E
Gives Police Powers.
The attorney also argued that the
Lewis bill not only. sought to take
over the telephone company's prop
erty in the District. under the right
Of eminent domain. but also proposed
giving the Postmaster General police
+ or regulatory powers now vested in
public service and corporation COM
missions in Virginia and Maryland.
Referring to te phrovision OF the
bill which he said denied the COM
psny its constitutional right, Attor-
"ey Swayze said:
IndehnIte Restraint.
THE company is not only restrain
ID for year from going into court
% legally protest against confisca-
lion OF its property and the fixing oil
abnormally low rates, but an indeh-
mite restraint is provided by the
clause which says the experiment Is
not to be disturbed until the Postmas-
ter General is satisfied II has had a
fair. adequate. and complete test"
Commenting on the fact that sec
ton would give Washingtoniani
EfDAf 20 ra1l fa ,4y
rate, but did not provide for the same
rate for farmers calling up Wash
ingtonians, Attorney Swayze said:
Considered UnJustiaabSA
Classification OF rates by the char
acter OF the message has been hith.
erto considered unJustifable. Logic.
ally there would be as many rates
as there were different kinds Of mes
sages requiring judgment upon the
relative value, not OF the service but
OF each specific message, IS between
social and business message, a call
for the doctor and a call for the cor
ner grocery, and who IL to have che
power OF exercising this Judgment.
"AlI telephone experience indicates
that this experiment is bound to be
a failure. The rates prescribed con
stitute an avowed favoTitism for a
particular class Of service. which the
Supreme Court of the United States
says IL unlawful In Northern Pacific
Railroad Company VS.. North Dakota
236 U. s., SIS, where, as here, low
rates were imposed TO aid in the
development OF a local industry, Goa
mining, and thus comforting a benehi
upon the people OF the State.
No Mutual Interchange.
This clause Is so restricted that Il
is not a mutual interchange OF bene
fts, as the grocer cannot. under the
bill, sell his goods by the use of the
same message by which the sale oil
farm produce is effected. This seems
to be an impossible situation.
While II is not n ecessary that
there should be uniform rates or the
same percentage OF profit on every
sort Of business, and although there
IL room for reasonable classification
yet an attempt to ix a rate upon a
single commodity or class Of service
in q particular zone at what II prob.
ably less than a compensatory return
is held by the Supreme Court TO be
unreasonable, unjust and discrimins-
tory.
Provisions for Interchange of the
specified messages are discrimInatory
as against other classes of traffic
" hose interchange Is not by this OIL
or otherwIe made compulsory.