New-York tribune., 1918-03-12
Bell System an
important War
Unit, Says Vail
Company Spends $118, 8,OO0,-
600 to Prepare for Gov
ernment Service

was told by Theodore \. Vail, prcsi-
dent of the American Telephone and
Telegraph Company, yesterday in his
annual report. Immediately after the
declaration of war. he said, precedence
was established throughout the system
tor government service and 10000
operators were moblized for this work.
AS a result of the war Washington
has become new centre of gravity of
the telephone system. The telephone
traffic centring at the capital has
grown as much during the last few
months as in the eight preceding years.
To meet this striking demand facilities
have been greatly expanded, and new
underground cable of the latest design,
containing $4,000 miles of wire, be-
tween New York and Washington, is
nearly completed.
Mr.. Vail makes it clear that the a,l-
justment to war conditions has been
made all over the country, but, Of
course, Washington is the nerve centre.
The toll switch boards at the capital
have already increased ivcfold in num-
Der, and plans are under way for fur
Their Developments. An entirely new
central office has been established in
the capital, and the previously exist
ing Offices have been tremendously
augmented in capacity. From the fact
that several Of the departmental null
tiplc switchboards in Washington are
large enough to serve a city OF 100000
population, one can get an idea of the
ircessant stream Of telephone COM
municaton that flows within the city.
The Telephone in the War
More than S1l8,OOo,00o, Mr.. Vail
states, was expended in additions to
plants and equipment The total oper-
ating revenues for 1917 were 1924 ,e94,-
$50, an increase Of S3O,319, $40 over the
previous year; total operating ex-
penscs, S204 ,406, ,144, an increase Of S28,-
50O,539; leaving net operating revenues
of 500, ,4S8, ,S06, an increase of 81 ,9l9, ,131.
The net earnings of the American Tele-
phone and Telegraph Company, segre-
gated from those of the Bell system,
IN round numbers were $4S,940, 900,
which was 4,197 900 more than the
previous year.
In addition to making the telephone
facilities equal to the new needs of
ashington at war, the company, ac-
ccrIing to the report, has been called
uron to participate in the national de-
fence by establishing telephone con-
nections for the National Army can
tonments, National Guard camps, divi-
sion headquarters Of the army and navy,
army posts, navy yards, aviation fields,
supply. quartermaster'a and training
camps, munition manufacturers, ship
building yards and various other mill
tary and quasi-military headquarters
throughout the country.
'lhe Bell company, says Mr.. Vail,
has a total OF approximately 1900
employees now engaged in serving the
country abroad and at home in various
Signal Corps of the army required a
large force of men specially trained in
telephone and telegraph work. From
the Bel! system some fourteen bat
tallons OF picked officers and men have
Joined this branch of the service. Many
of these are already over the water,
and those not needed for service in
this country will soon join them. We
have assisted in the organization of a
division Of research and inspection for
the American cXpeditionary forces in
France, recruited largely from the
scientific staff and laboratory forces
of the United States Coast Guard COM
pletc plans for the enlargement of the
coast guard telephone system were
made, and the work of reconstructing
and extending these lines was done"
Advises Government Regulation
After reviewing the year of accom-
plishmcnt, Mr.. Vail took up the subject
OF government operation of the telc-
phone and telegraph system. "What-
ever can be done by the government
through direct operation can be done
more certainly through control and
regulation OF private operation, thus
combining the potency Of the sovereign
With the initiative and interest of the
subject
"To those who look upon government
operation as the only remedy for exist,
ms; or fancied evils of private opera
ton the following assumptions, based
On experience, arc respectfully sub
mitted:
''ll from the net revenues of private
operation arc deducted all paid in
taxes, directly by the corporation and
indirectly on the securities by the hold
ers the balance would be no more than
sufficient if suificient-to pay govern
mont rates OF interest on the actual
Investment.
"'The financial credit-that is, the
balance shetland the service credit
that is, the dependence of the emplovc
on his employment and the sutficiency
and efficiency Of servicc-arc the con-
trolling factors in private enterprise.
The financial atflucncc and credit of
the government and its immunity from
direct control and the lack of depend
encc OF the government cmployc upon
ms employment are inscparable, in.
Ecrcnt and prcpondcrant factors in
government operation. Therefore. tho
desirable factors Of economic and eff
Gent operation are wanting.'
In laying down his conception of the
proper public attitude toward the tele-
phcnc and telegraph companies Nv
Nall points out: control and reeula.
ton should provide the best service at
the lowest possible cost. 1t should
eliminate duplication Of plant. encour-
age combination so far as combination
produces efficiency and economy. and
encourage development, even that cx
tension cI service toward which tba
more remuncrativc part of business
must be ccntributory.
"Nontrol and regulation should ho
control ana regulation and not oner-
alton. 1t should not handicap initiative
and enterprise by too great limitation
OIL that possible reward which alone
makes risk attractive. 1t should be suf-
'lclcht'Y liberal to encourage develon-
meht OF latent resources, and not so