Evening journal., 1918-10-07
U. U.S.PHONECONTROL. S.
DESCRIBED BY Vail
No Changes to be Made in
Operation. Purport of
Statement
PENSIONS TO
BE CONTINUED

The Bell Telephone system Is to be
maintained and operated by The Govern
ment on The same basis as before II was
taken over by Presidential proSlama-
ton and Is 10 Do turned back 100 per
cent as received.
These arc the outstanding features OF
the agreement as 20 compensation basis
reached by officers OF The Americ "a Tele-
phone and Telegraph Company and
Postmaster General Burleson. The en-
tire program is given In statement
issued by Theodore y. Vail, president
OF the compsny
This statement contains the follow
ing:
The principles adopted as a basis Of
compensation were:
First, Any compensation fixed FOR the
period OF control was 70 be considered
as compensation for an emergency pc
rlod and not In any way considered as
establishing a value 10 the property.
Second. Operation OF the property IS
20 be continued on a basis OF efficiency
relatively equal 20 that OF the past.
Third. The property Is 10 be fully
maintained, 50 as 10 be turned back 10
the company as good as wien received.
Fourth. Appropriation from current
revenue for maintenance, depreciation
and obsOlescence TO be the same as the
past-an average OF 5.72 per cent. on
the fixed capital-amortlzstlo OF in
tangible capital 10 be relatively equal
10 the past; all unexpended balances
from both TO be invested in the plant
OF the system. Charge against the de
probation reserve 10 be in accordance
with the rules Of the Interstate Com
merce Commission.
Fifth. Employees pensions. disability
benefits and death benefits now In op-
Grafton 20 be continued.
Sixth. All taxes. municipal. state or
Federal. TO be paid or reimbursed II
paid by the companies by the govern
ment
Seventh. The license and rental con
tracts between the American Telephone
and Telegraph Company and the H.
censee companies 10 be continued, and
the American Telephone and Telegraph
Company Is to give such advice and as
sistance as the pOstmasier-general may
require, is 20 maintain is scientific
technical and engineering departments
its patent protection for The benefit OF
the property in the same manner as
heretofore The master-genersl TO
have the benefit during the period OF
control in the operation OF the wire
system, OF all inventions, discoveries
and ideas which may now or hereafter
be controlled by the Bell system.
These provisions are for the protec-
ton OF the property. the service and
the art and provide for continuation
OF the service, for the continual de-
velOpment OF the art. az well as the
protection Of the developed situation,
and are for full protection Of the pub
lie in its service and the pr0prietors
in the property and development.
For the security holders there Is
provided:
la) Payment OF the interest and ex-
isting amortization charges on all out
standing securities or obligations OF
the Bell system in the hands Of the
public. including the 8 per cent. con-
vertible bonds issued August 4, 1918
lb) Payment Of dividends at the eX-
isting rate upon the share capital OF
the Bell system outstanding In the
hands OF the public.
lc) Payment OF any charges. inter- /
est. dividends or other costs on new /
securities or share capital issued in dis
charge, conversion or renewed or eXten- |
sion OF present obligations.
For extensions 10 property; As pro- /
yided above, uneXpended depreciation .
shall be invested in property OF the .
system.
American Telephone and Telegraph I
Company surplus shall be invested in
rs property.
Surplus profits from operation may
De invested by the Postmaster General.
II securities or capital can be issued
II fair terms the Bell system will IS
me its securities II desired. but the I,
nominal value OF the securities shall
Tot exceed so per cent OF the amount
expended in the property.
. Extensions to its property made with
he approval Of the Bell system by
money furnished by the Postmaster
ieneral shall be paid for in Install
nents Of , per cent per annum after
he period OF control ceases.
Extensions by the Postmaster Gen
'ral 10 meet abnormal conditions and
made without the approval Of the sys-
EN- shall be appraised by the Inter
tate Commerce Commission at the end
u the period OF control and their value
o the system as appraised shall be
,aid FOR in installments OF per cent |
,er annum.