The sun., 1918-11-21
BURLESON SETS
POSTAL co. PAY
AT $1,68O,OOO
Concern Asks $3,800,OOO in
Government Control
Deal.
SUIT Is URGED BY U. s.
Profit Differences Shown by
Mackay-Companies to
Be Merged.
SUIT IS URGED BY U. s.
Special DespotcA TO Tar suS.

statement issued to-day Postmaster
General Burleson declares the Postal
Telegraph Cable Company furnished fis-
ur.s and eapinss to the Post once De-
partment as a basis of compensation fer
Government control of it's lines and
facilities that did not square with sworn
reports submitted by subsidiaries to the
Interstate Commerce Commission.
As a result Of this situation and fail
ure OF officials of the company TO come
to an agreement the Postmaster q eneral
said that he has fixed compensation
figure which was believed to- be just,
and invited the company to sue in the
Court Of Claims for any difference.
Claim Differences shown.
The Postal company asked s3.s00, 900,
snd but s1.6s0.oo0 was awarded as d.
rect compensation. Other allowances
we're made to subsidiaries to keep up de-
probation accounts and to meet other
requirements
Postmaster-Generai Burleson puts up
for public comparison the figures fur
nkhed 10 the Department for compen-
by the subsidiaries. He says that the
Postal lie the only company with which
the Post ONCE Department has had
any difficulty in coming to an agree
,nent on compensation and takes oc-
casion to deny statements made by Mr.
Mackay with respect to the compensa-
zion paid the Western Union Company.
His statement follows:
'Postmaster-General Burleson an
he he, .
POSSIBLE to accept the proposal OF the
Postal Telegraph Cable Company for
compensation for It's land lines during
the period of Government control and
had therefore made an award fixing the
compensation at ffgure which was. be-
lieved to be just In view of the best
Information obtainabie by the Depart
nent
Inability to come 10 an agreement
with the Postal Telegraph Gable Com
pany was due to the fact that figures
furnished to the Department by that
company were greatly at variance with
those furnished under osthSto the Inter-
state Commerce Commission by the
component companies. who / am in
formed own the plant and equipment
Used in the operation of the Postal
Telegraph Cable Company's land lines.
1.-THE Postal Telegraph Cable Com
psny is composed OF a number Of COM
ponent companies. each OF which makes
returns under oath to the ]. c. c. on
the regular prescribed form. The rec
ords show that for the calendar year
ended December 81. 1916. the total m
veetment In plant and equipment as
reported for the thirty-nine companies
covered by the award amounted TO ss,-
647.4T2. The gross revenues of these
companies Is reported to the 1. c. c.
were for that yeaC 3l2.096,5s6, and the
net income after deducting the operating
expenses and taxes was reported to be
tS32,34s: while on the sworn CUES
,ionnaire furnished 10 the Department
the Postal Telegraph Gable Company
stated their net operating income for
the land lines for this same year (19ls)
TO have been s4.15T.6T0. In their re-
port to the 1. C. C. for 1916 the COM
ponent companies charged s2.1s7, 900 for
depreciation. In the Information fur
rished to the Department the charge
for depreciation during that period was
placed at $427,s03.
an the report OF these component
companies TO the Interstate Commerce
Commission for 1917 the gross revenues
are reported to be s12,s55,42o. and the
net income to be $1l7.264. In the ques-
tionnaire furnished to the Department
by the Postal Telegraph Gable Company
the net income for 1917 Of the land lines
Is stated to be s4.4s5.5s3. The de-
probation charge made in the report to
the Interstate Commerce Commission
FOR 1917 was s2.sso.2oo. while In the In
formation furnished to the Department
for the same period the depreciation
charge was placed at s44S.975.
Hard to Ascertain Values.
THE company stated that they we're
unable to furnish the Department with
any approximate valuation Of their prop
srty. as they we're without knowledge as
10 the amount invested In the plant. The
figures furnished by the company to the
Post ONCE Department showing net
operating income and depreciation
charges were 30 at variance with those
reported TO the Interstate Commerce
Commission that this, coupled with their
inability TO furnish any information as
to the value Of their property made II
impossible for the Postmaster-G General
10 accept their proposal and very DIM
cult to ix the compensation.
The Department therefore proceeded
10 determine as nearly an possible from
the best information available the value
Of the properties and to fix Just COM
pen sation. In doing no the same general
principles were followed with respect to
the valuation OF properties as were EN-
ployed In fixing the contract for the
Western Union Telegraph Company.
The statement contained In Mr.. Mac
hays letter dated November II, 1913.
and which has been made public by him
10 the effect that the compensation to
the Western Union Company is more
Fbuv aH,a s,.,fa. lnW-
10 not based on facts. The compensa-
pany is approximately $2,500.00 less
than its income for that year from the
land lines
The Postal Telegraph Gable Com
pany is the only wire company with
which the Post Office Department has
had any difficulty in coming to an agree.
nlent as to compensation.
Government Invites suit.
1T will be seen. however. that when
the land line companies reported their
net operating revenues for the year 1916
- be S332.343 and for the year 1917 to
~ Sl17.264 the Department could
not yield to their demands that they be
1aid S3,S0O.00O and intdtest as Just
compensation and the4efore awarded
what II believed to be Just compensation
IN view of all tho facts before II and
requested the company to bring a suit In
he Court OF Claims TO establish what
.ompensation II was entitled to and
stated that we would aid them in every
nay possible IN doing So"
orders we're issued by the Postmaster
General to-day consolidating the two
clegraph companies and providing for
gutual arcRntaura OF fmafsaReS 10 go