The Idaho Republican. [volume] (Blackfoot, Idaho) 1904-1932, 1918-10-11
Basis Of Compensation
Arrived at Between
Telephone System and
Post Master General.

1
Post Master General.
Theodore N. Vail, president of the
American telephone and telegraph
company, gave out the following
statement on the basis of compensa.
tion arrived at between the bell sys-
tenn and the post master general:
Basise of Compensation
After extended conference between
the representatives Of the post mas
ter general and the bell system cover
ing that there might be no misunder-
standing, painstaking and exhaustive
discussion and frank exchange of
views, what constitutes just COM
pensatatiOn for the supervision, pos
session, control and operation of the
bell system taken over under the pro-
clamation of the president OF the
United States, has been agreed upon.
The representatives of the bell sys-
tenn turnout the negotiations found
nothing but helpfulness. Asking no
more than they thought ought to be
paid, and for the protection of the
property to doaall that ought to be
done and all that has been done in
the past. In taking over the property
the postmaster general also desires
to give continuity to the service and
as far as consistency with govern
ment operation to the personal which
has brought the property to it's pre-
sent degree Of efficiency.
From the first exchange of views
unit 1.-The close, the bell representa-
tives were met by the postmaster
general and his representatives in
a spirit Of absolute fairness and with
an earnest desire to provide the SER
vice to the public and preserve the
property for the proprietors as well
as to give them established returns
on their security. The principals
adopted as a basis of compensation
were:,I,
First, any compensation fixed for
the control was to be considered as
compensation for an emergency
period and not in any way considered
as establishing value for the pro-
perty.
Second, the operation Of the pro-
perty is to be continued on basis of
efficiency relatively equal to that Of
the past.
Third, the property is to be fully
maintained so as to be turned back
to the company as good as when re-
ceiyed.
Fourth, appropriation from cur
rent revenue for maintenance depre-
citation, and obsolescence to be the
same as the past-an average Of 5.72
per cent on the fixed capital-amort-
ization Of intangible capital to be
relatively equal to the past. All un-
expended balances from both to be
invested in the plant of the system.
Charges against the depreciation re-
serve to be, in accordance with the
rules of the Interstate commerce
commission. @
Fifth, employees pension, disability
benefits and death benefits now in
operation to be continued.
Sixth, all taxes, municipal state
or federal, to be paid or reimbursed
If paid by the companies by the gov
eminent.
Seventh, the license and rental
contracts between the American tele-
phone and telegraph company and
the license companies to be continued
and the American telephone and tele-
graph company is to give such adj
wise and assistance as the post master
general may require, is to maintain
its scientific technical and engineer
ing departments, its patient protec-
tion for the benefit OF the property
in the same manner as heretofore.
The postmaster general 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 pro-
lection Of the property, the service
and the art, and provide for the con-
tinuation of the service and for the
continual development Of the art, as
well as the protection Of the
development situation, and are
for the full protection of the
developed situation, and are for the
full protection Of the public in it's
service and the proprietors in the
property and development.
For the security holders Is pro-
vided:
A. Payment of the interest and
existing amortization charges on all
outstanding securities or obligations
OF the bell system in the hands of the
public, including the per cent con-
vertable bonds issued August 1, -918.
B. Payment of dividends at the
existing rate upon the share capital
OF the bell system out standing In the