New-York tribune., 1918-10-07
T. N. Vail Announces the
Terms Under Which, Burle-
son Will Operate System
Measures Taken to
Protect the Public
Property To Be Turned
Back After War "As Good
as When Received"

IhoOuore y. ali, pieslneHt o. Inc
American Telephone and Telegraph
Company, last night announced the
terms under which the Postmaster
General will operate the Bell system
for the duration of the war. After
protracted conferences betweoN rep
resentatives of the government and
OF the Bell system. substantial agree
ment has been reached on all essen
tias. The main points Of the agiee-
lnent follow:
Payment of dividends on the capital
stock outstanding at the existing rata
s per cent.
Payment OF interest and existing
amortization charges on all outstand-
ing securities or obligations OF the
Bell system in the hands OF the pub
lie, including the per cent con
yertible bonds issued August !. 1918.
The compensation which is 70 uc
fixed for the period OF control IS 10
be regar led as compensation for al
emergency period and not in any way
considered as establishing a value fof
the property
Property To Be Turned Back
The property is TO be turned bacs
20 the company "as good as when
received"
Employees pensions now in operation
and all taxes TO be paid b. the goy.
ernment.
In discussing the terms of ths
agreement in statement issued to
the press. Mr.. Vail asked the general
public for Indulgence If wartime
conditions slightly impair the service
Of the Bell system. THE public" he
said. SHOULD bear in mind that W.
are in the midst of very abnormal
times Scarcity of labor, high costs
of living and great increases in de-
mands on the service, which are con
gested and not very we'll distributed.
will create conditions which ii Will
be difficult for the telephone system
to meet, no matter how much charges
and wages are increased. and some
consideration must be given before
criticism is INDUCED in"
Regarding the attitude of the Post
master General in the negotiations for
a contract. Mr. Vail pointed cut: 9TH.
whole basis Of the negotiations on both
sides vas to ask no more than wa
right. to grant all that was right and
to protect great property and a grea'
service to the public in every possible
way"
To neep Old Personnel
The representative of the Bell sys-
tenn throughout the negotiations found
nothing but helpfulncss. asking no more
than they thought ought to be paid b.
the government. They found an intent
and desire TO pay all that ought to be
paid, and for the protection of the
property to do all that ought to be done
and all that has been done in the past
In taking over the property tic Post
master General also desires TO give con
tlnuity to the service and. rs far as
consistent with government operation.
to the personnel which has brough the
property to its present degree Of ef-
t.ciency
"The principles (besides those a.
ready stated adopted as basis o.
compensation were:
"The operation Of the property is TO
be continued on basis OF efficiency
relatively equal to that of the past
appropriation from current reve-
nue. 1or maintenance, depreciation and
obsolescence TO be the same as lie
past-an average Of ga Per cent or
the tNed capital amortization o. in
tang Bic capital to be relatively eaual
TO int Fast. All uneyponded balances
from both to be invested in the plan.
OF the system. Charges against me
cepreclation reserve to be in accord
ance with the rules o. the interstate
Commerce Commission.
The license and rental contracts
between the American Telephone and
Telegraph Company and tho licensse
companies to De continued. and tie
american Telephone and Telegraph
company is to give such advice and
assistance as the Postmaster Gene~ai
may require. is TO maintain its sccn-
tlilc, technical and engineering depart
ments. Its patent protection for the
benefit OF the property in the same
manner as heretofore. The Postmas-
ter General 20 have the benefit during
the period of control. in the operation
or the wire system, of all inventions.
discoveries and ideas. which NAV now
or hereafter be controlled by the Bell
system.
Public to Be Protected
These provisions are for the protcc
ton Of the property. the service and
the art, and to provide for the con-
tiAualon OF the service and for the
continual development Of the art. as
Wen as the protection of the developed
SITUATION, and are for the full protec-
t,on OF the public in its service and
development.
vided:
Payment of any charges, interest,
dividends or other costs on new securi-
ties or share capital issued in dis
charge, conversion or renewal or eX-
tension of present obligations.
For extensions to property:
AS provided above, unexpended de-
probation shall be invested in property
OF the system
American Telephone and Telegraph
Company surplus shall be invested in
Its property.
Surplus profits from operation may
be invested by the Postmaster Gen
eral
"If securities or capital can be issued
at fair terms the Bell system VIII issue
its securities. if desired. but THE nomi-
nal value of the securities shal, not
exceed so per cent of the amount ex-
pended IN the property.
Extensions to its property made
with the approval of the Bell system
BY money furnished by the Postmaster
General shall be paid for in install
ments of per cent per annum after
the period Of control ceases.
Extensions by the Postmaster Gen.
eral TO meet abnormal conditions and
made without the approval of lhe sys-
tom shall be appraised by the Inter
state Commerce Commission AT the end