The news scimitar. (Memphis, Tenn.) 1907-1926, 1919-08-27
State Can Change Rates.

Under the new state public utilities
act, the sole and final rate-making
ppmer Y vested Y ths sssse tSs ,esnSnss
company in the present city contract
= appeared for the street railway cnmpany
in A1se courts and secured decision
thavahe act was constitutional, even
though II went to the point of abrogat-
ing solemn contract for scent fares.
Hence the present telephone contract
is valid as to rates only In so, far as 1t
obligateS the present city government
TO consent to those rates, A new gov
eminent could, with as perfect propriety
as the street railway company showed,
go at any time before the state commits
sion and ask for a reduction.
There is a clause, directing that the
Cumberland company snail proceed at
once to improve the local service, as
soon as material and equipment for
that purpose can be secured, and speci.
Memphis Telephone company shall be
acquired, total OF approximately
$750,000 shall be expended in the par
chase and for the proposed new equip
ment needed td improve the service. If
the negotiations with the Memphis
berand company is to spend not less
than $250,000 in making such improve
ments.
There is clause at the end Of the
contract, directing that commission
OF three members shall be appointed by
the mayor, "to confer with officers of
said company, to from time to time in
vestigate what action Is taken by said
company to comply with its said obli-
cations herein set out, to report from
time to time during the term covered
by these resolutions upon the efficiency
Of the telephone service and to make
recommendations to the commission in
the premises"
dRhe contract becomes binding upon
the Cumberland company and the city
as soon as it is accepted in writing
by proper officials Of the company.
The ordinance permitting the pur-
chase and consolidation of the two
companies was passed at the same
meeting, and reference is made to that
fact In the contract resolution Sub
scribers to the Memphis service, now
abandoned, may have Cumberland
phones Installed without extra charge,
by making application within 30 days
after they are notified that the Cum
berland Is prepared to give them serv-
ice over its lines.
The consolidation is to be carried
out when permission has also been OBJ
tained from the state utilities commits
sion and the attorney general Of the
United States.
Valuable Property Acquired.
BY acquiring the plant of the Mem
phis company. the Cumberland system
secures splendidly constructed con-
duit system, with capacity OF 1000
lines That conduit system alone cost
the Memphis company approximately
S400 900 so Harvey Myers, president OF
the company, stated Tuesday afternoon
1t would cost more than twice that sum
to reconstruct it now, he estimated. The
company also has wires, poles ard other
equipment which can be utilized almost
at once by the Cumberland company
which also will employ such of the Al
operators and S5 other employees Of the
Memphis company as care to enter Its
service, thus securing additional trained
operators and expert workmen who are
needed
The exact terrss of the sale Of the
Memphis company to tue Calnbo rGAly
have not been made public. but Mr.
Myers said at a commission meeting
when the matter was discussed. that his
stockholders would get nothing and the
hondholders would be paid little more
han so cents on the dollar. That woulc
mean that the plant Is TO be taken ovel
at slightly more than 100000. The re.
mafnder of the sum to be expended b,
the Cumberland will be in new equip
ment and in the transfer Of the physica
properties Of the Memphis company t.
its own system. 1t has been stated thai
VI may be so days before the Cumber.
land company VIII be prepared to TAXI
care Of the subscribers to the Memphi.
company, of whom there were abou
$500 Nearly 1000 were also sub
scribers to the Cumberland.
There was no chance for anyone Il
protest before the city commission
against the contract. for it was com
pieted at a conference between tn,
city authorities and phone magnates a
recess in the commission meeting anC
then railroaded through