New-York tribune., 1919-03-31
Postmaster General Agreed
10 S3O,775,OOO Increase
Before Fixing Bell Award,
Says ''Postal Telegraph
Deficit Was Foreshadowed
Estimate OF Profit i'm 1919
= Said TO Have Been Based
on Additional Revenues

Charges that Postmaster General
Burleson has committed himself to
ss0,775, 900 increase in telephone rates
are made to-day in "The Postal Tele
graph" published by the Postal Tele-
craph and Cable Company. The article
charges the Postmaster General was
committed to this increase before he
arrived at the compensation to be paid
the American Telegraph and Telephone
~-fBelD Company for Federal operation
of its lines.
+. "The Bell company" the article
states. "by its arrangement with the
Postmaster General, has been or will
; sbe able to increase its revenues by $780,
100000 at the expense of the taxpayers
Z and telephone subscribers Of the United
: States"
Estimate Foreshadowed Deficit
In analyzing the recently published
annual report of the Bell company the
article says, in part:
e "The outstanding and sensational
feature of that report for the year 1913
5 is the publication therein of an esti-
, mate of the net revenue to the govern
ment from the company's properties All
q gust 1 to December 81, 1918. That es-
innate was apparently prepared by the
Bell company and presented to the
.Postoffice Compensation Committee
prior to the fixing of the Bell compen-
asation. 1t shows that the net result of
g Mr. Burleson's operation of the Bell
lines, from the time of the taking over
) Of those lines on August 1 until De-
cember 81, 1913, would result in a def
.ssclt to the government of $3,s42,300
The compensation finally arrived at
would reduce this estimate to s1.saA-
us.
lhen there is an estimate presented
py the Bell company to the compen-
satlon committee, before compensation
was arrived at, showing the net reve-
nues, TO the government from the Bell
gephone properties from January 1
1919, to December 81, 1919. showing an
essimated profit to the government Of
3niZ,aI!,5o0 q; from the operations of the
!, BELL lines during the year 1919. This
sstlmate was conditional on the gov
eminent Increasing the telephone rates
by S30,775, ,OOO."
~ Committed to Increase
study Of estimates appearing in the
e oeil report OF the result OF governmen Mt
operation of the Bell system. made bv
Aep,esentatlves of the Postmaster Cen
srai ana handed Bell officials Septem-
esper o, 1918, is cited as showing that tho
income account prepared bv the cow, NV
pany was based on the assumption of
S30, 100000 increase. '''O" -
The article continues:
:. Hence, it will be seen tha+ uh;1.
E ar. Burleson was publicly declarino
= nat ne was going to decrease rates
ana that while he publicly announced
on M december 13 new schedule ~
Ieiephone rates, which he stated were .
iieduction, he had already comritted
himself to a policy of increased ratos
.or the Bell Telephone Company. which
was 10 net during the year 1919 the
sum OF $30,775,000. and he was so com
E thitted before he arrived at the com
& pen5ation aSa with the Bell Telephone.
2 heh postmaster General Burleson
niso very generously awarded to tbn
''seli Company, in addition to tho ver,, erv
'sanosome ,rsio compensation Of Ss5.24s.saI
Thicn ne gave them, Az per cent ~
me gross receipts of all the subsidiapv ~
,sempanies throughout the united
"a ISa.es, winch amounts to SIG, ,ooO, 900.
So 80 m " per cent has been taken bv
s;s,,, ;le oell company in the past osten,
-r,snts s,y 1oa ene use OF telephone instru-
r,~snes' engineering services, etc. hut
: sarlous public service comm;s.;.. Ge... Dut
ler analysis, have hI,oa'' charactar;noa' AZ
arrangement as a 'rake-off' 'Ieo ~ % .nls
70 keep. down the profits % ~. 1roer
companies and thus still demanag ,ne iocal