Evening star., 1920-05-06
telephone PROFIT
.. ABOUT 1PER CENT,
COMMISSION TOLD
Officials Say Earnings Would
Be $152,523 for
the Year.

TeStlmOny 10 SNOW tHdt IL Is ediAiH
,nly a fraction more than 1 per cent
on the fair value Of its property was
presented by the Chesapeake and Po-
tomac Telephone Company when II
appeared before the Public Utilities
Commission today to ask for higher
rates.
The testimony disclosed that ii
earnings during the seven months
since government control ended con-
tinue for twelve months. the COM
pany's net revenue would be $1b2'b25
This amount Of net revenue Is barely
more than / per cent return on the
book value of the company's property
Salaries and Expenses Higher.
within the past few months" reads
the company's statement. "in order to
meet the living necessities Of it's EN- :
ployes, as we'll as to obtain and hold
sufficient amount of trained labor TO
render satisfactory service, very SUD-
stantial increases in salaries ana
wages have been made, so that the op-
Grating expenses are very certain to
exceed the twelve months figure estf-
mated. and unless additional revenue
is obtained an operating deficit seems
sure to result"
The present rates Of the company
are: Individual line. unlimited resi-
dence service. IS a month: extension
telephones in a residence. so cents a
month: two-party line, residence.
thirty-fve messages a month. $2.25.
and cents for all additional calls: indi-
vidual line. business or residence. fifty
calls a month. $3.50: two-party line.
business. forty calls month. $3.50.
and cents for all additional calls.
I The rates which the company seeks
vidual line, unlimited residence serv-
ice, $3.50 a month: extension tele-
phones. Is cents a month: two-party
line. rosidence. thirty-five calls a
month. $3.50. with no Increase in the
5-oent charge for additional messages:
fifty calls q month. 81; two-party line:
business, forty calls . month, So. and
S cents for additional calls.
Graduated scale Charges.
On the iiNitea service telephones
there Is 4 graduated scale of rates
for all calls after the fifty that are
allowed for $780,, This scale starts
fifty and goes down half a cent for
each fifty.
In it's application the company asks
that this scale be raised one cent for
each fifty calls, 80 that the first ad-
dittonal fifty would cost 81 cents:
branch exchange service also is
asked.
Only few representatives of civic
organizations were present at the
opening session today. William Nc
GRAFTON Of citisenS Associations and
A. E. Seymour for the Chamber of
Commerce. s,s%sessssss@-sssa4.-.ss
The morning session was taken UP
with the testimony of II. C. Gretz.
chief accountant of the company. 70
substantiate the statements made In
the petition as to the financial condi.
tion Of the company.
Describes Increase in Value.
Mr.. Gretz described in detail how
the fair value Of the company's
property advanced from approximate
" Sc, 600. .000 as fixed by the commits
sion in 1916. to $l2,60o.0o0 at the end
of 1919.
The company claims Tat the book
value of it's property now is $4,000
600. but since the rate OF return Is
based on fair value. the company ex-
planned that 1t has deducted from the
$4,000 900 all items spent for prop
erty or equipment not now usefui In
rendering service.
These deductions amount. to 1885,
900. leaving a fair value for rate
making purposes of Sl2.600.O0o.
Among the items deducted is the cost
by the company for the housing of
"ut-of-town operators brought here
during the war.
New Rates Would Add e6O5,OO0.
The increased rates asked for by
the company will net s605.000 more a
year. which will equal a return of
"a. per cent on its fair value of
$12.600.000.
The company contends that this is
a modest request in view of the fact
that some commissions have held that
telephone companies are entitled to
an 8 per cent return.
To earn an per cent return the
company would have to add about a
million dollars a year to its revenues
or practically double the increases it
is seeking.
The company will present evidence
10 show that since 1916 wages have
gone up IS per cent and since 1914
there has been an advance OF 80 per
cent in the cost Of materials used by
Tho company