The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-19
Corporation Counsel Says
Increase Asked Means
35 Per Cent. Advance.
DENIES NEED OF FUNDS
Says Company Has Sufficient
Surplus to Invest in Other
Companies.

/
the Public Service Commission for the
Second District on the petition of the
New York Telephone Company for an
! increase in rates approximating 81 per
cent. Several times during the argu-
ments by John +. O'Brien. Corporation
| Counsel and others they injected re-
marks bitterly criticising the service
given by the company. one Of them,
Edward J. Mcclellan of 2 Rector street
declaring that the company had no
right to appear in a court OF equity"
as 1t had not rendered its contract ser
vice to telephone subscribers.
THE service is abominable.'' cried
! Mrs. II. A. Hicks of 146 East Forty
eighth street.
Yes, indeed" said another woman,
! what license has the telephone COM
pany to come here and ask for higher
rates when the price of sugar has
/ dropped from % and % cents a pound
! to II and ~ cents? 1 ask you that"
/ Mr. O'Brien declared that If the new
| schedule of rates is approved by the
commission 1t will mean that the peo-
Pile of Greater New York will have to
! pay an increase of more than 80 per
cent. over the present rates.
Tired of Making Complaints.
you can't imagine the public indgna-
ton against the telephone company he
/ said you could have 100000 specific
complaints If you wanted them. but the
average citizen believes 1t futility TO
make them If the telephone company
had supplied its subscribers with SIM
,lified explanation of the increase 1t Is
asking for the situation might be diff
| 'erent. Instead it presents an applica-
ton which is an Argonne forest of In
ricacies, while 1t has spent Its money
;or newspaper advertising propaganda,
hoping to get editorial support.
You're making a stump speech. inter
iected a lawyer who IN citizens action
recently forced reduction in local phone
rates.
you'll get more than stump speech
from me before we are done" Mr..
! C'Brien returned. you'll find that the
moor service is the chief complaint
against the company.
Mr. O'Bren said that according to
The estimate of the company subscribers
in New York city would have to pay
annually about S16,000,00O more than at
present in case the new rates are
! allowed.
THE company not only seeks to in
crease it's revenue directly, but by Vari-
Gus changes in its schedule will make
subscribers pay still more than 35 per
cant increase" Mr.. O'Brien charged.
"Eor example, the minimum rate for
business or residence individual line In
| Manhattan will be $3.50 month as
COMPARED with the present rate of $3.OT.
Invests I'm other Companies.
"The telephone company has stated in
| public announcements that II needs ad-
! ditional revenue to pay DIVIDENDS
/ and to enable IL to borrow FUNDS
Yet at the present moment II mas
| invested in the securities OF other
! companies over $110.000,000, Upon
| which 1t is receiving less than per cent.
return. If additional funds are needed
why cannot 1t sell these securities and
| obtain money without imposing this
enormous burden upon subscribers?
"Ftlrthermore, the company has In Its
surplus approximately S43.0OO,OOO and
more than $50, 900, 900 in its depreciation
reserve. Notwithstanding this, IL claims
II should have increased rates SUFFICIENT
TO add s16,o00.000 to its revenue. or
about 10 per cent. on the book value or
its property"
+ I, Swayze, general counsel for the
company, said It was doing business In
New York city at loss and that II
could not secure the plant and equipment
needed to meet the city's huge demands
for service unless its financial condition
Is sound enough to attract new capital.
lie said there were $4,000 telephones In
the city and applications were on file
for SO, 600 new ones. which the company
had neither the plant nor equipment to
meet. He admitted that the service was
not up to standard.
I'VE are short $50 operators" he said.
"a large number are inexperienced and
the traffic load is abnormal"
Mr.. Swayze, testified, that in August.
1919 the company's gross revenue per
sta ton was 1896, and the expenses were
S37S The total gross operating revenue
was 81. S04. 299, he said, and the operating
expenses s3.0s4,3s3, leaving net earnings
of S7l9,9l6. BY August. 1920. he said. the
operating revenues per station had in
creased to H.76. and the expenses to
Sass. The gross operating revenues. he
said were S4.1i0.965, and the operating
expenses $4.215,675, leaving n deficit of
s7i.7lo
without increasing rates the COM
pany can offer no inducement or assur-
ance to attract investors" said Mr..
Swayze, land its plans for extensions
and additions must remain In allegiance
until relief is granted. The necessity
for relief is great and immediate"
A resolution favoring IAN equitable
Increase I'm telephone rates." adopted
by the Public Utilities Committee of
the Merchants Association, was denied
admission to the record on objection
of NJ NJ Fertig, Assistant Corpora
ton Counsel.
The commission will hold It's next
hearing at the Hall of Records at 10