The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1920-11-24
RAISE IN PHONE RATES
BUILD new PLANT HERE
20 Per CENT hike TO COST | MILLION
New Charges in Topeka Go Into
Effect December /.
Industrial Court Granted In
crease Here Today.
JUDGE REED OBJECTS TO IT
Declares This Is No Time for
Such Rate Advance.
Points Out That Company Made
SIOS,OOO in Last Year.


Telephone rates in Topeka were in
, creased substantially 20 per cent to-
day under an order of the court of in
dustrial relations. The new rates are
effective December /.
Friction which has prevailed among
court judges for some months again
came to the surface in deciding the
case. The opinion was held up a week
because of this situation. Judge Clyde
NJ. Reed dissented from the opinion
by Judges w. L. Huggins cnd George
W. Wark. The prevailing opinion de-
clared the Southwestern Bell company
entitled to increased revenues because
of advances in cost of equipment and.
operating expenses. Judge Reed held
the advance was excessive and in con-
flict with public policy.
Business Rate Is SO Per Month.
Increases granted under the new or
der make phone rental advances OF
from 35 cents to 81 a month. The
new business rate is Sc q month as
against IS a month provided by the
Burleson rate order of May, 1919. In
diVidual residence rates are increased
from So to SO. Two party residence
rates are boosted from sails to $3.50
and four party residence rates jumped
from S1.S5 a month to $2.25. Busi
ness extensions are 81 instead of rs
cents under the old rate and residence
cents to rs cents.
Advances are also allowed for rural
service. The old rate of $3.50 for
rural business rates-where equip
ment is owned by the subscriber-are
advanced to s3.50. Rural residence
rates are $2.25 instead of 50.
Increase of 40 Per Cent.
Judges Huggins and Wark hold in
their opinion that the new rates
amount to an increase of 20 per cent.
They state that based on actual cost
OF original plant equipment-hot al
lowing for advances in costs for bet
terments-the new rate will give the
Bell company a return of eight per
cent on its Topeka investment.
In figuring the basis of valuations,
the two judges held that they allowed
7 per cent depreciation. The return
allowed in the Topeka case is held by
the Judges to be consistent with rate
advances for other towns and cities in
this state.
Both opinions quote many figures.
There is clearly a wide division of
opinion as to the valuation fig
ures and returns to the companv dn-
der the new rate While Judges Hug
gins and Wark contend the new rate
VIII earn eight per cent for the COM
pany on its original cost figures. Judge
Reed declares the new rate is equal
to an increase of 1913 per cent. He
says it will bring $65,190 additional
revenue to the company each year.
Officials OF the Southwestern Bell
company declared this afternoon that
the advance would mean only four per
cent on present equipment charges.
Judge Reed Declares 1t Excessive.
Opposition to the rate advance is
declared by Jr Reed to be excess
siye and in opposition to public policy.
He quoted figures by engineers TO
show that after allowances for operat-
ing expenses the gross revenues of
$364, ,642.l9 a year would leave the
company $10S.277-2l available for in
teIest and depreciation.
That the country has entered upon
a period of deflation must be recog-
nized by an he said. "In this period
OF descending prices of commodities
public utility rates viii not go down
except as adjusted by public service
regulatory bodies. Therefore, it is
fair presumption that the downward
trend of operating costs with rates
remaining stationary, will afford an
offset to the period when the operat-
ing costs increased more rapidly than
public utility rates"
The prevailing opinion emphasizes
the fact that the increase in one party
residence rates for Topeka is the first
granted for this class of service in
eighteen years. Not since 1902, the
opinion recites. have these rates been
advanced. Officials for the South
western Bell also urged today that
they had no increase in business rates
from 1902 until 1919 and that two
party residence rates had not been
increased in six years. Four-party
residence rates remained stationary
during period of eight years, they
declared.
To Earn light Per Cent.
While an increase of 40 per cent Is
allowed in existing rates, the Higgins
Wark opinion points to the fact that
recent advances in telephone equip
ment and operating costs have
amounted to 100 per cent. Based on
original costs, tho, the company will
earn per cent net under the new
rates. it is declared. The opinions
were filed with Carl Moore, clerk Of
the court, this afternoon
The new rate schedules will be
placed In effect December l and will
affect all of the 10000 telephone
patrons in Topeka.
Statewide effect may be expected
from the Topeka decision, Judge Reed
stated this afternoon. He said that
the local case established a precedent
upon which rate orders may be based
IN pending cases, A number of local
rate cases are now before the court