The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-11-09
TELEPHONE FINANCE
BEFORE COMMISSION
Four and a Half Per Cent. of
Revenue Goes in Rent to
A. T. and T. Co.

-Four and a half per cent OF the
revenue of the New York Telephone
Company goes to the American Tele-
phone and Telegraph Company, the
parent organization, in the form OF
rental for the patents and other rights
which the latter corporation controls.
That was bought out yesterday at a
continuation of the hearing on the APP
plicatlon by the N~w York Telephone
Company for PERMISSION to increase its
rates in the greater city by approx
mately 35 per cent.
After H. A. TraX, chief accountant for
the telephone corporation, had testified
that the parent company owned 100 per
cent. Of the stock Of the New York Tele-
phone Company, 1t was suggested by
NJ. III. Winlkler one of the attorneys OPP
posing the rate increase, that the pay
ment of the four and half per cent.
was merely taking the money from one
pocket and putting it into another
THAT is obvious" commented Charies
Il. Hill, chairman of the Public Service
Commission for the Second District, be-
fore which the hearing took place.
Deficit Questioned.
"rhen." said Mr.. winkler, eff it hadn't
been for this y per cent. which the New
York Telephone Company has TO pay
there wouldn't have been any deficit OF
$1,000 for August, would there? AS a
matter Of fact. you are not losing money
at ALL are your"
THAT doesn't follow" interjected John
l.. Swazey, general counsel for the COM
pany.
Other expenditures by the company
which Mr. Winkler and M. NJ. Fertig. AS
sistant Corporation Counsel who is op-
posing the increase in rates in behat
OF the city, declared ought not to be paid
for by the public include about 100000
a year expended in social welfare work
and S129.537 which A. D. Welsh of the
company's commercial department tesu-
fed had been expended between August
rs and October 81 last In advertising and
propaganda in favor of higher charges.
Mr.. Welsh said that S103,96S of this sum
hal been spent in newspaper advertising
and the balance in circulars and other
forms of publicity Mr.. Trax told the
commission that the upkeep of the lunch
ana rest rooms for employees had caused
a deficit of $4,000 In August
1t was estimated by G.. w. Whittemore,
the New York Telephone Company's
valuation engineer, that the city would
have 100000 telephones in use by the
end of 1921 He said there were $4,000
here at present. The company added
more than $4,000. 900 to its physical
property between January l, 1915, and
December 81, 1919 according to Mr..
Whittemore. During that time the num-
Der of telephone stations increased from
562,551 TO $4,000. gain of so per
cent, he said
Estimates Expenses MT S26,5OO,OOO
Mr. Whittemore gave s13,396.000 as
he sum spent by the company for addi-
lions to itSplant between January and
August 81 last. Estimated expenditures
for the same purpose during the re-
nainder of 1920 amount to about S10.-
100000 more, giving net total of
S23, 400. 900 and a gross total of $26,500,-
90 for the year. Because of tie dimin-
ished purchasing power of the dollar,
Mr.. Whittemore said. this sum would
purchase only about the same amount
of material as could be obtained for
'$13. 100000 in 1915.
The company desires to spend S4S. 600.-
400 on its centre system next year, so
Mr.. Whittemore said, S33, 900 Of this
amount to be used for new facilities for
New York city. He said it was eX-
pected that the company would have
% 900 pending applications for new tele-
phones by the end of the year and be
able to install only about s5,00c in 1921
Hecklers enlivened the hearing with
frequent Interruptions. i. w. Sandback
Of the Edison Lamp Service, Inc. East
Thirteenth street, told of having called
Aimscf by one trunk line to receive the
amazing reply from central that another
line on his own desk was busy" when
no one but himself could possibly be on
At. The next hearing will be at q o'clock
November Is.