The herald., 1921-04-07

,.ny was apprO'e'
- Detroit VS.. Railroad Commission
n,t tne Telephone Company, decided APril H.
snd o ,S" snpreme Court OF the otate Ii pirSad
NOTES with appro Hsiaan e concerning similar con-
Commission, I Oh
rae, as follows:
American Telephone and Telegraph Con-
lhe M large corporation, financed oy the
pany, l'set &c own securities and occupying the
issuance o. position to telephone companies Oh
same ntber states is able with practlca9iuts "
severe 0es MAINTAIN extensive benS
where eSS;aned to produce improvements ana
nsde, :os IN the service 1t employs engineers,
eUrtsns auditors and others whose % an,
haref;cal to telephone companies whose EN-
highly oene nnId he impossible to any OF these
p!.w.Sossted companies individually
-, 70 anv individual company of maintain
Inc 20 NJ skilled assistants of like character
ing Sc, s would he prohibitive; yet under thls
and spyt the Michigan State Telephone Com
a1sns NV has the benefit OF all these men 20
pany nU IN the way of improvements, refine
or proou Economies in telephone facilities, service
menus Of operation. True, the results Oh the
OF Inventions and experiments OF these men, once
thew are achieved may be given 70 many my does not
me value of them to any of the associated
companies
uu. Michigan State Telephone Company's securi-
LUG taLsn and handled by the American
nes.,Sons and Telegraph Company at uniformly low
.tsrest rates and without large discounts: Inns
ssrvice is one the value ana Importance VI "Hi1A
n IA impossible to calculate.
aTbe effect of this arrangement is tnat the
c.,s COMPANY is given the benefit OF the services
n the most efficient engineers accountants tao
,sr natent lawyers, and others possible TO secure:
1r no furnished with certain standard parts OF
n ~ teephone sets, which are kept IN repair 1or
ham They are aided in their financial matters
extensively.
~rhose are services which the Company needs
which are useful to It, nsuring to the pene1I OF us
nstrons, which If they could otherwise De had at
n cartsnlv would not be obtained at any less cost
Asn under their contract with the American Iele-
rhone and Telegraph Company. 1t is apparent that
Es contract should receive the approval OF the
cnmmisson - Z" It follows, in the opinion OF
ss Commission. that unless the contracts, between
Ms Michigan State Telephone Company and the
American Telephone and Telegraph Company, under
which certain facilities are furnished and certain
engineering accounting and other services are rem
dsred 10 the Michigan State Telephone Company,
and between the Michigan State Telephone Company
and the Western Electric Company, under wnicn
the appcant company purchases certain OF It's sup
plies and materials, amount to fraud upon the
publjc by reason Of the price paid by the Michigan
State Telephone Company being excessive, then the
disbursement of the Michigan state Leepnone
Company in pursuance of these contracts, must
be considered legitimate and proper charges upon
its revenues. twas made to appear upon the
hearing before the Commission by Mr. buren that
the prices and terms at which the Western Electric
Company furnished property and facilities TO tine
Michigan State Telephone Company were very raw
orabe that the facilities furnished by the Western
Electric Company were good standard, the woric
over and furnished an excellent basis for fixing
unit prices
In every case that has so far been decided by
| Commissions and courts in all sections If the
United States, the four and half per cent con-
haet which exists between the so-called BELL Com
nnies," well many independent telephone com
Anies and the American Telephone and Ielegrap.
Company, has been approved, either wholly or WITH
sight notifications
Great stress was laid in the argument on thu
commissions paid by the American Telephone ant
Telegraph Company to the Cumberland Compan!
On toll messages handled partly over the lines o
Tie American Telephone and Telegraph Company
The commissions paid are in addition to pro rate
received by the Cumberland Company of two mill
per mile per minute for the mileage used oy IN
Cumberland Company's lines. These commission
cover the cost Of making the connection on eau
originating at stations of the Cumberland Compan!
y the Cumberland Company owned the entire lin
would receive only the rate for the toll messag
Ior the distance handled, which would be approx
natey two mills per mile per minute. lnasmuc
. It receives something in addition to its usua
earge, 1t cannot be said that the payment OF tf
Wmmlssions are In any way detrimental to the Gun
bEiand Companys Louisiana business or the use'
m service. Its revenues are greater by use
me American Telephone and Telegraph Company
lines for part of the distance than if it used !
wa lines for the entire distance This entire su
Mf y fully discussed in the testimony of Accom-
- mi Wolff, well as in the testimony OF M
ncney, an officer Of the company. The America
Nsphone and Telegraph Company operates on
MenV-nine miles of toll lines in Louisiana. v
Ma no error in former conclusion that Il
Muact with the American Telephone and Tel
u,pn Company is, under the present circumstanc
@a conditions, beneficial to the Cumberland Tel
a pa@s and Telegraph Company and Of advanta
"me users Of its services in the State of Louisian
~ TO the contract with the Western Elect
s&S4pany, there Is contradiction in any of I
N0saee VI the outstanding fact, that by reason
~ contract the Cumberland Telephone and Te
1871 company is able to make great savings on
~ ssflas and supplies which it purchases throu
:. company and uses In furnishing telepho
sHe IN the State of louisiana True, the ct
49, criticised; but there is no dispute Of
Ess% iact that this contract enables the Cumb
- telephone and Telegraph Company to actua
Heasse ito supplies and materials cheaper tn
@ be purchased in the competitive marke
nom by the evidence that the Cumberls
oene and Telegraph Company is at Gbel
y.Saase its supplies in the open market VIII
NE prices are lower than those for VIII