Great Falls tribune. [volume] (Great Falls, Mont.) 1921-current, 1921-08-26
DOUBLE OLD TAX
UPON PHONE CD,
URCEDONSTATE
Lewis and Clark AS
SCISSOR Asks Equalizers
for $4,000, ,000asB Basis
Uses Mountain States
Figures; Attacks It's
Bookkeeping Forms.

Helena, Aug. 25.-The board of
equalization Thursday at second
hearing took up the assessment of the
Mountain States Telephone and Tele-
graph company, but no conclusion as
to the value to be placed ON the cor
poration had been reached when ad-
journment was taken.
c. II. Martien, county assessor for
Lewis and Clark county, appeared be-
fore the board to urge that the assess
ment of the company be increased.
The eompany's property in Montana
was assessed last year at S4,346,121.
Martien asked that the company be
Attorney NJ s. Gum of Helena, ap-
peared for the company.
Given Chance to RepIy.
Governor Dixon, as chairman of the
board, continued the hearing until next
week, to give the company time to
produce additional figures. There
will be no further meeting of the
board until next Tuesday.
Mr.. Martien attacked the figures of
the company and the bookkeeping
methods, contending that the earnings
in this state by the company were a
fair return on an investment of S.
100000 and that the actual earnings
of the company show this fact In
addressing the board Mr.. Martien said
in part:
THE report shows that the COM
pany has a capital investment of SS.-
S1O,9S9S4 in Montana. upon which
the company asks a fair return, an
amount of S6S4, 4,417.15, or a rate of
III per cent on the invested capital.
Net Earnings S479,368.
"An analysis of the income state
ment shows the net income for 1920
to be $479. .36S93 after making all pos
sible deductions for overhead expense,
operating expense. maintenance, etc.
In addition to the expenses named, the
company has made deduction for
the amount of S66. 9S and an
amount for amortization of intangible
capital and right of way, of S5S, 731 IS.
Now. while the last named amounts
are theoretically charges against rev.
enue. the operation as the items are
handled. is merely to take these
and transfer them from the
revenue account and set them up as
individual accounts, which in reality
has not affected the net rev.
enue in any way, but has taken these
out of one pocket and put
them in another, for, how could these
funds be created if the revenue had
not accured from the earnings in ex-
cess of expenses. / call the boards
particular attention to these items,
which are paramount factors in deter !
mining the value for assessment pur-
poses. +
Deductions Mere Bookkeeping.
THE company has also deducted j
from its earnings S4O2.812.15 deprecia-
tion on plant and equipment for 1920
and placed this amount ink" Depre
citation Reserve account.
Taking the net amount of earn
ngs as shown on the report, S479.- /
56s.93; adding depreciation reserve,
02.912.15: and amortization reserve,
SOS. 1876; makes total of S941,- |
)12. 73: which is the actual earnings of /
the company for the year 1920 and
which amount is equivalent to rate
IF interest of per cent on an invest |
nent of $11, 10000 or 8 1-3 per
,ent on an investment of $S, /
s1O,OOOOO the amount the company
claims as its invested capital in Mon
ANA.
''In his recent remarks, Mr.. Spauld-
ng, representing the company, made
he statement that the property of the
company had been returned for as
lessment purposes at approximately 66
yer cent of the actual and full cash
,alue. The board, being cognizant of
his fact alone, fail to see how this
board can reach but one con-
.lusion, namely: that the property of
he Mountain States Telephone and
Telegraph company should be assessed
" this board at valuation Of not less
han $S,OO0,O0O.
Dodging, He Charges.
"From the report of the tax and
icense commission, 1917-191S, of which
senator G. r. Leonard. of Butte, was
hartman, to the state board OF equal
zation. relative to public utilities,
axe the following: Some utilities in
he state in our Judgment have paid
heir share Of the taxes, while others
ave not. It is my firm belief that
'hen they were considering this mat
er they had in mind the Mountain
states Telephone and Telegraph
ompany as being of the utilities that
1ere not bearing their share Of lthe
nr1nu IN Mnrkana |