The labor world. [volume] (Duluth, Minn.) 1896-current, 1921-01-22
BETTER SERVICE
Then COME BACK
. FOR MORE MONEY
Railroad and Warehouse CON-
mission S|dsheS Millions from
Phone Companies Claim.

Drastic reductions, cutting $2,5OO,OOO
from the $4.4S9.000 increase In rates
demanded by the Northwestern Tele-
phone Exchange company and the
rr1-State Telephone and Telegraph
company, already have been made by
the Minnesota railroad and warehouse
commission in working toward Its
final decision. it was reported TINS
week. and there Is a strong pehe1
at the capitol that the commissions
ultimate ruling is likely to deny any
increase at all.
Conpilations Of engineers reports
and figures, completed by the COM
smission include opinions that while
tho valuations made by the companies
themselves and the earnings in recent
wears are not excessive, several claims
have been made in the demand TOR
higher rates which cannot be counte-
nanced by the state.
Board May Find.
Informal statements coming from
the experts working in the tnvestlga-
t1on of the Increased demand 1ndi-
cate that the commissions findings
may be along this line:
Service must be improved before
any sweeping increases in rates will be
allowed.
The Northwestern company has in
cluded in it's request for higher rates,
$360,O0O for taxes it would have TO
pay on it's increased revenue.
Both companies have included IN
their plant valuation estimates the
reproducuo ncost of property pur-
chased from each other. and which
the enginee ers hold must be valued at
actual worth. and not cost Of repro
duction at higher prices.
The Northwestern company, while
showing theoretical deficit in oper-
alton, by using figures based on high
expenses ir October, 1920, actually
shows an annual net revenue OF
100000.
The Tri-State company actually has
q net return annually amounting to
$250,O00, to be deducted from it's pro-
posed increase.
The request Of the Northwestern
company is based on cost Of operation
under inefficient service last year,
rather than on the smaller number
OF employees required when its staff
regains efficiency equal to 1917 stand
ards of service.
Return Asked Called Too High.
Another element that will affect the
fina1 result is the companies request
for return Of 10 per cent on the val
uations they presented: While the
commission has never fixed definitely
a rate of return for telephone prop:
trey. it's orders in the past have been
based an a. maximum return Of per
cent and sometimes as low as per
cent.
$2,e00,0OO Valuation Cut Seen.
Another prospective cut in the raise
asked by the Northwestern Telephone
Exchange company is in the allowance
for depreciation Of its equipment.
While the company's engineers have
figured depreciation at IL per cent,
indications are that the commission
will use. the depreciation fund built
up by the company as the basis for
it's estimate of actual depreciation.
This fund, the exhibits show, amount
to II per cent of the cost of the prop
erty. and would take another substan-
&ial slice off the rate increase asked.
While the weight that will be given
by the commission to the various
items enumerated as possible spots Tor
elash1ng is not known, the opinion Is
expressed about the capitol that the
following reductions are almost Ger"
tain;
From Northwestern reproduction
valuation on property bought from
the Tri-State company-$1,500.0
From Tri-State reproduction valua-
ton on property bought from North
western-$1, 10000.
From federal income taxes claimed
by the company as a legitimate ad.
dition to increased return-$147,2OO
From Northwestern company's es'