The herald., 1921-03-10

On September %. 1920, the Cumberland Tere-
phone & Telegraph Company filed with the Com
mission application for an advance in telephone
exchange rates at various exchanges in OK
Louisiana amounting in the aggregate to approx
mately 20 per cent over the rates for exchange
service then in effect.
The application was first assigned for hearing
at Baton Rouge, louisiana on October 10, lsZo;
at which time several parties appeared and filed
protests against the proposed rates, and urged an
extension of time.
Feeling that the proposed rates had not been
fully explained and understood, the Commission.
on its own motion continued the case, and required
the applicant to print the rates proposed Tor every
exchange in the state and furnish five hundred
copies to the Commission. The order was computed
with, the pamphlets containing the proposed rates
thereupon furnished by the Commission to
every municipality where exchanges were located.
and to all parties to the proceeding.
The case then assigned for further hear
ing at Baton Rouge December Is, 16 and II,
1920, when exhaustive presentation of the case
was made by the company and at which time pro.
tests received from various sources against
any advances in telephone rates. The case was
taken under advisement, but before a decision was
reached. the Commission Council of the City OF New
Orleans filed application to reopen the case, IN
order to introduce the evidence of expert ac-
countants who il alleged had made study
of the company's books, and prepared certain data
therefrom, well other statistics, considered
by such expert be of value in aiding the Commis-
sion to arrive at proper determination OF the case
The case accordingly reopened and further
and 26, 1921.
Counsel for the City of New Orleans moved for
a continuance of the case at the beginning OF the
hearing, on February "a, which was denied. The
Commission believes that all parties have had ample
opportunity in the four months that have elapsed
since the first assignment of the case in October,
1920, to prepare and present all facts which were
pertinent to the case. After hearing the evidence
of the City Of New Orleans, we are of the opinion
that further continuance is unnecessary as al
of the pertinent facts to such inquiry as this
fully before
careful consideration of the has fully
acquainted US with its full Importance, and we
approach its solution with thorough consciousness
of the responsibility which the law giving US our
being and defining powers and duties, places
upon
The public interest in the case therefore, de-
mands that decision be prefaced with review
of the relevant facts upon which we base our de-
cision.
The primary rule in all cases of this character
is that the charged the public for the service
han will pay the cost of furnishing the service
and fair return upon the value of the property
used in furnishing the service.
In this case the first of these questions-the
cost of furnishing service-presents the most diff
fcult of the problems because the second has been
greatly simplifed by the fact that the telephone
company is asking that its actual average invest
ment in the State of Louisiana be taken as the
basis for its return rather than the cost of repro
ducing the properties.
We have therefore definite figures as to the
to rate of return may be properly based.
The telephone company has shown that its
operating expenses have been steadily increasing
and that the increased cost of operation has more
very small margin between the operating expenses
and the operating revenues which in short time
will entirely disappear.
The company has shown that account of
conditions prevailing at the time of the war, and
SINCE it has been unable to furnish service to many
of the public who desire it. and that on tina. ac-
the business interests of the state have great
" suffered and will continue to suffer unless is
able to provide more facilities with reasonable
promptness and at reasonable and just rates
There have been filed with the Commission
complaints from citizens of Shreveport Louisiana.
and likewise a complaint from the City of Shreve-
port. demanding service which the Company has
been unable to furnish. The records of the Com
mission are filled with complaints that service IS
not being installed when and where urgently needed
The officers of the company admit that the
service has not been up to the pre-war standard,
but explain that is due to its overloaded
facilities and that this condition cannot be remedied
until new facilities provided that will take
of this overload.
in its various offices throughout the state about
5000 signed applications for telephone service, none
of which it has been able to fill account of the
conditions set forth above
It has shown that on account of its small earn
ings that the investing public are not attracted by
its securities, and thus. unless it obtains
lief, it will be unable to secure the capital by
the issuance and sale of securities borrowed
money, with which to make additional investment
in extensions and development that
sary.
1t has shown that the average wages paid its
operators in Louisiana is S59.45 per month and
that these wages cannot be decreased but the
contrary will have to be increased That on &C
count of the wages paid by other industries it is
experiencing great trouble in keeping its trained
operators and that in consequence of old ones eav
ing, attracted by higher wages, and ones hav-
ing to be constantly trained, the service has neces
sarily suffered.
It has this time well defined plans for fu-
ture development, dependent upon its ability to
attract capital to invest in its securities which
condition necessarily depends upon its ability to
show bankers and the investing public that it is
earning sufficient to pay the interest the money
= us TO be obtained