Capital journal. (Salem, Or.) 1919-1980, 1921-08-23
Revision of
Phone
Plan Asked
Astoria Attorney Says
Cities Should Pay in
Proportion to Cost of
Local Business

OF the towns in Oregon were flash
ed upon the scene in the telephone
rate rehearing this morning when
James w. Mott, attorney for the
city Of Astoria, proposed that ey-
cry community stand upon its
own bottom In guaranteeing a
reasonable rate OF return to the
Pacific Telephone company.
An exhibit introduced Monday
by N. Wigdon, rate engineer for
the telephone company, shows
that the rate Of return to the COM
pany at Astoria is 8.66 per cent
based on estimates for this year.
The average rate OF return for
the entire state is shown to be
3.01 per cent.
Classification Wrong"
Mott, contending that Astoria
was not properly classified in the
commissions last order, declared
that Astoria was willing to pay
reasonable return on the COM
pany's investment but does not
want to bear the burdens OF AL
bany or Portland or Baker or any
OF the other towns In the state.
Let the commission decide what
will constitute reasonable re-
turn to the telephone company
whether that means five per cent
or whatever 1t may be and Astor-
Ia will pay II without a kick" he
declared.
"Do you realize Mr.. Mott. that
the immediate application OF your
theory might necessitate rate
raises in half the towns in the
state?" questioned Commissioner
3nchtel.
Albany Shows Deficit
The same exhibit upon which |
l-ott is basing his claim for rate
reduction for Astoria shows that
in Albany the company this year
will suffer a deficit equivalent to
4.2s percent on its rate base. In
Heppner the return is shown to
be 37.7S percent in the red.
Rates OF return for other towns
In the state are shown in the ex-
hibit as follows:
Ashland a.; Baker 1.75; Cor
Wallis 6.74; Eugene 9.s1; Grants |
Pass minus 3.45; klamath Falls
7.S2: Oregon city Sol; Pendle-
ton 1921; Portland 2.21; Rose
burg 1895; Salem 4.Ss: The
Dalles minus $50; other exchang-
u minus 2S.05. 7
Completion Of extensions and 4
improvements now under way at /
Astoria will bring the rate OF re- /
turn In that city down to 4.59 per I
cent. according TO engineers with G
the public service commission, /
this same being true over the state !
generally, they explain. G
Actual expenditures for extern i
sions and improvements In Ore
gon by the Pacific Telephone COM
pany this year viii greatly exceed h
estimates prepared prior TO the i
rate hearing OF last December, ac- =
cording to G. e. Flaeger OF San n
Francisco. chief plant engineer for n
the Pacific company. n
These estimates. according to h
Flaeger, aggregated s1,700,000 h
whereas when this years pro- h
gram is completed more than s2,- n
500, 900 will have actually been :,
spent In this state and 1--WE could \
easily spend $5.OOo,ooO in the
state in putting all the exchanges a
In apple pie order he declared. n
The relations between the Pa
cific company and the American q,
Telephone and Telegraph COM :,
pany were gone into In great de- !,
tall by Flaeger. The AZ percent r
icensee contract, which has been
he subject of attack on the part
u the city OF Portland, actually
results In saving annually far
IN excess OF the outlay involved,
according to Flaeger who intro
iuced voluminous exhibit fill
ID with figures to prove his point.
Even under the increased rates
he Pacific company will realize
. return Of only sol percent on
Is investment in oregon this
'ear, according to NJ Wigdon,
ate engineer for the company
Who occupied the witness stand
n the rate rehearing this after
loon.
The return on the Portland ]
liant would approximate only |
81 percent. Wigdon declared. |
Figures produced by Wigdon
how an estimated revenue for
he state during 1921 Of s5.i2S.- |
90 with expenses estimated at |
4.e1s.0O0 leaving a net revenue
, the company of $4,000. |
Operation OF the Oregon plant |
the company IN 1920 resulted /
a nea revenue Of s4s.1Si, re- II
,rn Of .27 Of 1 percent on the i
lvestment, wigdon stated. The Il
ortland plant showed a deficit II
operating revenues for the year