The Pickens sentinel. (Pickens, S.C.) 1911-2016, 1921-05-26

i S592,O0O.00. This amount in ou
opinion can not be substantiated un
der careful analysis of the item.
charged to this account. Thi.
amounts to more than fourteen be,
cent Of the total value of the prou
erty, Il ratio that in our opinion is ;b
solutely unreasonable.
No evidence was submitted to show
the rates OF depreciation charg, ~ b,
them nor was any evidence submitted
to show that depreciation for prio,
years had been deducted from The
original investment accounts.
The petition off te company stat
ed that it was necessary for the com
pany to have increased rates in orde,
that it could raise additional money
with which to carry on their bu,nos,,
in this state. We have evidence that
in the same month the Southern pnll
was pleading poverty in South Caro-
INA 1T bought common stock Of an
other telephone COMPANY and mid
for it to the amount Of $2,40O, 900
We believe that tn, distribution OF
income from long distance toll scrv-
ice between the Southern R,il Tc,n-
phone q Telegraph tompany and
Sher parent company, thc American
Telephone s, TELEGRAPH company. is
unfair to the Southern Bell Tbn
Southern Ecll mako. tn. conncct;on
and performs the luygcr part al. the
service, but it receives only twenty
i've per cent Of gross income for such
service (n no case more than 70
cents per calD and the American
pafeho company receives sevcnty-fva
per cent. The result is q reduction
or Southern Bell income and appar-
entity small revenue from such sorv-
'Ne'' H"ch arrangements as these
made IL possible for the A,ncricnn
company to earn last year more than
Ten per cent of its capital stock while
the Southern Bell earned approx
nateiy four and three quarters Der
cent on its capital A change in the
terms of the contracts between the
Southern Bell and the other compan-
les slightly more favorable to the
southern Bell would have resulted IN
net income to them of five and one
half to six per cent on their capital
stock
we are informed that the Federal
income taxes were charged by the
Southern Bell as part Of their on
Grating expense. All business men
know that such 4 charge against in
come is improper as a cost Of operat-
ing. Such a tax represents cost to
the stockholders rather than a cost
Of furnishing service.
The statement furnished by the
Southern Bell to the railroad com.
mission contained only three items OF
revenue and nine items of expense
These lump figures were not ex.
planned or amalyzcd and no attempt
was made to show how these gross
figures were arrived at.
The new rates were requested on a
plant investment figure as Of Dcccm-
Der 3lst, of $5,3GS,OOO. Telephone
company witnesses testified that the
actual value Of the property was
probably eighty-eight per cent more,
making a total present valu, of ap-
proximatcly ten million dollars. Yet
the company submitted sworn state
ments to the South Carolina tax com
mission that the value of their prop
erty in this state was only $3,256,-
and were assessed by the commission
approximately forty-two per cent of
that figure or $1,353,O0O. In other
words it is apparent that they have
used one set Of figures in assessing
the public for revenue and another
set for tax assessment by the state.
And it should be remembered that
telephone companies are required to
report one hundred per cent values
and that the tax commission assesses
only fortytwo per cent of such
values. AS one illustration of the in
consistcncies Of their statements, il
has been discovered that the telc-
phone company pays tax on certain
lot in this state on the basis of SAP
whereas the actual value of the LOT
is between $4,000 and $4,000.
One Of the most serious changes
made by the telephone company is
the discontinuancc of direct inter.
community service formerly furnish
ed at nominal cost and the placing OF
! this service on q long distance toll