Capital journal. (Salem, Or.) 1919-1980, 1921-03-03
Increased Phone Rates

Increases in telephone rates averaging 80 percent have
been granted by the Public Service Commission TO tne
Pacific Telephone Telegraph company wncn recently
petoned for larger to carry on WORK
and expansion In Salem the charges for business phones
are increased so percent.
Extensions and improvements ordered by the commission
aggregate between and $000OOO and the COM
pany revenues declared insufficient to interest on
existing investment. The commissions decree says:
derived from rates fixed in this order IS not
is it sufficient to cover the @ @
return on money to be expended ezep @ made at
the hearing that in providing ompensatSrS @ on e @ cDia
ered INFESTED sSaoUs w induce and attract the
Like other public service corporations the telephone COM
pany was held to fixed while the costs of operation
including labor supplies and taxes, scared Hence the
demands increased rates. which after being postponed
years. granted at time of general deflaon with
both and materials declining The companys revenues
we're declared insufficient to pay operating expenses and
the public service corporations refuse to take the medicine
of readusment the merchant farmer and manufacturer
must swallow the loss Nor they be compelled to
make betterments and extensions without suttlclent
revenues guaranteed.
It seems to have become an axiom that the public must
protect the investor in public service corporations otherwise
they will cease function Yet protects the invest
mens of the farmer business The latter however,
have the opportunity to speculate and proteer denied TO he
former When money rolls in in too great quantity rates
are supposed to be cu-they seldom for means are
always found to absorb the The profteeng in pub
lie service corporations done in the promotion wreckng
refnancng and other operations before they under
public control Yet public utility petltlonng
for a lower schedule of public charges
It questionable whether the increased rates Will yleld
the additional sought. The buyers strike tend
ency prevailing will the removal OF many phones'
lust as the railroad rates have produced less gross
revenues for traffic Every additional charge by pubic
corporations increases permanently the cost OF living
shows the aacy of supposng that we Will ever again
return to the pre-war plane of living costs
The alternative to public regulation is public ownership
and operation and the public is not ready for that The
service is poor enough under private ownership with the
incentive of promotion and profits Experience has proved
that it would rapidly deterorae under public ownership AS
ment his efficiency decreases and his output dminshes
Politics would complete the Generalization. The national
trait of indviduaism units Americans for experiments in
socialism,.
At the same time the Public Service Commission an
nornces the increased rates. the American Telephone
Telegraph company of which the Pacific company sub
sdiary in it's annual report most prosperous
year The dividend rate for the past Ia has been
percent and in addition to paying dividends OF $500 per
share past year. all interest and fixed charges $4,000
200 was appropriated for Reserve for Contingencies and
SO 42278 carried to surplus account
The parent company and its predecessors have paid
dividends the of at least $3.50 share for the past
80 years and addition created flock of mutmlonaires
The stock however has been widely distributed the
peope and the number of shareholders total 48 the
average number held being 80 The nancers and
underwriters long ago unloaded on the dear people
Most of those compelled to pungle up the additional
revenues will why of the $16O0O0O0 of
profits are used for extensions instead of being placed in
the surplus preparatory stock dvdendbut the parent
company makes each subsidiary finance itself from the
people it serves and is content to take the profit.