Oxford eagle. (Oxford, Lafayette Co., Miss.) 1876-current, 1921-03-10
Dissenting Opinion OF Commissioner
Z. M. Morgan In The Cumberland
Telephone Rate Increase Case.
No. SIP.

No. 5172.
This case is an application by the
Cumberland Telephone & Telegraph
Company for an increase in exchange
rates only. The average of the per-
ceatage of increase in rates, as al
lowed by majority of the Commits
sion is 1914 per cent, ranging from
1S. 2 per cent to 60 per cent.
The Cumberland Company operates
in the states of Mississippi, Louis
lana, Tennessee and Kentucky, and a
very small part of Illinois. The Am
erlcan Telephone and Telegraph Com
pany owns 100 per cent of the capital
stock of the Southern Bell Telephone
Company, and the Southern Bell Com
pany owns SO per cent of the Cumber-
land. At the same time the Ameri-
can Telephone & Telegraph Company
owns 81 per cent OF the stock of the
Western Electric Company, and this
latter company manufactures and
sells the telephone equipment used by
the Cumberland Company. For all
practical purposes the American Tele-
phone and Telegraph Company owns
and operates the Cumberland Com
pany, as we'll as the manufacturing
corporation that furnishes it's equip
ment.
have given to this case the most
careful consideration of which am
capable, and have come to the con-
clusio1 that the increases, as request
ed, should not be granted, for various
reasons.
The application did not ask for an
increase in long distancerates, but on
~ on exchange rates, yet the Cumber-
land Company did not show what part
OF its operating expense was exchange
expense and what was long distance
toll expense, and it has, therefore,
been utterly impossible to ascertain
from the testimony whether the IN
crease, If any at all, should be given
Telephone Company, filed with this
quarterly reports of the Cumberland
to exchange rates or to toll rates. The
Commission for the year 1920, have
shown a gradual increase in exchange
revenue, while at the same time these
reports show constantly decreasing
return of long distance revenues. If,
therefore, seems, to me that the trou-
bic with the revenues of the Cum
berland, if there is any trouble in this
record, is with the long distance rates
and not with exchange rates.
The Cumberland Telephone & Tele-
graph Company has been required by
the American Telephone and Tele-
graph Company, to make with it, a
contract whereby the Cumberland
pays to the parent company 1-2 per
cent OF its gross revenues for rental
OF certain telephone equipment, and
for engineering, financial, and accoun-
ting advice. There are $500 tele-
phones in Mississippi, and during the
year 1920, under this utterly indefea-
slble contract, in my judgment, the
Cumberland Company paid to the Am
er1can Telephone and Telegraph Com
pany, $108,000. The only substantial
benefit of this contract is the rental
OF the equipment, which would amount
to about $500 per annum per instru-
ment, the total cost of which instru-
ment is only $500, and it, too, is ma1-
ufactured by the Western Electric
Company, or the American Telephone
and Telegraph Company under anoth-
er name. To my mind this A 1-2 per
cent contract constitutes tribute,
which the public Of Mississippi is re-
quired to pay to this gigantic mono
poly. I do not believe that the Mis-
issippi Commission ought to allow an
increase in rates that imposes this
rx<&~~l~ - - n. -