The New York herald., 1922-03-31
PHONE REDUCTIONS
ENJOINED FOR WEEK
Federal Judges to Decide al
Hearing April 8 on Merits
of Suit.

Judge A. n. Hand in the United states
District Court yesterday issued a tenn
porary injunction restraining the PUB
lie Service Commission from enforcing
the reduction OF telephone rates. which
was to have been effective tomorrow.
A bond of $4,000 was furnished by the
New York Telephone Company. with the
understanding that in the event the
company lost It's suit the subscribers
would receive the difference between
the present rates and those which were
to go into effect.
The Injunction will remain in effect
until April 8, when a hearing on the
merits OF the telephone company's suit
in equity will be held before Judges
Hough. Knox and A. n. Hand. The in
junction may be dissolved or extended
then.
Judge Hand denied an application to
adjourn the proceedings before the In
junction had been issued. This motion
was made by John p. O'Brien, Corpo-
ration Counsel, who appeared on behalf
of the city.
Ledyard p. Hale. for thei Public Ser
vice Commission, said the reduction in
rates set by the commission had been
made under the provisions OF Law
snacted year ago. This power. ac-
cording to Mr. Hale. allowed the COM
mission to levy a higher or lower tele-
phone rate as might be demanded un-
der the urge OF public interest or neces-
sity." He further explained that the
present order reducing rates. which af-
fects both New York city and up State
alike. was in the nature OF a temporary
order and admitted that the investiga-
tions into the company's valuations.
and earnings had not been fully COM
pleted. This. he said, may take the
commission six months to finish, but
said that this did not materially affect
the rats decision.
Pointing out that although the order
was served on the telephone company
on March regarding the new rates.
Mr. Hale said no application for a
review by the courts of this order had
been received from the company. In
reply to this point John w. Davis. at
torney for the company. said he could
not find aSny demand or mandate in
the law by which the company is forced
to appeal to the commission.
I'VE have come 10 this court" he
said. because We contend that the
action of the commission is confiscatory.
and because we believe we have right
to secure an injunction and have the
case heard by the Federal courts and
disposed Of as an equity suit. Further
more, in the order served on the com
pany. as far as New York city is con-
cerned, the only reconsideration which
the commission sets forth is that of re-
classification and nothing as TO read
justing or modifying the rates"
Mr. Davis stated that the reason why
there has been no definite action re-
70 ha lee q
concerned is because the officers OF the
company have been working TO find out
just how it will affect the company.
Judge Hand then asked counsel. who
included Attorney General. Charles d.
Newton and Assistant Attorney General
Thomas F.. Fennels. how any prejudice
could be worked by a temporary injunc-
tion.
Objection was then entered by Cor
poration Counsel O'Brien, who asked for
an adjournment He termed the claim
of the telephone company "himsy" and
said the question was not proper for the
Federal courts.
There Is bill pending before Con-
gress." he said. (which IL passed will put
an end to this kind OF litigation in which
the public hasn't a chance to win or be
heard"
1.-The city OF New York has not heen
served with papers in this case" Mr..
O'Brien protested. "and I ask that It be
made party TO the suit. We are q
large subscriber and we also represent
the public"
Judge Hand listened to the objection but
made no attempt to recognize the city
as an intervening party in the case and
adjourned the hearing until April 5.