The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-04-25
hike Phone RATES
Commissioner G. L. McDermOtt
Approves Seven Rate Increases.
c. Nj. Reed Severely Attacks
Action i'm Telephone Case.
is FINAL REPORT TO COURT
Cases Affecting Seven Towns
Before Courts More Than Year.
Should Courts Approve Action
Rates VIII Be Permanent.
IS FINAL REPORT TO COURT

Telephone rate increases in seven
Kansas towns-Arkansas City, Atchi-
son. Great Bend, E1dorado, Hutchin-
son, Lyons and Winfield-are ap-
proved in report filed today with
the Shawnee county district court and
the supreme court by George T. Nc
Dermott, commissioner. Immediately
after the report was filed a statement
written last week by Clyde NJ. Reed,
chairman of the public utilities COM
mission, was made public. 1t severely
attacks the McDermott report and the
action of the commissioner.
The McDermott report is the final
recommendation to the courts IN
phone rate cases which have been be
fore the state commission and the
courts more than a year. Trouble
started when the public utilities com
mission waited months without decld-
ing the application for a rate advance
The Southwestern Bell company then
went into the Shawnee county district
court and enjoined interference with
the proposed increase. Following fill
ing of a series of cases. the court ap-
pointed the Topeka lawyer as comm1s-
sioner. He spent seven weeks hearing
testimony and arguments.
Refuses To Accept Figures.
McDermott refused to accept either
the valuation figures of the Bell COM
the former and increased the latter
He held that a public utility was en-
titled to receive a return of to per
cent on its Investment. He asserted
that earnings under the old rates had
that earnings under the old rates
cfent public utility service could not
be maintained unless capital was given
a fair chance to make adequate return
and protect it's property.
"A utility serving the public ought
zDr~ taA ice q
his report, land for that service it is
entitled to have its property preserved
and to receive a fair return upon that
property. The public as a whole
wants good service and it is entirely
willing that the property used by the
public should be preserved and that
a fair return should be paid for its
use. The immediate result of unrea-
sonably low rates is the impairment
of the service and if continued results
in the final destruction of the prop
erty and withdrawal of capital from
such use. If such policy is pursued
additional capital will not enter the
field except upon exorbitant terms"
Return1 on Investment Small.
In his report McDermott held that
the rates fixed by the public utilities
commission gave the wire company a
return of only a fraction of l per
cent upon its Investment in Lyons and
Eldorado, per cent in Atchison,
I1uLCt4llSOn. NNlIlLltiu. AThdllSdS lily
and Great Bend. Following filing of
the various cases the public utilities
commission took up the cases in the
several towns and made a finding.
The commissioners report asserts
that no material change was made
by the commission in existing rates.
Should the courts approve the Nc
Dermott report the new rates initiated
by the Bell company in the seven
towns will be made permanent.
Reed Makes a Protest.
Chairman Reed issued a five page
typewritten protest against the COM
missioner's report. 1t was prepared
last week before the utilities chair
man left for Washington.
THE report of Referee McDermo oft
is the most amazing document in the
annals of public utility regulation and
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