New-York tribune., 1922-03-30

Asks Court TO
Forbid Rate Cut
EIuii. Sui, Before Federal
Judge Calls New Tariff
Filed by Public Service
Commission Coniiscatorv
8P. E.. Return Demanded
Saving 10 Subscriber Put at
Cen. Daily; Corporations
Loss 3 Million Annually

The New York Telephone Company
5cgsn equity proceedings in the Fed
oral Court Yesterday to obtain an in
yuSion TO restrain the Public Service
Commission from enforcing its order
Of March 3 prescribing maximum rates
effective April l. The complaint
charges that the new schedule is con
Hscatory, preventing the company from
earning any return in excess Of 2.56
per cent upon the cost of its property
or 1876 per cent upon its reasonable
value. The actual cost Of the equip
nent used in furnishing lntrastate
service is placed AT S24I 435.923, it's re-
production cost at 1913 900 900 and its
reasonable value at S323 600 600.
The complaint asserts that the COM
pany is omitted to a return of per
cent on the lest Of these amounts, al
,hough under the rates at present ef-
fectiye the yield for the last half of
1921 was only @.41 per cent and for the
entire year 1921 $50 per cent a state
mont issued last night by J. 5. McCul-
oh. Nice-president of the company,
Gays that for the next few years the
corporation will have to borrow be-
tween s40000,000 and $50,000,00O annu-
ally for new construction and that the
new rates would mako it difficult to
raise money in the open market, in
which the last borrowings had to be
made at more than 6i7 per cent
The company has not by any means
fully recovered from the effect of CON
ditlons arising out of the war Mr NC
Culioh went on. "We are still engaged
N building up the system TO meet the
constantly increasing demand for serv-
zee, which continues abnormaily heavy.
During the last two years VIC have cx-
pended @64SoS,190 in extensions and
additions to our plant in New York
state. This expenditure vas necessary
O expand our system to meet the pub
lcs growing requirements for new
telephone service, During thc next few
Years We Will need some $40, ,O00.00 to
10000, 900 annually for new construc-
don
We wust compete in the open mar
.et for new money with other indus
iies NOT regulated by commissions
Fnlch can and do pay high return
apou the capita invested in their bust
nes- Our la borrowings cost US
oro than 6'2 per cert and our return
as hecn substantially less than that
CURE
h' ~ 'pFrFV rates would save the
Fersge subscriber about one cent
lay but in the aggregate would re
5uce our annual revenue at least
S5.0ooooo. Such "A reduction would
reate serious situation in the con
uct of our business.
ut is our legal obligation TO furnish
,mprehensiye telephone service of a
gh quality TO the public We believe
lat tho public demands and is entitled
70 the best telephone service that can
be givca and that il is willing to pay
fair tatc for such service. We can
rot mc't this obligation unless our
canning ere sufficient to pay the neces-
saN operating expenses and also pro-
'.de fair returu upon the value Of
&C property actually used i'm the pub
''c service. To this eud our earnings
Nust ct an times be SO Fair and rca.
*onahie that they viii attract the new
capital which We continually require in
large amounts for uew construction
aHd the expansion Of the system"