The Washington herald., 1922-01-22
PHONE COMPANY
7EFENDS BIG FUND
FOR DEPRECIATION
President Says 100000,
Set Aside, Made Up
Former Losses.

What is included in the deprecia-
tion fund of the Chesapeake and
Potomac Telephone Company?
What is its purpose?
These questions were asked of the
cOmpany's representatives at the
continuation yesterday of the public
Nearing on telephone service before
the Public Utilities Commission
William Mex. Clayton, represent
ing the public utilities committee
Of the Federation of Citizens Asso-
Citations. called on the witnesses for
the company to show why a sum
amounting to nearly $4,000 should
he set aside as a depreciation fund.
He stated that 1t was his under
standing that the fund was In ef-
feet public moneys which the Utlli-
ties Commission permitted the COM
pany to collect to replace worn
equipment.
Explains 100000 Fund.
Osborne Yellott, attorney for the
telephone company. and A. Z. Berry,
president of the company, testified
the fund was the company's money
and that ii included as well an
amount to make good what the COM
pany considered losses from former
years II is estimated that the de-
probation fund is only S5O,OOO less
than the reported net return.
In concluding their testimony
yesterday the company representa-
tives stated that they believed the
company should earn enough to re-
turn S per cent on their investment
although they were willing to ac-
cfpt the present rates which they
testify returned but 81 per cent.
A. T.. Seymour. secretary of the
Washington Chamber of Commerce,
and Harry King, chairman of the
public utilities committee of the
chamber. said they though the tele-
phone company unusually fair in
its requests and that il was really
entitled to a greater return. Clay
ton asked the commission to cut
the rates in accord with the testi-
mony offered by the company.
Discuss Automatic system.
In all. two full days were given
over 10 the telephone hearing. At
the conclusion the commission an
n"unced II would take the entire
matter under advisement
During the afternoon session the
representatives of the company re-
ported that as yet nothing had been
done in regard to replacing the
present system with an automatic
system. Berry stated that it prob
ably would not be advisable until
the present equipment wore out.
Commissioner Charles Keller asked
when he expected that to happen.
clayton called to the attention of
the commission that at Norfolk.
Va. the company was operating
under an automatic system. Berry
answered to inquiry that it was
entirely satisfactory and that it eff
fccted great savings.
Questioned on replacing out-of-
town operators with local en-
ployCs. the representatives an
Swered that there were now no
"Ut-Of-town operators Morning
testimony concluded the argument
"f the company that the arrange
meHt with the American Telephone
and Telegraph Company. whereby
the local company paid them Az
per cent. Of their gross returns.
was Of great advantage to the
local company in permitting them
{" use necessary patents belonging
10 the larger company
The relationship with the West
ern Electric Company was explained
as an arrangement whereby the
local company could purchase nee
eSSary equipment reasonably. II
was admitted that the Western
Electric Company was a subsidiary
uf the American Telephone and
Telegraph Company.
e. \. Robinson. chief engineer.
testified in regard to equipment,
patents. and mechanical matters.
The present rate schedule expires
on March /.