New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1922-08-31
Telephone Rate
$2.25 Too High,
Expert Charges
Yearly Tariff in State is
Based on nm Excessive
Depreciation Allowance,
p. S. C.. Court Is Told
Engineer Offers Figures
Corporation Counsel Shows
Company Issues None of
Voting Stock to Public

The New York Telephone Company
is charging its subscribers at least
1926 more @ year for service than is
justified, according to testimony yes
terday at the resumption of the hear
ing before the Public Service Commits
sion, Second District, on telephone
rates and conditions throughout the
state. This statewide excess was
based on the estimated annual allow
ance for property depreciation made by
the company as compared with small
er allowance reached by expert wit
nesses for the state and city.
Cyrus G. Hill, an engineer, with of
fees at TT Broadway, testified on this
point. Mr.. Hill said he had studied
the books and records of the New York
Telephone Company since June. 1921,
to determine tho depreciation and
proper reserves Of the company. He
produced volumincus figures made dur
ing his investigation and the exhibits
were made part of the record.
Excess Put at $f9,45c,739
Mr. Hills figures tended to show
that the excess of the company's fixed
capital reserves above the requirements
was, for the entire state, S19,450,739.
OF this amount $14,Q67,7S0 was in this
city and $2,51S,T15 in the adjacent ter
ritory in Westchester County and Long
Island.
The depreciable property as taken
from the company's books for 1921 for
the entire state amounted to $685.
SsS,so0, of which s122,490,774 was for
New York City. The telephone, COM
pany's fixed capital reserve as of De-
cember 81, 1921, according to Mr.. Hill,
was $69,596,739 for the state and
$45,3s2,7sO for this city. The witness
estimated required depreciation reserve
as of December 81, 1921, was S50,146, 900
Tor the state, of which $31,315, 900 was
for the city.
Preferred Stock Oversubscribed
NJ Maldwin Fertig, Assistant Cor
poration Counsel, appearing for the
city at the inquiry adduced testimony
through witnesses to show that the
New York Telephone Company offered
no common stock for sale to the public,
which has voting power, but offered
S25,00O,000 of preferred stock, which
was over subscribed S55,O0o, 900, the
preferred stock having no voting power,
1t was also brought out that the Amer
ican Telephone and Telegraph Com
pany controls the stock of the New
York Telephone Company and pur-
chases new issues Of the New York
cempany's stock before it reaches the
public.
Harland A. Trax, chief accountant of
the New York Telephone Company,
testified as to the $4,000 900 sub
scribed by the public for the $50, Oo0,-
ooO offered in preferred stock at s10o
par value bearing interest at 6M per
cent. He said the stock had no voting
power. The witness said that no com
mon stock issue had been advertised
and offered to the public as Che pre-
ferred stock issue was.
Assistant Corporation Counsel Fertig
said that to-day the city will submit
PROOF that the valuation figures placed
on land and buildings of the telephone
company are too high. Real estate
experts will be called as witnesses BY
the city to 4estify in that regard.