Omaha daily bee., 1922-04-18
Commission Hears
Application for
Phone Rate Boost
Only Few Of Towns That
Filed Protests Are Rep.
resented When See.
sion Starts.

Lineoln. April IL, - tspeelsl,l-
When the hearing on the application
OF the Northwestern Bell felsphone
company ior an increase in rates Was
called before the state Railway com
mission this morning only isw ol
the towns which had filed protests
were represented. IL Was expected
thar a large number would show up
before the helfp,g was concluded.
The hearing today was 10 inquire
into the contracts and business fela.
,ions OF the Northwestern Bell cont
pany with the American Telephone
& Telegraph company. the parent
Bell corporation. and the Western
Electric company. us manufacturing
subsidiary.
W. {. Lambert. corporation eoun-
sci for the city OF Omaha: {. Z.
Childe OF the Chamber OF Commerce
of Omaha, and Secretary Kuhn OF
the Omaha Grain exchange. were
on hand. the largest increases being
in Omaha. w. II. Young repre-
senied the Fremont Chamber OF
Commerce.
Opens With Explanation.
The hearing opened with an en-
plana,ory statement by r. NJ. Mors-
man. Nebraska counsel ior the
Northwestern Bell. Appearing with
him were General Counsel F. l..
Randall. Attorney A. ]. Mclean.
Vice Presiden, G. II. Pratt and Cen
eral Commercial Superintendent
Lloyd Wilson.
Relative TO the agreemen, between
the Northwestern Bell and the
American Telephone & Telegraph
company, under which the former
pays the latter 4 IL per cent OF its
gross earnings in Nebraska and four
other states, Mr.. Morsman said, that
in return the Northwestern gets
these things.
|. Use OF telephone instruments.
which belong to the parent COM
pany, on rental basis.
2. Right 10 use all American
Telephone g. Telegraph company
patented apparatus and devices.
). Full use OF all standard meth
ods and apparatus perfected by the
American Telephone & Telegraph
company through its experimental
and research work.
4. Freedom from royalties, DAM
ages and litigation over patents.
5. Benefit OF the parent COM
pany's organization in conducting
research work.
6. Advice and assistance OF all ex-
perts. engineers. legal advisors and
specialists employed by the Amcri-
can Telephone and Telegraph COM
pany.
7. Similar advice and assistance
OF financial experts.
8. Support, plans and advice in
carrying on Welfare work, compen-
sation and sick and death benefits.
9. Right to extend all of the for
going privileges and benefits TO all
connecting companies.
Western Electric Mentioned.
As to the Western Electric, Mr..
Morseman said that it acts as
purchasing agent for the North
western Bell and the latter buys its
manufactured product at lower
prices than they are sold to anyone
outside the Bell system. He claim
ed that the branch Bell companies
throughout the country cannot buy
on the open market as advantage
ously as they can through the
Western Electric.
F. F. Rhodes Of New York, out
side plant development engineer for
the American Telephone and Tele-
graph company, was the first wit
ness. His testimony dealt with the
contract whereby the company col
lects 4l-2 per cent of the gross
earnings OF the Northwestern Bell.
i. v. Cox, supply contract auditor
Tor the Americans Telephone and
Telegraph company, was to be ex-
amined regarding the Western Elec-
tric contract with the Northwestern
Bell.
The commission was informed by
Attorney Morseman that the Amer
ican Telephone and Telegraph conf
pany owns all of the stock of the
Northwestern Bell and most of the
stock of the Western Electric COM
pany. It also controls the patents
used in the Bell plants throughout
the country. The original license
contract for Nebraska, he said. was
signed in 1882 between individuals |
interested in the Nebraska Telephone
company and the parent Bell, con-
Germ. In 1906 the three Bell COM
panies in Iowa, Nebraska and Min
nesota signed contracts similar to
the one now in force.