Evening star., 1924-02-25
c. & P. co. FORESEES
PROFITS IN RADIO
Continued from First Page.)

iToHt
IL the commission took into consid-
Grafton the company's return on its
accrued depreciation the company 8
return for last year would have been
close to IL per cent on its valuation
After Mr.. Clayton had briefly sub
nitted the testimony on which he ar
gued the rates should be reduced, At
torney De Fane stated that while the
company was present to give the
commission any data it desired. 1t
seems to us upon his showing the
commission would do proper to dis
miss the application now without
hearing from u.s."
Relations of Companies.
When the hearing opened Mr.. Clay
ton made a motion that the American
Telephone and Telegraph Company,
and the New York Telephone Com
pany be made parties to tho hearing
in order that he might bring out GER
tain evidence relating to them, and
their relations with the local COM
pany-
After much dickering by the law
yers, it was concluded to go on with
the hearing and consider Mr. Clay
toii iAAolloIl ldltI IL IL DSCdUNc utCtS-
sary. Clayton said he raised the
point because of the fear that certain
testimony could not be brought in
unless those companions were par
ties.
In presenting his case for a reduc-
ton in telephone rates Mr.. Clayton
filed as evidence the Utility Commits
sion's own figures, which showed the
company earned return Of 7.33 per
cent last year on weighted average
valuation of $16,500,934.
Mr.. Clayton then placed on the
stand E. V. Fisher. accountant for
the commission, and asked him if q
deduction was made of the accrued
depreciation and the federal income
tax in arriving at the returns stated.
Deductions Not Made.
Mr.. Fisher testified that such deduc-
tions were not made
The attorney for the Federation of
Citizens then requested that Mr..
Fisher determine what the company's
return would have been if no allow
ance had been made in operating ex-
penses for accrued depreciation and
income tax last year.
Returning 10 the stand later, NJ.
Fisher testified that by deducting
s7s7.713 as accrued depreciation last
year the company would have earned
a return OF 11.ss per cent. He ex-
planned that the income tax item was
included in the company's total taxa
ton figure, and was not Immediately
available for purposes of figuring.
The Utilities Commission announced
several days ago that It would hold
a. public hearing next month to con-
slider this entire question of how de-
nrnNf1ffnn g hn 1n1 co. ,,Y1
Of the corporations.
After Mr.. Clayton had submitted his
testimony Chairman Bell had II. c.
Gretz, chief accountant for the COM
pany. placed on the stand. Maj. Bell
brought out in testimony that the
company has s13.o0o.000 in common
stock, practically all Of which is
owned by the American Telephone and
Telegraph Company.
Increase I'm Dividends.
In answer to Maj. Bells question
Mr.. Gretz testified that the dividends
on this stock were 6 per cent in 1921,
"a in 1922 and per cent last year.
Considerable time was taken up
with a discussion of the reasonable
ness of the payment Of Az per cent
American Telephone and Telegraph
Company each year.
Answering a query from Maj. Bell,
Mr.. De Vane, attorney for the COM
pany, explained that this payment,
which last year amounted to $247. 900,
represents the rental charge on all
telephone instruments used in WASH
ington; that 1t represents valuable
laboratory of the American Tele-
graph and Telephone, and that 1t
represents expert engineering, legal
and financial service rendered by
the American company.
Mr.. DeVane pointed out that ma
jority of the state commissions and
also the United States Supreme Court
have upheld the policy of Bell Tele-
phone Companies throughout the
country in entering into this Az per
cent arrangement with the parent
company. He ventured the prediction
that the services rendered are worth
more to the local company than the
amount Of AZ per cent of the reve-
: Mr. Devane told the commission
the company stood ready to furnish
any and all Information desired by
1t in determining whether the appli-
cation Of the federation for lower
rates should be allowed.
The commission closed the hearing
at 1880 and took the case under ad-
viSement.