Worcester Democrat and the ledger-enterprise. (Pocomoke City, Md.) 1921-1953, 1924-10-04
A BUSINESS PROBLEM
AFFECTING MARYLANDERS
Baltimore Association of Com
mercePresents Facts About
Telephone Situation

In view of the fact that the Chesa.
peake & Potomac Telephone Co. has
asked for an advance in it's rates; and
in further view of the fact that any
change in rates is of definite interest
to the business elements connected
with this Associations have deem
ed it wise to interview the Telephone
Company to see upon what theory CIR
condition of facts it has predicated its
application. We have done this in Or
der that our members might under
stand at the outset the theory and
purpose and the need, if any, for this
request for increased rates.
The officials of the company were
very frank and cordial; and they I'M
hesitatingly laid before US the basic
figures relative to their business
These figures, because of their signiii-
cant bearing, reveal the impelling
reason which has forced the com,
pany's action.
We have on record in this office the
facts which trace the development OF
the company; it's performance; it's an
nual earning power. We have the
figures showing the net results over a
series of years. We have the figures
which disclose the constantly increas
ing cost, or investment, which the
company has been compelled to ex-
pend ON each individual telephone
We have the figures to show the rapi,'
increase in city and state taxes where
by the tax per telephone has jumped
from 1928 in 1919 to $500 in 1924.
We mention the above merely to
evidence the fact that the company
readily provided us with such major
information as would give us an in
sight into their motive for seeking an
increase.
After all, the real fundamental
reason is the problem of Service"
The telephone has become such an
indispensable factor in business that
there is an imperative popular de-.
mand for the best possible Service"
That means a continuous expansion
facilities and improvements. 1t means
q persistent enlargement of the COM
pany's investment in each individual
telephone.
The records of the company show
an abnormal demand for telephone
service, which has been on a constant
swell during the last five years. To
meet this demand, the company, ac-
cording to figures submitted to us, has
expended $11 100000 in net additions
t. it's plant. Careful surveys which
the company has made seem to indi-
cate that the same ratio of demand
for new phones will continue during
the next five years. That seemingly
will involve an inevitable big outlay
which during the ensuing five years
will parallel, if not exceed, the last
five.
If the insistent growing requests
for more phones continues to-, multi
ply, it will evidence a healthy expan-
sion Of general business.
In these days, not only is it true
that this implement Of business is alb
solutely essential; but it is equally
true that the service must be adequate
and up-to-date. The public will have
nothing less. The "best for Balti-
more" is the public's demand.
The question with the company is:
How can it provide this future ex-
pansion and improvement when it's
present earning basis yields only 5
investment? 1t is argued that the
present margin of net return is in
sufficient to take care of both divi-
dends and extensive expansions. Ad-
ditional capital in some form will be
requisite. In the fact Of the unavoid-
able OUTLAWS which must be made to
take care of the persistenly multiply
ing demands for more telephones,
there are some financial elements who
feel that the present low net returns
Of the company, will make it difficult,
if not impossible, to attract the neces-
sary additional capital which will be
needed to finance these future expan-
sions.
Should that viewpoint prove true
the public will find itself hampered in
the matter of more service and up-to-
date service. Unless the company can
finance itself amply in the provision
of Appliances, either the service will
suffer, or the number of telephones
will not keep pace with the popular
demand.