The Monmouth inquirer. [volume] (Freehold, N.J.) 1865-1933, 1924-03-13
Why New Telephone
Rates

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New schedules Of rates for local
| telephone service IN northern New
Jersey were filed by the New
York Telephone Company with the
State Board Of Public Utility Com
nissioners at Trenton. This is the
first time IN the history Of its operation
Of the telephone system in northern
New jersey that the telephone
company has been compelled to file
la general increase in rates, although
some minor changes in rural line rates
were made by the Postmaster general IN
1919 The 1mpany has asked that the
new rates become effective April
list.
In explanation of the company
action. III. g. Kerr, New Jersey
division commercial manager Of the
Telephone company, issued the follows
ing statement.
During the recent years Of heavy
increases in the costs of telephone
! operation and the necessity for the
Expenditure of enormous sums for the
expansion Of the system, to meet
demands for service, we have
endeavored, BY every practicablemee ms
to avoid Increasing oar rates for local
telephone service. We have introduc
ed, wherever 20 sible, modern devices
to keep down investment and save
time and labor. We have practised
| the most rigid economies. NotwIth-
standing all these efforts, our revenues
have not kept pace with our ex-
lpenses.
From 1919 to 1928, inclusive. our
fexDenses have increased much faster
than our revenue.
without any increase in the rates
| for our service. and with operating
costs that have oufstripped revenues,
there is only one result-a diminishing
rate Of return.
,Our only source of income is the
rates the public pay for the service
we provide. These rates must produce
sufficient revenue to enable us to
opefate our system at standards that
Twill give satisfactory and efficient
service and attract new capital for
lexpanding the system to meet the
bubbles needs. Few telephone con
struction is not paidfor out OF the
lc1mpany's earn ings. but with money
Iobtained from the public through the
sale of our securities. Our revenue
must provide q return sufficient to
meet operating expenses and pay
/ Interest and dividend charges, 50 that
investors viii continue TO lOan US the
new capital we constantly need for
the expansion and development of the
business.
sour investment in physical plant
used in the service OF the public In
northern New Jersey increased IS
percent from 1918 to 1928. This increase
was brought about not only By the
construction Of an enormous amount
of new telephone facilities to meet the
publ c's demands for new service, but
also by the high prices we have been
obliged to paw for new buildings, new
subways, cables, poles and many other
items Of physical property which 20
to make up the modern telephone
plant,
ssDuring this five year period, the
system In northern New Jersey grew
nearly 70 percent. On January ], 1919,
there were 10000 telephones II service,
while on January /, 1924, the number
had mounted to 325 co., The. value
of the service to subscribers has likewise
increased tremendously. because as
| the number Of telephones increase, the
scope of telephone serice becomes
wider and enables telephone users to
conduct their daily affairs more easily,
more quickly and more economically.
The work done last year to provide
new telephone facilities IN northern
, ew Jersey furnishes a good Indication
OF the amount OF new construction
necessary each year to keep up with
these demands. In 1928 more than
$40, 900. 900 were invested IN our system
here. We connected $500 new
telephones, added IT'S, 900 miles OF new
wire and enlarged thirty-four central
Office switchbords.
But even these record breaking
accomplishments were not sufficient to
meet all the demands for new service
and in few communities it Is still
difficult 10 provide new service
promptly when wanted.
Nearly $50, 600. 600 of new capital
will be needed this year and next year
for necessaryenlargem the ss stem.
To secure such huge sum OF new
capital from investors for making
additions to the system we must be IN
a s. rongl financial posItlon.Our revenue
must be greater than Is produced by
present rates.
1--WE do not believe that the public Of
New Jersey will permit its telephone
service to stop growing. Knowing the
facts, we believe that they will support
the increase in rates necessary to keep
the service up to the standards the
public requires.