The Washington times., 1924-03-14
TELEPHONE
RATEC(JT
ASKED
$750,000 Slash in Earnings
Demanded by Citizens
Federation.

The Federation of Citizens AS
ISOLATION today demanded that the
Public Utilities Commission slash
rates of the Chesapeake and Po-
tomac Telephone Company in a
wholesale way.
William NICK. Clayton, repre-
senting the federation, filed brief
with the commission in the tele-
phone case and asked that ere
auctions in the tolls and charges
of the company be made by the
commission to the extent of $780,
OOO."
Still Earn 8 Per Cent
This could be done and the
company continue to earn per cent
rate Of return through the year
1894 by proper and just treatment
by the commission of the deprecia-
ton and royalty accounts Of the
COMPANY" Clayton said.
1T could be done and $500, 900
allowed to depreciation for the year
1924 II the company Is held to 6
per cent rate of return and the
bonus paid the American Telephone
and Telegraph Company held to
$125 900.
Mr.. Clayton declares that in 1929
the company received three rates of
returns, as follows:
Amount deducted for depreciation,
%771,OOO or per cent on invest
ment.
Amount deducted for payment to
American Telephone and Telegraph
Company, $248,00O or IA per cent
| on investment.
Amount available for net return
81 100000 or S.35 per cent on in
vestment.
Combining these three rates Of re-
turns" says Mr.. Clayton, results
In rate of return for 1928 OF
IA 5-6 per cent, or in dollars, 81,
389 900 on valuation Of SIG, 500, 900
Touching on the depreciation ques
ton, Mr.. Clayton tells the commits
sion:
Rate Too High.
1.-THE truth is that no such de-
probation exists or can be found
and the depreciation set up is far
beyond the bounds set by the 'ade
quate' depreciation named in the
Public utilities act, and exceeds now
by a large margin any reasonable
needs and requirements Of the com
pany.
"These heavy and extraordinary
no. characterization
beyond the needs Of proper and ade
quate depreciation and diverted to
capital account and current main.
tenance is strongly suggested by
this significant fact, to which the
attention of the commission is
closely invited"
OF the bonus paid the A. T. &
t.. Mr.. Calyton says:
Bonus Charge Scored.
1.-THE payment of these large
sums of money year after year
| compelled and exacted by the A.
T. & T. from the Chesapeake and
Potomac Telephone Company can
not be defended on any Of the
grounds advanced by the company
in this case.
"They cannot be defended in con
science and good faith.
ut is only a camouflaged at
tempt to collect indirectly what
could not be collected directly. The
subsidiary companies of the so
called Bell system were created
by the holding company, the A. T
& T., for doing under the form
Of law what the spirit of the Law
would deny them and turn away
in sorrow and shame"
Mr.. Clayton points out that 1872:
was the most prosperous year in
the company's history. The report
for January 1924 as compared with
January 1928 indicates for the year
1924 large increase in the operations
and profits over 1923.
1.-THE rate of return for deprecia
ton, the rate of return on valuation
the amount of royalty paid to the
A. T. & T., the dividends paid or
stock, the amount credited to sink
ing fund. the amount carried t.
surplus are all larger for the veal
1928 than these items for the veal
1922, Mr.. Clayton says.