Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1925-09-16

Company, which is the manufacturing
and purchasing branch of the Bell sys-
tenn. It also owns majority interest
in the stock of nearly all the Bell sys-
tenn operating companies.
Such an interlocking relationship
suggests the possibility that the va
rious operating companies may be
compelled to buy from the Western
Electric Company regardless of price
advantages offered by competing COM
panies engaged in the manufacture Of
telephone apparatus.
Mr.. Cox's view of the relationship
between these companies is that the
American Telephone & Telegraph
company. through it's ownership of
the stock of the Western Electric
Company, dominates the telephone
| manufacturing industry in behalf OF
the telephone service of the country
instead of letting the telephone man
ufacturing industry dominate the sit
uation both as to prices for materials
and as to progress in the industry.
The result, according to his testf-
mony. Is that the Western Electric
Company not only sells to the various
Bell companies at lower prices than
they could buy from independent man.
ufacturers, but gives quality and
service that could not be obtained
elsewhere.
His Job. as he described 1t. was to
act as sort of liaison officer between
the various associated Bell companies
and the Western Electric Company; to
be a critic of the Western Electric
Company, if necessary, in order to as
sure low prices, standard quality and
shipments made in accordance with
agreements.
During 1928 the New England Tele-
phone & Telegraph Company purchas-
ed from the Western Electric Company
manual telephone apparatus and lead
covered cable costing S9,153,444. Mr..
Cox checked the various items repre-
scented by this volume of material with
comparable items made by competing
manufacturers and figured that these
purchases, If made from independent
manufacturers, would have cost $1O,-
39S,794, or 1851 % more than the West
ern Electric Company charged the New
England company for them.
He stressed the value of the supply
contract with the Western Electric
Company, not merely as dependable
sourse of supplies and equipment I'M
der normal conditions, but especially
in emergencies. He described its eff
damage has resulted and when imme-
date rebuilding of lines is vital to
communities. Under those conditions,
the resources of it's manufacturing or
gaRization at Hawthorne, Ill, and OF
it's "a supply houses scattered all over
the United States, are consolidated in
behalf of the afflicted area. Prices Tor
! materials furnished under emergency
conditions do not vary from those
charged under normal conditions.
Profiteering is not permitted.
He concluded his testimony with an
estimate of the value of this Western
Electric supply contract to the New
England Telephone & Telegraph Com
pany for the year 1924. The purchases
of telephone apparatus, cable and sup
plies aggregated S16.000.000. The saw
ings under the contract amounted, he
said, to 1857 or s2,043,00
Robert L. Estabrook, general traffic
manager of the New England Tele-
phone and Telegraph Company, follow
ed Mr.. Cox as a witness and testified
to the benefits received by the traffic
department Of the New England COM
pany, Of which he is the head, from
the advice and assistance furnished his
department by the general staff of the
American Telephone & Telegraph Com
pany. Evaluating these benefits in de-
tail, he estimated their worth to the
traffic department in the State of
Maine at s5S,000 year.