Worcester Democrat and the ledger-enterprise. (Pocomoke City, Md.) 1921-1953, 1925-01-03
Public Service Commission De.
cides Present Income Fair
Remuneration
COMPANY FILES APPLI-
CATION FOR INJUNCTION

The battle between the Chesapeake
G. Potomac Telephone Company and
the Public Service Commission has
come to an end; the former meets de-
feat.
The point at issue was the effort of
the Telephone Company to secure a
raise in its rates, claiming that the
return from rentals did not give a
fair profit on fair valuation of its
property.
But the Commission differed, and
stated "that, taking into account all
he elements which ought to be con-
sidered in his case, the commission
finds sthat the net revenues derived
by the owners of the Chesapeake &
Potomac Telephone Company of Bal
timore City, from the operation of its
property, constitute a fair return up
on the fair value of that property"
This was fiat denial of the company's
contention and settled that point.
The Commission also sought to es-
tablish the inter-corporate relations
existing between the Chesapeake &
Potomac Telephone Company and the
American Telephone and Telegraph
4 Company, the latter being, in the O.
pinion of the Commission, the real
party at interest in rate making in
this State.
In, the opinion handed down by the
Commission, they seem to have reach
ed a definite conclusion regarding this
relation and expressed themselves as
follows: "In the testimony submitted
one fact stands out above all others.
It is that the Chesapeake and Potom
ac Telephone Company of Baltimore
City is an integral part of the Bell
System; that it is dominated absolute
ly by the American Telephone and
Telegraph Company, which owns all
it's common or voting stock and which
is the real party at interest in these
proceedings; that all the net revenues
of the Chesapeake and Potomac Tele-
phone Company of Baltimore City,
and much of its operating costs, flow
directly or indirectly into the treasury
of the owning company, and that as
separate entity the local company eX-
lists only for the purpose of obtaining
rates which it asserts are necessary
to yield fair return on the fair value
of the property held in it's name"
The testimony of the Company was
attacked at points as being mac
curate; and, with regard to cost of
buildings, the Commission said that,
"the testimony in the case reveals
the fantastic character Of the basis
for some figures. The experts pre-
suppose a set of conditions which new
er have existed and are wholly imagi-
nary. Expenses which have already
been paid for out of rates are repro
duced as part of capital expenditures.
Moreover, many of the figures sub
mitted were admittedly inaccurate.
This inaccuracy is clear and definite
in the testimony of the company's ex-
pert witnesses as the cost of repro
duction of buildings. The given cost
to reproduce the buildings outside of
Baltimore, and particularly on the
Eastern Shore of Maryland, is such
that any man with the most elemen-
tary knowledge of building costs
would know it to be erroneous. This
was brought out by witnesses for in
eterests opposed to the increased rates.
The company's experts answered this
testimony by stating that while the
costs given for the reproduction OF
the buildings outside of Baltimore
might be too high, those given for the
reproduction of buildings in Balti-
more were too low, and that while
both sets of figures might be inaccu-
rate in themselves, the average would
be fair. But the fact remains that
they are not accurate"
The present rates will therefore re-
main in force till 1926. = What the
company's next step will be is not APP
parent. 1t was thought that possibly
thew would seek to enforce the pro-
posed rates regardless of the decision
of the Commission; but in the opinion
Continued on Page 81