Evening star., 1926-09-15
LEGAL POINT HAL!S
PHONE RATE MOVE
Company Holds Commission
Cannot Seek Further Cuts
With Case Pending.

A legal point raised by the Chess
peake and Potomac Telephone GO,
temporarily halted the move Of the
Public Utilities Commission today 80
consider proposed reduction in teie-
phone rates i'm the District
George y. Hoover. counsel for I'll"
company al the outset of the public
hearing on the rate case in the board
room of tho District Building. argued
that the commission is without tho
power or authority To make either an
lnVeStiGa Ion of or order revision IN
the telephone rates pending the out
come "f tho reValuation case now he
fore the District Supreme Court Tn"
attorney based his argument on -
similar ease involving the Potomac
Electric Power CO.. in 1920. when the
commission itself ruled that it was
without authority To change the eleC-
tric current rate u the face of an
injunction without authorization bF
the court. lie pointed out that u
would he an unlawful precedent for
the commission now to proceed &"
modify existing telephone rates with
out authority from the court.
DoZier \. DE Nane. general Coun-
sol of the telephone company, advised
Mai. w. f.. X. CoveIl. senior Assistant
EnSineer Commissioned assigned
10 public utilities at the UioSe OF ttl-
hearing that the company would "f-
fer no objection to the commissions "t'
tanning Il modification of the cxiStiu-
injunction tO allow Il hearing ON ~"
rate reduction case.
Stephens Opinion Asked.
As result of this contention. IT,"
commission abruptly closed tho hca"
ing and instructed Corporation COM
sci Francis II. stephens To file writ
ten opinion on the question involved
1t will be several days. possibly l"n@-
er, before Mr.. stephens opinion !"
reported. The telephone rate case, rs
far as the commission Is c"ncelHri,
will rest on his decision. The les"
point raised by Mr.. Hoover took III"
commission by surprise. aS Wei aS
representatives of civic and trade
bodies, who were present at the hear
ing William Nick. Clayton. chairman
of the public utilities committee OF
the Federation Of Citizens AseocI1-
tions, who had been instructed 10 III
siSt that the rates be reduced I"
limit the telephone company TO
per cent return, was obliged to tell the
commission he was not prepared ="
argue the legal contention of the COM
pany. Members of the public utilities
committee of the Washington Cham
ber of Commerce. headed by Harry
King, also were forced to defer pres
entation of argument.
Reviews History of Case.
A comprehensive review of the tcle-
phone case now before the court was
given bv Mr.. Hoover as a prelude to
the legal point raised which stopped
the hearing.
''The telephone company feels that
in view of the pending decision OF the
court on the essential question oy
which the commission VIII he Suiueu
i'm its consideration of telephone rates.
declared Mr.. Hoover, ANY move 10 re-
consider it's rates by the commission
at this time will he likely to CompiCate
and delay the final settlement of the
matter. If. however, the commission
decides to go forward with the matter
the procedure followed in the Potomac
Electric Power Go. case is plainly the
only course to take
THE position of the telephone com
pany with reference to this nearing
is that the commission is without
authority to make any further rate
orders until after the court decides
the Dending case unless authority is
first obtained from the court TO do so.
'The procedure it thinks the com
mission should follow is exactly the
same as the commission held 10 ne
necessary in connection with the TO
tomac Electric Power Co. case. w ME
that case was pending in the court
the Potomac Electric Power 20.
asked the commission for an increase
in it's rates The commission ruled
that it the commisSiOn) was without
authority to pass any order modify
ing or changing the rates of the Po-
tomac Electric Power CO., in the face
of the Injunction which had been
granted by the court until the court
should authorize the commission 10 10
SO The Potomac Electric Power 90.
then aDDIied to the Supreme Court or
the District for modification or ltS
Injunction to permit the commission
to hear and consider its application
for a change in rates. The court ap-
nroved this procedure. and made an
order which permitted the commits
sion TO consider changes in rates. but
required that any proposed changes
he referred to the court for us ap-
proval before becoming effective.
I'm this case the Potomac Electro
Power Co. showed the court that be-
tween 1917, when the original order
was made, and 1920. when the pet-
ton was filed. there had been a
radical change i'm all conditions ar
fecting their operation due to the
war"
Decision Expected Soon.
Mr.. Hoover told the commission
that a. decision in the pending rate
case is expected to be handed down
bv the court soon after it convenes in
October.
The history of this case as out
lined by Mr.. Hoover showed that on
October 16, 1924, the Utilities Com
mission called n public hearing for
November 10. to consider reduc-
tion i'm the rate. At that hearing the
commission determined that before
proceeding in connection with the
rates, the company should be. per
mitted to offer evidence to show the
necessity for a revaluation of its prop
erty. and thereafter having received
such evidence, the commission deter