Evening star., 1927-04-18
COMPANY FIGHTS
PHONE RATE CUT
Arguments Before Utilities
Body Expected to Cover
Long Period.

The Chesapeake & Potomac Tele-
phone Co. opened its fight TO prevent
a reduction in telephone rates in the
District, at public hearing today be
fore the new Public Utilities Commits
sion. The arguments are expected to
cover a long period. in view of a wide
difference in the valuation claimed by
the company and that fixed by the
commission for rate-making purposes.
4 reduction lower than S4.75 a
month on unlimiteds service is pro
posed by the commission. The $i.15
rate was ordered by the commission 10
become effective in June. 1925, but
telephone subscribers are still paying
| the former rate of IS a month because
of litigation which is sti1ls pending in
the District Supreme Conrt.
The initial session was taken up
chiefly by the presentation of exhibits
by the commission and the company.
+. Mex. Bachnlan, chief accountant
for the commission, submitted four,
showing that the commission is con-
tending that the company in 1926
earned S15T,900 in excess of the per
cent allowed on a rate base which it
li4Nh Ct R1Ust9bs sSEbs anu ilttt q luA NICi
reduction could be made without deny.
ing the company a fair return. The
company, in its own exhibits. however,
claimed a valuation of $50, 0,226. .49S,
based on reproduction costs. or 50, 9,103.-
022 above the commission
Certain Items Excluded.
The difference in the vaua tion is
due to the exclusion by the commits
sion of certain items included by the
telephone company in its valuation
claim. The commission did not allow
items of S693,0 900 for land used and
useful, $1,1S9 900 for buildings, S55. .156
for a radio broadcasting station,
$3.704 900 for going concern and over
head values. S2,S31,417 for deprecia-
tion, S1S3 900 for working capital. aud
$445. 900 for construction work and
progress.
A question arose at the outset of the
hearing as to whether Maj. w. i. r.
Covell. acting Engineer Commissioner
in the absence of Lieut.. Col. J. Frank
lin Bell is qualified under the law to
sit on the commission. Ralph +.
Fleharty, peoples counsel before the
commission. explained that Corpora
ton Counsel Francis III. Stephens had
EiNth <til ODIlipii W tiAC EiLNNt LictL
Mai. Coyeu is qualified. but said that
he was not anxious to proceed with
the hearing If the telephone company
intended to contest the decision.
Attitude on Coyell.
George T.. Hoover, who, with Dozier
A. Devane, compose the company s
counsel at the hearing. offered no OBJ
lection to Mai Covell serving as a
Public Utility Commissioner at the
initial session. but pointed out that the
company would present it's veiws on
the question at q subsequent hearing.
Steps to reduce telephone rates
were first taken by the former com
mission last Fall but for various rea-
sons the hearing has been repeatedly
delayed. The first postponement was
due to q technical objection raised by
the company to the commission pro-
ceeding with a new rate case with one
still pending in the courts. The conf
mission later was given authorization
by the court to proceed with the hear
ing, but because of the imminent APP
pointment of a new commission, the
case was again deferred.
Back III 1925 when the commission
ordered a reduction from $5 10 $4.75
in the unlimited service rates, the
company prevented them from being
put into effect by obtaining a tempo
rary injunction from the District Su-
preme Court. The injunction was
argued last Summer before Chief
Justice Walter I. Mccoy. but he has
not yet handed down an opinion on
the case, which involves principally
the question of valuation.
The hearing, after about hours,
n IisxH4t 1ad To 11 al iV1y0.
next month, the date tentatively set
beine Nav @