The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1928-11-24
UTILITIES GRIP
IS BROKEN IN
PHONE BATTLE
Commission Skaters Rule
Long in Effect, Giving
Farmers Victory.
GAS CONCERN WARNED
Told to Stand Gaff' If 1t
Persists in Boosting
Valuation.

The public service commission has
broken a monopoly upon telephone
service in an Indiana town, thereby
smashing virtual rule which has
stood almost since establishment of
the commission.
The commission in the same ses-
sion Friday issued what amounted
to another warning to utilities to
watch their valuation boosting, or to
take the consequences in the form
of rates which will not make their
capital out1ays as profitable as the
owners would desire.
1t has been the almost unbreak-
able rule Of not only the Indiana
commission, but those of other
states, to foster rnonopolies by per-
mitting mergers and then protect
them by refusing to permit new
companies to come in.
Farmers Win Fight
But Friday three members of the
commission outvoted two and as
result the Farmers Mutual Tele-
phone Company of Versailles today
has permission to extend its 1ervice
into the town of Versailles, where
the Versailles Telephone company
has been supreme, heretofore.
The Farmers Mutual company was
organized more than a year ago Ill
protest against high rates OF the
Versailles company. The farmers
asked permission to establish their
own exchange inside Versailles, but
the commission denied it, March 80.
The commission did give the
farmers permission to operate out
side Versailles. So they established
their country service. 1t was so
successful that the townspeople
clamored to get in on the good thing
and get away from the Versailles
company's high rates.
The clamor resulted in Fridays
order. Commissioner Calvin Nc
Intosh, who heard the evidence,
wrote the order. He cited testimony
showing that merchants and profess
sional men of Versailles were handi-
capped through lack of connection
with the rural district, and held that
the rural company should be per-
mitted to come in as a matter OF
public convenience.
Two Dissent
Commissioner Harvey Harmon,
who wrote the original order per-
mitting the farmers to build thetr
exchange, refused to Join in the or
der, as setting a bad precedent.
Commissioner John McCardle also
diSsented.
Chairman Frank Singleton of the
commission approved, and SO did
Commissioner Howell Ellis. The lat
ter attached a note saying that he
did not consider this a matter OF
commission policy or precedent, but
purely ruling to give relief as
shown to be needed by evidence In
this particular case.
A "howl" against the order will
be made by telephone companies
and other utilities throughout the
state, it was predicted.
The warning about valuation
boosting was contained in an order
permitting the Eastern Indiana Gas
Company to set a rate OF $1.05 "aS
all the traffic will bear" The con-
Germ had asked for greater increase.
Gives Towpr Profit
The rate set will only give a 31a
per cent profit on investment, it was
estimated, but the commission Or
der blameS the company for invest
ment increases without thought of
whether the higher rates would be
feasible in the community.
Properties of the company are at
Cambridge City, Pershing, Hilton,
Mt. Auburn and Dublin. Valuation
had increased from $176,000 to $275,-
600 through additions since Nov. l.,
1927.
"It is unfair to make investments
in extensions that will necessitate
high rates and the utility must
stand low rate in the face of such
circumstances" the order set out.