The Indianapolis times., 1929-12-11
PHONE RATE
HIKE BLASTED
BY SINGLETON
Terre Haute Patrons Will
Be 'Gypped,' Charge of
Commissioner.
MAJORITY OPINION HIT
$66,672 Excessive Returns
Given Company, Says
Dissenting Official.

Patrons of the Citizens Indepen-
dent Telephone Company of Terre
Haute will be paying toll on S404,-
1876 of excess value and these tolls
will bring the company $66,672 an
nually in excessive returns.
This contention is set forth in
an opinion today by Commissioner
Frank Singleton Of the public service
commission. He dissentS to the
rate increase order passed to 2,
last Friday.
Commissioner Calvin Mcintosh
also filed an objecting opinion,
setting out that the new rates are
"unduly high and work an un-
warranted hardship on the public"
Mcintosh, who heard the rate in
crease petition, prepared an order
granting a few increases, but it
failed to pass. Singleton alone
supported it. He prepared another,
granting the higher and more num-
erous rates, but Chairman John w.
McCardle of the commission told
him that he had written one
himself.
Attacks McCardIe Order
The McCardle order was approved
by Commissioners Howell Ellis and
Jere West. 1t is this order that is
attacked in the Singleton opinion.
1.-THE order in this cause" Single
ton sets out, permits allowances
for capital account to enter into fair
value as rate base in excessive
amounts as follows: Cash working
capital excessive by $2O,00O work in
progress by $184, ,736, and going con-
Germ value by 100000.
upon this amount the order au-
thorized a per cent return amount
ing to $28,331 per year"
Continuing, he points out that
instead of per cent is allowed by
the McCardle order on depreciable
property and holds that per cent
would be ample.
Amortization Attacked
Amortization of $4,000 over ten
year period also is attacked and
Singleton holds that this matter
should have been handled when the
plants were combined nine years
ago.
This allowance has no justifica-
ton in equity or in practice at this
time" his opinion reads.
Use of the company's depreciation
reserve since 1925 then is cited, and
the opinion points out that $398,386
was expended in 1927 for retirement
of central office equipment and
other items included in the amorti-
zation.
The company does not come in
with "clean hands" the opinion con-
tinues, and cites that it has failed
to comply with the Act of 1925 In
regard to building up a depreciation
reserve.
Called Wrong in Principle
Excessive returns are listed as fol-
lows: Rate of return, annual excess,
$28,33152; depreciation reserve, an
nual excess, $27,689, and amortiza-
ton for a duplicate property, $10,-
652.14, making total in excess of
$66,672.66.
''I believe that this order is wrong
in principle" the Singleton opinion
concludes. "It does not protect the
patrons as it should protect them
in the preservation of a fair rate for
service rendered. The company is
prosperous to a desirable degree ur-
der the rates as they existed at the
time of filing this petition.
RATES at that time were as high
as they should be, and the only ex-
cuse for increasing them is that the
estimated cost to reproduce the
property today, deprecated, fur
nishes higher figure as a rate base
than any other evidence of value
would furnish.