Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-02-12
HOLDING COMPANY
PROFITS BY FEES
Example of A. T. ct. Cited to
Show Method of Raising
Revenue.
BY JOHN r. SINCLAIR.

|
Special Dispatch to The Star.
NEW YORK, February 1.-THE
American Telephone g. Telegraph Co.
| Is the daddy Of more than twoScore
subsidiary operating companies.
Five years ago the A. T. g. T. charged
management fee Of Az per cent of
the gross revenue for its various serv-
ices, which included law, engineering.
financial accounting. scientific research
ana the use OF telephone instruments.
But the different public service COM
missions objected to the charge as ex-
cessive.. So the parent company has
reduced the fee in five years from
AZ per cent to ~ per cent. Some
| State commissions still object to the
present fee as excessive.
This percentage is on the gross BUSH
ness. If $100,000,000 is received by
the telephone company the parent COM
pany gets $l,500,000 for its services
during the year.
These management fees help to
make the American Telephone 81 Tel
egraph Co., which is the real company
interested In rate cases, powerful, pros
porous and rich, but its operating COM
panies, such as the New York Tele-
phone Co., plead for higher rates be-
cause OF poverty.
This is not an unusual situation
in the public utility field. It's Gus
tomary proceeding with most holding
companies.
Holland is adding Z per cent more
to its total national area by reclaim
ing the rich Zuider Zee land Of $50, 900
acres upon which It expects to pro-
vide an ample livelihood for another
SOC, 900 people.
It was Simon Stevin, famous mathe-
matician, who first suggested the rec
lamation of the Zuider Zee. Two hun
| dred years went by before anything
was done. Then, after the World War,
the Netherlands Parliament voted to
begin on the plan worked out by Dr.
Cornelius Lely, drawn up more than 80
years ago.
Five years ago the work began. A
massive dixie 10 miles long, the longest
ever conceived, had to be constructed
Thousands of citizens of Holland have
been at work for years on the am
bilious project which will cost about
500 100000.
It's not the size Of the country, but
true that counts. not only with individ-
uals, but with nations.
Amsterdam has long been the dia-
mond-cutting center Of the world, with
its 800 firms employing about 1000
skilled cutters.
Since November conditions there have
been quiet. The big diamond orders
from the United States began falling
of then and Amsterdam workers felt
the decline Immediately. In December
working hours in the factories there
were cut one-half, with the diamond
cutters In other cities, Antwerp par
ticularly, following suit. Unemployment
on large scale has resulted.
The Amsterdamsche Bank, reporting
the situation, says that during the
past so years a depression in the dia-
mond-cutting industry has occurred
almost with mathematical regularity"
every seven years.
The American market is believed to
absorb more diamonds than all OF the
rest Of the world together. So every
rise in the New York Stock Market is
front page news in Amsterdam.
Already the United States Govern
ment has spent $3.50, 900 on a helium
plant at Amarillo, Tex. An additional
expenditure of $486,000 has been au-
thorized. When completed, the cost
will exceed 100000.
But for some reason, so far not dis
closed, the Navy Department has de-
cided to buy its helium from a private
company at $35 thousand cubic feet
instead of from the United States Blu
reau of Mines, which is operating the
Amarillo plant, for $12 a thousand. AS
result, the Amarillo plant has been
shut down.
But Representative Harry Englebright
of California is curious. He wants to
know why it isn't wiser for the Gov
eminent to buy helium at $12 than for
$35, and thus keep its 100000 plant
in operation.
Lots of other people would like to
know, too!
Europeans are constantly talking
about the Americans as being CONNER
cially- minded. They admire their big
heartedness, their youth, their heroism,
their courage, but say with shrug of
the shoulders, But so commercial"
Most Europeans think money is the
ruling passion of America. with every
activity of American business directed
to that end.
owen Young chairman of the Cen
eral Electric. a frequent visitor to Eu-
| world, made this statement recently:
by and large, think the American
business man cares less for money than
the business man of any other coun-
| try"
! My personal observation, covering %
countries, confirms this opinion.
| Copyright, 1880, by North American News
| paper Alliance1