Evening star., 1932-09-29
Justice Peyton Gordon Is Ex-
pected to Decide on Case
by Tonight.
SUSPENSION OF RATE CUT
ORDER BY BOARD SOUGHT
g. P. Hoover, Counsel for Company
Charges 10 Per Cent Slash Is
Equal to Confscation.

pItule SOulL Will OcIl0c ldtC loNoJ oA
tonight whether to stay the order CT the
Public Utilities Commission reducing
telephone bills by 10 per cent.
Justice Gordon took the Gaze under
advisement this afternoon after hearia5
arguments on petition for a temp2rsry
restraining order filed by the Ci'esa-
peake g. Potomac Telephone Co. asking
that the commissions order be sus-
pended until petition for a final in
junction could be heard On its merits
Counsel for the telephone company
urged Justice Gordon to decide the case
today. since the order becomes effective
On bills rendered for service after to-
ncrroW.
At the session today, George P Hoo
yer, attorney for the telephone COM
pany argued that the order amounted
to a confscation of his clients property
by reducing its earnings to "A per cent
on S36,000,000, which he said was the
true value of it's properties.
William A. Roberts, arguing for the
Public Utilities Commission, pointed out
the commission had found a maximum
value of S29,860,000 and said at most
the company stood to lose 100000 psr
month for few months pending the
time when the case can be heard on its
merits.
Mr. Hoover, in two-hour address
claimed the cut would result in gross
less of S415,O0O and a net loss of s315,
600 year, in the face of falling reve-
nues. This, he said. was confiscating
the company's property without due
process of law" which is guaranteed to
1t by the fifth amendment to the Con-
stitution.
Says SO Per Cent Was Earned.
Mr.. Hoover said the company is en-
titled to earn per cent on claimed
valuation of $4,000, ,0G0, but that, in
the II months ending June 30, last, it
had earned only SO per cent, and the
10 per cent cut would reduce this to
"A per cent. In the first eight months
of 1881, the company gained 4,800 new
subscribers and in the corresponding
eight months of this year it lost 1869
subscribers. with an accompanying loss
in revenue, he said.
He also attacked an order issued by
the commission shortly after its rate
order, in which the company was in
structed to credit its depreciation re-
serve with per cent interest each
year, which would mean approximately
$4,000 a month less could be charged
as operating expenses. He said this
matter was governed by the Interstate
Commerce Commission, and II the COM
pany obeyed the local commissions
order, 1t would be subject to penalties
imposed by the Interstate Commission.
r. A. Van Orsdel and Baxter Milne
appeared with Mr.. Hoover as lawyers
for the company.
Ridicules I. C. C. Reference.
Mr.. Roberts began his argument
shortly after noon by stating the de-
probation order would result in no in
Jury beyond the possible cost of some
black ink for the transfer OF a set OF
accounts.
He said Congress had given the local
commission exclusive power in this
field, after passing the pertinent sec
tions of the interstate commerce act.
Mr.. Roberts said that all the court
had before it was the finding OF the
commission and group of afidavts
from company witnesses, which con-
tain matter already carefully considered
by the commission in reaching its de-
cision. He said the court ought to
give weight to the finding OF the COM
mission unless the company came for
ward with something much more sub
stantial. He cited numerous decisions
to support this point.
Objects to Court Action.
The commission in its statement yes
terday took the company to task for
going to court about the rate reduction
and placed the blame for any delay in
reducing rates on the company.
The statement revealed for the first
time that in the preliminary negotia-
tions, before the case got to public hear
ings, the commission had offered to set
up a sliding scale of rates based on an
agreed valuation, apparently similar to
the one in force until recently governing
electric rates. The company declined
to compromise.
The statement followed one by the
company showing reduction in net
revenues of S121,235 in the first eight
months of 1882 in comparison with the
corresponding 1881 period. The COM
mission statement follows:
The Public Utilities Commission had
hoped that the telephone company
would comply with the order reducing
rates for exchange service by 10 per
cent. Instead, the company has seen
fit to appeal to the courts, thus starting
what may be a long g-drawn-out legal
battle, the outcome of which, OF course,
is problematical. One thing is certain,
however: If, as seems probable, the court
enjoins the commission from enforcing
the order the relief sought for the rate
payers will be long delayed.
Believes Cut Justified.
"The commission did all in its power
to avoid this court proceeding. 1t be-
lieves the telephone company IS well
managed, that the service given is excel
lent, and we tried cur best, in numerous
conferences with the officials of the
company, to induce them to consent to
a moderate lowering Of rates, which We
believe to be thoroughly justified by the
earning record Ct the company and by
present economic conditions.
I'VE cited the example of the gas COM
panies, which, after similar conferences,
did agree to such rate reduction. We
proposed, as an alternative. sliding
scale of rates, to be based upon an
agreed value Of the companys property,
to remain in force for a limited period.
1T was attempted to treat this mat
ter as a plain business proposition and
to deal with it in a businesslike man
ner
The telephone company fatty re-
jected every proposition advanced by
the commission and, although the order
finally issued is believed to be eminently
fair to the company, it has chosen to
resist its enforcement This Is re-
GREETED.
We are still convinced that there is
ample justification fer the measure OF
relief which was ordered and. further,
that this could be granted without detri-
ment to the telephone company, which
could continue to pay all of its charges,
q reasonable dividend, and this without
impairing the service, without decreas-
ing the number Of its employees CT the