Evening star., 1932-09-07
ARGUMENTS BRING
TELEPHONE RATES
HEARINGS TO END
Roberts, Utilities Counsel,
Says $23, 1885, 900 Valuation
Is Generous Figure.
HOLDS SUBSTANTIAL
REDUCTION POSSIBLE
Depreciation Views at Odds With
Those of Van Orsdel-Hear-
ings Started June Is.

The telephone rate hearing before
the Public Utilities Commission con-
cluded today after the commission had
listened for three hours to closing argu-
ments from the Chesapeake & Potomac
Telephone Co. and from its own lawyer,
William A. Roberts.
Roberts started with one-hour speech
in which he claimed a valuation built
up by his witnesses of approximately
$23, 1S3, 900 was generous and that a s
per cent return on this would admit of
q substantial reduction in rates. He re-
Trained from any suggestion as to the
rates to be used, question which has
been Stunned throughout the hearings,
which started June Is.
He took up the various sections of the
valuations, and, with respect to each,
sought to show the commissions figures,
taken in the main from the company's
books, represented generous allowances
above those which would be found on
regular valuation case.
Dwells on Depreciation.
He dwelt particularly on the subject
OF depreciation, which represents the
main bone of contention. The company
claims the depreciation to be deducted
in order to arrive at the present value
of the property Is simply the wear and
tear on the property and that in the
property there Is no inadequacy or OBJ
solescence. The commissions witnesses
contend that when, for instance, a
manual type exchange is about to be
replaced by dial type exchange the
value Of the manual exchange ap-
proaches zero by reason Of inadequacy
and obsolescence and in some OF the
exchanges the depreciation written of
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than 90 per cent
Mr.. Roberts said this was proper,
since based on the company's own ex-
perience 1t was a known fact that the
exchanges would be replaced and that
accruals had been made in the depre-
citation reserve in anticipating the re-
tirement of these exchanges.
He also claimed that charges made by
the Western Electric Co., an affiliate
of the American Telephone & Telegraph
Co.. to the local company for central
office equipment were too high and rep
resented the only increasing price in
dices in a time Of falling commodity
prices.
Van Orsdel Scores Roberts.
r. A. Van Orsdel, chief counsel for
the telephone company, in reply, said
Mr.. Roberts remarks on the subjest Of
| Western Electric prices amounted to a
charge of fraud, which was unsub-
stantiated by any evidence in the record.
Van Orsdel claimed the deduction TO
be made for depreciation was the actual
depreciation observed by an engineering
inspection. He claimed the company's
figure Of $36,149, 400 was nearer to rep
resenting the fair value of the property
than the commissions estimate.
Van Orsdel concluded by reading
from a petition recently presented by
the commission to the District Supreme
Court for instructions to be used in
valuation cases, the statement that the
commission was in doubt as to the ele-
ments Of value to be considered. Al
though the Commissioners told the
court they were in doubt, he said, they
were seeking to press those very ele-
ments against the company. He asked
that the case be dismissed.
George p. Hoover, associate counsel
for the company, began his argument
shortly after noon, opening with
statement that although this case is
supposed to be a rate case, it has
really been tried throughout as a valu-
alton case, and the commission has
by the United States Supreme Court
and also in the public utilities act in fix
ing the company's valuation.
Peoples Counsel Richmond B. Keech
was given 80 minutes to reply to the
legal objection raised by Mr.. Hoover,
after which the hearings were recessed.
There will be q delay Of several days
before any final order Is expected.