Evening star., 1934-06-15
REFUND0F $7a,711
FOR. PHONE USERS
IS ORDERED HERE
Court UphoIds Utilities Body
Ruling on 10 Per Cent Cut
in. October, 1882.
REDUCED YEARLY COST
TO PUBLIC is $500, 900
Company Still Has Right Of Ap.
peal From Decision by
Justice Adkins.

!. Refunds amounting to $786,7ll are
due subscribers of the Chesapeake &
Potomac Telephone Co. on bills paid
since October 10, 1882, under a deci-
sion rendered late yesterday by Dis
trict Supreme. Court, approving the 10
per cent rate slash ordered by the
Public Utilities Commission.
The ruling also provides for an an
nual reduction In telephone charges
for all local subscribers. except those
having private branch exchanges, for
the future, of about $500 900, provided
the lower court decision Is not upset
by a higher court upon appeal.
These estimates of the effect of the
long-awaited action on the contest
waged against the commission reduc-
ton order by the telephone company
we're given today by william A. Rob-
erts, peoples counsel, who represented
the commission and the public In the
litigation.
Average Saving 50 Cents.
When the reduced rates 60 into
effect it will mean an average saving
Of about so cents a month to consum-
ers, District officials estimated today.
The present rates are $4.75 for unlim-
tied private phone service; 81 for
business and private lines limited to
so calls q month. and $2.50 month
for two-party lines.
Actual slashing Of the rates and
the payment of the refunds, however,
would. have to be withheld pending
an appeal Of the case to the District
Court of Appeals, II such a move is
made by the company. Whether the
company will take the case to the
higher court had not been announced
today.
The utility concern has posted bond
to cover the refunds which have ac-
crued since the cut was ordered
Justice Jesse C. Adkins, who heard
the case In District Supreme Court,
found the rates charged by the COM
pany were "unreasonably high and
unjust and that the rates fixed by
the commission order were reason
able. Just and adequate"
The commission victory, however.
was NOT complete, for the court re-
jected one order which directed the
company to credit monthly to its de-
probation reserve an amount equal to
per cent interest upon its balance
in that account. The depreciation re-
serve is an accounting of charges
made upon telephone users for re-
Placement Of property of the company
as 1t becomes wcrn out.
Would Have Been S33o,0oe.
The practical effect of the depreci-
alton reserve interest order would
have been to reduce the annual
charges made by the company for de-
probation by an amount equal to the
proposed interest credit, which would
have exceeded $330,000.
On this point Justice Adkins held,
in sustaining an appeal by the com-
psny: Il think it is clear that by the
transportation act of 1920 amending
the Interstate Commerce Act, Con-
gress clothed the Interstate Com
merce Commission with authority to
H. rates of depreciation and to pre-
scribe the character of accounts to
be kept by It," He made the point
that the rules Of the Interstate Com
merce Commission do not call for
such an interest credit on a deprecia-
ton reserve.
The court arrived at its own de-
cision as to fair value for the tele-
phone property used in local telephone
business, different from that COM
puted by the company or the COM
mission.
Justice Adkins decided that the fair
value Of property properly allocated
to company intrastate, or local, busi-
ness during the year 1898 was s6.41
per cent of the entire value of the
company property used that year, or
Commission arrived at a figure Of
$26,2ll,S53 for q comparable state
ment Of value, while the company
claimed value Of s34,593 900.
Working Capital Fixed.
The commission was sustained in a
number of important sections of its
figures on valuation. The company
had inserted in its valuation claim a
figure OF $l,l73,000 as working capi-
tai, but the Public Utilities Commits
sion figure of $S5o. 900 was sustained
by the court.
Justice Adkins allowed $2,500 900
for going concern" value for the
property Of the telephone company.
The company had entered claim
for 100000 as the intangible value
Of the concern since it was, in sue
cessful operation. The commission,
in arriving at its valuation figures.
gave consideration to going concern
value. but made no specific finding
on this point. The United States
Supreme Court has ruled that going
concern" value must be considered.
The commission scored decided
victory In the decision on the amount
to be determined for depreciation al
lowance; that is, the amount to be
deducted from the figure arrived at
as the cost of reproducing the utility
property. This is an important point
in arriving at the fair value" f1gure
on which rates are based. The COM