Evening star., 1938-04-20

CLIFFORD AS$A|LS
A. 7. & 7. REPORT
Telephone Firm President
Hits Rate Cut Study as
MisIeading.'
BY the Associated Press.

NEW Iotth, April ZU.-WAlJer' =.
Clifford, president of American Tele-
phone & Telegraph Co., repeated to
stockholders at their annual meeting
today in stronger language his April
! criticism Of Federal Communications
Commissioner Paul Walkers "one-
man" report on the investigation OF
A. T. & T.
Mr.. Clifford described the report
in which Walker had said telephone
rates could be cut IS per cent with.
out interrupting existing net earn
ings'-as incorrect and misleading" j"
He said:
THE investigators, in attempted
support of unfair or erroneous asser-
tions, employed selected facts while
ignoring other and controlling facts;
they impaired to tentative Office men,
oranda prepared for purposes of pre-
llminary study or discussion the
authority of final declarations of
company policy; they related docu-
ments to circumstances other than
those under which they were pre-
pared or used or To which they we're
addressed. they drew and stated ut
terly unWarranted inferences and pro-
fessed and urged illogical and unfair
conclusions"
Mr.. Clifford said that although the
company had assumed they would
have the right to cross-eXamlne wit
nesses, they were not permitted to do
SO, and that although they had been
called upon originally to produce in
formation, they were not allowed TO
present evidence of our own"
He added:
THE record of the investigation is
a record, not Of impartial investiga-
tors, but of partisans and prosecutors
The information assembled is neither
accurate nor comprehensive
He pointed out that the full COM
mission of seven members has not yet
returned It's formal report to Congress.
Number Of Phones Gain.
Despite general slowing up of busi-
ness, Clifford told the stockholders:
We continue to gain in the number
| of telephones. During the first two
weeks of April we have gained $4,000
telephones. but the number of toll and
long distance conversations continue
to be somewhat less than the CORE
spending period of year ago
With wages and taxes higher cur
rent earnings are somewhat lower.
Bell System earnings for the three
months ending February %, 1888. were
at the annual rate of S716 per share.
Earnings for the II months ending
February %, 1898, were 1891 per
share"
He said taxes for the Bell System
were running about nine million dol
lars higher for 1888 than in 1887 Bell
system taxes, he said, are over 50 per
year per telephone and more than 81
per share Of common stock. The cur
rent tax bill of some Sl45,0 100000 a
year, he added, is about 100000 0OO
greater than in 1880 and is equal to
over one-third Of total pay roll ex-
pense
The figures given. he said, do not
include taxes imposed upon users of
telephone service.
AS previously reported, the system
gained about $4,000 telephones dur
ing the first quarter of 1898, during
which the number of toll and long
! distance conversations was 2l2 per
| cent less than for the corresponding
period last year.
The directors Of American Tele-
phone at their meeting today elected
William H. Harrison, president of
the American Institute of Electrical
Engineers, as A. T. e. T. vice presi-
dent and chief engineer to succeed
Bancroft Gherardi, who is retiring
at the age of 65.
Some 500 stockholders were present
in person and engaged in considerable
discussion with Clifford. particularly
about the Walker report.
Alton S. Hayward. a Brooklyn
stockholder, asked whether earnings
could be maintained if rates were
reduced by 25 per cent.
The commissioner CWalker) says
they could Mr Clifford replied, add
ing, after a round of laughter:
There would be no earnings"
Voice Vote on Motion.
A resolution introduced by Edward
M. Young of MorristoWn, N. j.,
and adopted by voice vote, respect
fully but emphatically" protested the
method in which the commission S
investigation was conducted.
Mrs. Anna Walker Church of New
York said the 100000 women stock
holders of the telephone company
ARE going to make certain they are
not caught in the trap of rate reduc-
ton" while another New York stock
holder, j. Newcomb Blackman, arose
and asked:
F., DO you think We got square
deal?"
His question was answered by a
loud cry of No
| Mr.. Hayward asked Clifford if the