Evening star. [volume] (Washington, D.C.) 1854-1972, 1942-11-22
Government SEEKING
Cut in Charges for
long-Distance Calls
A. T. & T. President Says
Move Would Increase
Burden on Wires

ey the Associated Press.
.. The Government called yesterday
tor second reduction in long dis
>ance telephone charges.
American Telephone & Telegraph
Co, the Nations largest corporation,
was ordered by the Federal Com
munications Commission to show
why it should not substantially re-
duce toll rates and other charges in
the face of commission figures in
dlcatlng excess earnings of $47,OOO,-
600 to $62,0000O0 this year. A hear
Ing was fixed for December 16.
Declaring that the earnings which
1t held excessive were reflected
heavily in both the cost of the war
and living costs, FEC Chairman
James Lawrence Fly said that "the
Government must make every effort
to keep down its bill for the war and
to help the consumer keep down his
expenses"
In addition to defending its
charges. A. T. & T. was ordered to
snow why an immediate reduction
In rates pending conclusion of the
investigation should not be made.
Clifford Issues Statement.
Shortly after the FEC order was
Issued, Walter S. Clifford, president
OF the A. T. & T., issued the fol-
lowing statement:
Il find it difficult to understand
why the Federal Communications
Commission has issued such an
order contemplating a drastic rate
reduction because under the circum-
stances it would seem to make no
sense.
The important thing is to win
the war. and the commissions pro-
gram will interfere with our service
which is vital to the war effort.
with our lines overloaded, we are
having hard time to handle the
calls we have now and we can't
get the materials to handle more
neither is there manpower to spare
to handle more. At the urgent re-
quest of the Board of War Com
munications, We are spending mil
lions of dollars in advertising to get
the public to reduce its use of long
distance, and now comes the COM
mission seeking to reduce rates
which will do just the opposite. I
TAIL to see how by any stretch of
the imagination reduction in long
distance rates will help win the war.
The company, therefore, feels il
must resist a reduction in spite of
the TACT that rate case would re-
qulre the time of many people who
are urgently needed to carry on tele-
phone service in these critical times,
AS to long lines earnings. the
commissions figures are misleading
because they do not include all taxes.
Our earnings as whole, including
long distance business, are Substan-
TALLY lower than last year and are
short of the dividend which we have
paid for the last % years"
Some Charges Reduced.
The FEC began an investigation
OF long distance telephone tolls of
the Bell System-by which A. T.
IL It's $5,O0O,0O0,00O properties are
commonly knoWn-early last year,
which resulted in rate reductions
estimated to save approximately
$14,000,000 year. At that time
charges were cut for most daytime
calls of IA to 1880 miles, rates
were reduced for person. to- person
calls longer than the initial three
minutes and certain report charges
were eliminated.
In announcing the new investiga-
ton, the FEC said the hearing would
cover not only long distance rates
but all charges, classifications, prac-
tlces and regulations of the corpora
TONS long lines department..
War demands have taxed long
distance telephone facilities to the
point where priorities system is
IN effect to insure prompt handling
OF urgent calls.
A. T. & T. directors voted the
usual 1925 quarterly dividend
wednesday in 9 ast-minute deci-
sion which followed speculation
that a reduction might be made for
the first time since 1922 because of
higher Federal taxes. The company
has around 235,OOO stockholders.
In its formal show cause order.
the FEC said that A. T. & T. rec
ords showed earnings, before Fed
eral income taxes, at an animal
rate Of more than "a per cent on
the book cost of its investment. It
prepared table showing that dur
ing the first nine months of this
year the company handled 100 892.-
600 LONG =diStanc couc nor,ana.a