The Wilmington morning star., 1946-09-18
MORE ABOUT
TELEPHONE
FROM PAGE ONE

crease of SIPS over the present
rate Of $3.50; and business four
party line, a new rate Of $3.50, an
increase of 81 over the present
rate Of $3.50.
For Carolina Beach, sWrightsville,
and Southport, the increase sought
on business lines represents an in
crease Of rs cents for the business
individual line and an increase Of
so cents for the two-party and the
four-party business line. .
Although the company is doing
a record volume Of business" E.
H. WATSON, Carolinas manager OF
Southern Bell said, "our earnings
have dropped to a dangerously low
point, the lowest in the company's
history. This has resulted from the
fact that wages and other costs
have gone steadily upward while
rates have remained the same
for many years."
Payroll Costs
M. WATSON pointed out that pay
roll costs alone for North Carolina
had increased by So ,311,415 since
March, 1945, on an annual basis,
adding that building costs have
jumped IS to 100 per cent, plant
construction IS to go per cent, and
telephone materials Is to Is pc:
cent.
1--WE are asking now for increases
in rates that will more nearly -e-
reflect the cost of providing the
service" Mr.. WATSON said.
"That we have been able fol
many years to absorb increased
costs, without asking fo- higher
rates, is, we feel, a remarkable
achievement of which the COM
pany's management, ou- employees,
and subscribers can justly be
proud"
Investment Large
Mr.. WATSON said that the tele-
phone company's investment ir
North Carolina is $36, 500, 900, ar
increase OF SO, 900, 900 in the las
five years.
"The telephone company did not
profit from the war;" Mr.. Wassor
said, "as is shown by the fact thai
earnings declined throughout that
period and are today less than hall
of what they Wee at the beginning
of the war. For 1941, the return
was $50 per cent of the average
investment. This percentage drop.
ped point by point until in 1914;
it was only 1894 per cent. Ane
for the period of April through
July Of this year, extended on ar
annual basis, the return was only
2.70 per cent. This earnings rate
does not include any possible ta1
refunds that may be available, thi!
year only. on 1914 Federal incoms
taxes Mr.. WATSON said. I'VE have
every reason to believe that in thu
face of rising costs earnings will
continue to drop unless we &c
some relief in the form Of better
rates"
Expansion Necessary
"We must expand u facilitie!
to meet the rapid growth Of Norti
Carolina because the telephone
business is a business and socia
necessity of modern living. The
company has carefully laid plans
to keep pace with the development
Of this state. Our plans call fol
gross expenditures of approximate
ly $40, 900, 900 for construction il
North Carolina during the mex
five years. We have great conf
dence. in the future of North Caro-
lima, but in the interest of ou,
subscribers, we must protect thu
soundness of the telephone system
by having our earnings capacity
more nearly equal costs"
1.-THE rate revision we are nov
requesting is very nominal in view
Of the heavy expenses we have sus
tanned for a long period and thu
extensive building program now be
ing undertaken in the state. Thu
telephone company's policy ha
been to keep its rates as low a
was consistent with financia
safety and that policy continues
Proud OF Growth
1.-THE Southern Bell company ha;
grown with North Carolina" MI
WATSON said, land we are prou,
of the part we have taken in tina
growth. We look forward to a
expanding telephone service tina
will r e a c h more people, Great
more jobs, and promote the state
development. Reasonable earning
are, of course, essential to the al
tainment OF these detectives"