Evening star., 1949-11-30
Phone Official Links
Company Welfare 10
That Of Subscribers

. INFORMED ana ulGclllSeIlG SuO-
scribers" are aware that their well
fare in a measure depends on the
welfare of the Chesapeake g. Po-
tomac Telephone Co., an official
of the American Telephone and
Telegraph Co. declared today at a
hearing before the Public Utilities
Commission.
He was being cross-examined by
Assis ia Mt Corporation Counsel
Lloyd B. Harrison, attorney for
the PUG, in connection with the
telephone company's request for a
13 per cent rate increase to bring
the company an additional $3,-
100000 in gross annual revenues.
The official, D. r. Belcher, treas
urer of A. T. g. T.-parent organ
ization of the Washington phone
company-declared the best serv-
ice is furnished "by a prosperou.
company" in explaining that tht
subscribers welfare, protected b,
prompt and efficient service. de-
pends on the company's welfare.
Denies Discrimination.
Mr.. Harrison attempted to show
in questioning Mr.. Belcher thai
A. T. g. r. is discriminating against
Washington telephone subscribers
by trying to get relatively higher
rates here than in other parts OF
the country.
Mr.. Belcher refused to admit
the alleged discrimination, declar-
ing that other factors prevented
such simplif1cation as inferred
from Mr.. Harrison's questions.
He said rates so low as to weaken
the financial soundness of the
telephone system would not bene-
fit telephone users.
It was brought out that A. T.
& T. determines to just what ex-
tent each of its subsidiary COM
panies shall incur debt. The high
er the ratio of debt to total in
vestment, the less Federal taxes
nust be paid. The debt Of c. & p,
it was pointed out, is kept low
in comparison with other A. T.
& r. subsidiaries.
Mr.. Harrison tried to get an
admission from Mr.. Belcher that
If the debt were higher, reduced
taxes would permit lower tele-
phone rates in the District.
He wanted to, know if this did
not constitute discrimination in
favor of other companies. Mr.,
Belcher refused to admit such dis
elimination and said the ques-
tions were oversimplif1ed.
The telephone company needs
more income, but not badly enough
to double the f1ve-cent public
phone booth charge, company of.
f1cials have assured the PUG.
This was brought out late yes
terday In testimony.
The company proposal would
add rs cents q month to bills fol
unlimited phones and so cents TO,
party lines, with about 22G,00C
District customers being affected
Calls Proposal Erroneous
In answer to cross-examinatior
by Attorney John j. Kirby of the
Treasury Departments Bureau OF
Federal Supply, John M. Howard
general commercial manager OF
the telephone company, said any
proposal to hike pay booth coin
calls to 10 cents was not proper. -
"It would be erroneous to con-
clude that doubling the pay sta
ton rate would result in the
doubling of revenues from this
source" Mr.. Howard said.
For one thing, the witness esti-
mated, it would cost about $780,
600 to convert the Districts H.
600 pay telephones to dime boxes.
Meanwhile. he said, the busi-
ness done in pay booths might
fall Is to IS per cent, Mr.. How
ard declared. He added that he
based his estimate on the prob
ability that many potential coin
box users would rather wait to
get home or to their Offices to
make telephone calls rather than
pay 10 cents.
The Government lawyer then
pointed out that the Bell system
is seeking permission to increase
rates in New York coin boxes
to 10 cents.
The Federal Government, larg-
est customer Of the telephone
company In Washington, is inter-
vening because it has an annual
bill Of more than $500, 900 for
local calls alone. Under the pro-
posed new rates, the Federal
telephone bill would be increased
about $750,o00.