Evening star. [volume] (Washington, D.C.) 1854-1972, 1952-09-16
CourtUpsets
10c hone Calls
In Maryland
Increase Granted by
Utilities Board in
March OverruIed
BY the Associated Press

~ "'e SssVs'o'vu tIeSS
BALTIMORE. Sept. 16.-Chief
Circuit Court Judge w. Conwell
Smith, in an opinion written for
release today, reversed the coin
box increase granted the -Chesa-
peake g. Potomac Telephone Co.
by the Maryland Public Service
Commission.
He added that a proper consid-
Grafton of the case by the com.
mission might have resulted in q
reduction instead of an increase
in telephone charges"
In a decision last March, the
|PSC authorized the company to
boost coin-box charges from S to
10 cents, but denied increases in
charges for other telephone service.
The commission also fixed the
fair value of the company at $118,-
279,156.
Appeal Is Expected.
Judge Smith said he UNDER
Stands his decision will be taken
to the Court Of Appeals. It is ex-
lpected the 10-cent coin box charge
will remain in effect pending the
appeal.
The commission ruling granting
the increase had been appealed by
the city and the Peoples counsel.
who wanted it wiped out, and the
telephone company, which thought
1T inadequate.
Judge Smith said in his opinion
that the rate base was not sup
ported by substantial evidence"
He said the rate of return was
established without giving weight
ito tax economy and tax advan-
Itage.
IF the telephone company were
competing with Others" he de-
clared, you may be sure 1t would
be availing itself of all possible
economies in operation, including
tax economy"
Advantage for Stakeholder.
"That it does not adopt a flnan-
cial structure which will produce
such economies Is due to the fact
that American Telephone g. Tele-
graph. its only stakeholder. re.
alizes a tax advantage from the
|all-stock structure =. :" the Judge
found.
1.-THE tax rate on Americans in
come Is II per cent; on its divi-
dendss from CAP, it is only
Iper cent. And it will continue to
be so, just so long as he commits
sion permits it." said judge Smith.
A Public Service Commission
hearing on the C8P's application
to boost residential service from
IS to so cents a month. was re-
cessed yesterday until September
Is after the company completed
its case.
The utility told the PSC its
present request for temporary
increase to raise its income by
$3.50, 900 a year is ultra conserva-
tive"
New Rate Plea Planned.
w. Griffin Morrel. vice presi-
dent, said the company will ask
for further increases in a future
application for permanent rates.
He said the C8SP is asking for
temporary increases now because
hearing on a permanent applica-
ton would take too long.
Mr.. Morrell cited recent wage
increases amounting to 50. 400, 600
a year and plant construction
costing $28 million as reasons for
boosting its monthly rates.
"The more people we serve the
more expensive 1t becomes to
serve each one" Mr.. Morrel ad.
ded. He said the number Of tele-
phones has increased from 900 900
at the eno OF last september to
735, 900 last July and that plant
investment for each has jumped
from $255 to 1851.
Where Increases Would Go.
Lewis M. Smith. assistant vice
president. explained how the COM
pany proposes to distribute the
increased rates sought.
Flat rate residential services in
the metropolitan areas and local
area exchanges in the counties
would be increased Is cents @
month. and individual unlimited
service so cents.
u. S. Population Rises
4 MILAN in = Yan,e