The Sidney herald., 1959-05-20
Telephone Co.
FROM PAGE y

new rates with the commission
in August, 1857. In May, 1858
the commission by a 2 to / vote
denied that application. The firm
today withdrew from a court &C
ton appealing the commission
decision.
Background Information
Telephone rates in Montan;
have not been changed since 1853
Application for rate change.
was made in August 1857, witt
the Montana Public Service
Commission. Hearings were hello
in September and November 1857
Commission denied rate appli-
cation in May 1858.
Company requested review OF
the case by the District Court
asking for permission to place
new rates in effect under bond.
This matter is still in litigation
in the Montana courts.
New Application Filed
Since the present rates were
established on September l, 1858,
the Company has been faced with
continually increased operating
expenses and taxes.
All possible economies have
been made to keep expenses
down so that a reasonable re-
turn could be realized on the
value of the property of the tel
ephone plant to serve the people
of Montana.
Despite these efforts the rate
of earnings is far below a rea-
sonable return. 1t is currently I'M
der 40 and is expected to be
even lower this year.
The Company has asked the
Commission to set a date for a
hearing to enable the Company
to present evidence regarding its
Montana operations.
1t has asked the Commission
to set a date for a hearing to
enable the Company to present
evidence regarding Its Montana
operations.
1t has asked the Commission to
hold such a hearing in order
that it might make a determina-
ton of the proper valuation OF
the Company's properties in Mon
tana and to establish a fair rate
of return on that value.
Inflationary Pressures Continue
Every business and every
household has been faced with
the problem of increased expen-
ses. In addition to high costs of
materials needed for day to day
operations to provide telephone
service in Montana, wage costs
and taxes have continued to rise.
The Company engages in collec-
tive bargaining with the union
representing many OF its en-
ployees and since the 1858 case,
there have been five wage adj
justments.
To attract and hold capable
people, the Company must main
tain wages comparable to those
paid for similar skillS in other
industries.
The Company's wage payments
to Montana employees in 1858
were S11,750,000. This repre-
for the most part money
spent in Montana communities
telephone people live and
work.
The Company paid 1880 600
in taxes in 1858 - a 1855 per
cent increase over 1857.
Price Increases in Other
Commodities
Prices of most commodities
have risen higher than telephone
rates in postwar years.
The Company has been a VIC
tim of initiation rather than a
contributor to it.
An improvement in the finan-
,ial health of the Company will
nave a direct benefit to the econ
omy of the state.
Why Reasonable Earnings Are
Important to Your Telephone
Service
In a regulated bushes Like the
Telephone Company, income after
meeting expenses, paying divi-
lends and interest on borrowed
money is not sufficient to leave
very much margin to pillow back
money into the business to build
more plant.
AS a result, money must be
obtained from investors each year
o provide facilities to keep up
With service demands.
The Company must compete
With all other industries for in
yestors' money. To attract this
lew money the Company must
,e fair to present investors and
how earnings which will promise
investors a fair return on the use
# their money.
current Requirements for Added
Equipment Of All Kinds
For three consecutive years the
yompany's construction programs
n Montana have required expen-