OCR Text |
Show COMPANIES HAVE HARD PROBLEM. New Conditions Are Demanding Attention From Public Service Concerns. In these days of compulsory readjustment of industrial affairs, the telephone companies, like other concerns all over the country, are giving-their giving-their best thought to a problem that Is of more or less interest to all telephone users. The .problem was stated in a paper entitled "How to raise telephone tel-ephone rates," read by" L. A. Herrick before the International Independent Telephone Association's Associa-tion's convention in Chicago, January 21-23. The paper dealt with the predicament in which many telephone companies find themselves as a result of adopting rates too low to make a profit under the changed conditions that have come with the groat development of the telephone industry and the increased cost of material and labor. Telephone Tel-ephone companies all over. Independent as well as Bell concerns, find the problem of increased cost serious, and are seeking the only possible relief by adjusting rates. Statements prepared by th-3 telephone people show that telephone equipment and labor have increased in-creased in cost about 30 per cent in the last few years. The growth of the telephone industry has been nothing short of phenomenal in the same period, and has brought to the fore many new problems, financial as well as physical. People are now using the telephone as a regular, reg-ular, dally part of their business and social routine, rou-tine, ns contrasted with its occasional use a few years ago. As a result of this increased use of caoh line, and the great increase in the number of telephones in use, the operating and maintenance mainten-ance items have assumed now phases, and rates that wore profitable a few years ago are not profitable profit-able .now. As the telephone companies derive their revenue rev-enue entirely from the sale of telephone service, It. follows that the only way in which they can moot the increased expense is by securing more revenue from their lines, either by raising existing exist-ing rates or by discontinuing the cheaper classes of service and using all wires only for the higher elasfev. of service. The problem at present Is acute, and the west is sharing It. Among independent telephone companies com-panies noted as having announced increase in rates recently are those at Seymour, Ind.; Bloom-ington, Bloom-ington, Ind.; Jamestown, N. Y.; Holland, Mich.; Fortland, Mich.; Champaign, 111.; Corning, N. Y.; Hamilton, N. J.; Charleston, W. Va.; Rochester, N. Y., and other places. In some cases, compet- ing companies, in order to secure entrance to a field, have accepted maximum franchise rates that were simply impossible, and failure to secure modifications of the franchise terms have caused numerous failures of smaller companies. In other cases, where the necessity of increase has been clearly shown, the public has recognized the right of the companies to exist and has accepted the higher rate without protest. fc The last few years have beon years of remark- pi able industrial development, and have made 1 heavy plant demands on public service companies 1 in addition to the unusual maintenance and oper- 1 . ating requirements. These conditions have been 1 especially marked in the telephone business, as , indicated above, and it now seem - inevitable that I in many places telephone users must accept an 1 ' - increase in telephone rates. Despite the clamor 1 that has been raised against "corporations," it . 1 must be conceded that public utilities like the tel- 1 ophone, electric light and gas service, are necos- 1 sary, and that the companies are entitlod to a 1 fair profit on the capital they have invested. I When it can be shown that the companies are not 1 earning interest on their investments, the con- I sumer cannot in justice object to what slight In- 1 creases may be necessary to correct the condl- I tion. Every individual or concern engaged in 16- I gitimate business is entitled to a reasonable profit. |