exactly the same amount, including an item of $14.69 which appears as an interest charge. Apparently what the company has done has been to report cash receipts and disbursements, although the result of this may not be very far wrong as representative of revenues and expenses. Four hundred and ninety-seven dollars and sixty-two cents was paid to the Wisconsin Telephone Company for switching service, according to this report, and $138.04 of the collections represented long distance toll, also paid to that company. These two items amounted to $635.66, so that there remained out of the collections for the year about $460 for all other purposes.

The company reports a total of 60 subscribers, which at the proposed rate of $20.00 per telephone, per year, would yield a revenue of $1,200, not including any amounts collected for long distance service. The record does not show whether or not the Wisconsin Telephone Company furnishes receivers and transmitters, although the amount paid last year for central office service would seem to indirate that this condition exists. With 60 subscribers, the charge for switching service, not including receivers and transmitters, would be $450 per year. If transmitters and receivers are furnished, the charge would amount to $486 per year. With a switching charge of $450 per year, the proposed rate would yield a revenue, available for all other purposes, amounting to $750. Other direct expenses, if lines are to be properly maintained, could hardly be less than $5.00 per telephone, per year, or $300 in total. This would leave $450 for depreciation and return upon the investment, which is not at all excessive. The book value is $3,400, which is probably not far wrong.

In the 1921 decision, we called attention to unsatisfactory service conditions on the line. On January 16, 1922, the company advised us that the lines had been thoroughly repaired from one end to the other and were in good condition and that service was then satisfactory. It submitted, also, a communication from a subscriber who had previ

See Commission Leaflet No. 116, p. 266.

C. L. 149]

ously complained regarding service, which corroborates the statement of the company regarding repairs having been made and the then condition of service.

It appears, therefore, that the proposed rate should now be approved.

It is, therefore, ordered, That the applicant, the Hamburg Telephone Company, may place in effect for service rendered on and after April 1, 1924, a rate of $20.00 per telephone, per year.

Dated at Madison, Wisconsin, this thirty-first day of March, 1924.

In re APPLICATION OF THE WOOD COUNTY TELEPHONE COMPANY FOR AUTHORITY TO INCREASE RATES.

U-2973.

Decided April 11, 1924.

Book Value Found Conservative and Adopted as Rate Base - Return of 8 Per Cent. Approved-Rates as Requested Authorized with Slight Modifications.

OPINION AND DECISION.

The application of the Wood County Telephone Company seeking authority to increase its rates for telephone service was filed with the Commission December 17, 1923. Hearing was held at Madison, Wisconsin, February 5, 1924, when the following appearances were entered: J. A. Pratt and E. B. Smart, general manager, appearing for and in behalf of the company. There were no other ap

pearances.

The lawful rates of the applicant as at present in effect follow:

The above rates are subject to a discount of 10 per cent. if paid on or before the tenth of the month in which the bill is due. For switching service, the discount is applicable if bills are paid quarterly within one month of their issuance.

Installations:

INSTALLATION AND MOVE CHARGES.

Each main station, each extension, each trunk line, or station on a private branch exchange, subject to usual refund rule

Move Charges:

Local inside move

Local outside move

Change in type of equipment..

$3.50

1 00

2.50

1.00

The applicant alleges that this schedule of rates does not produce sufficient revenues to meet operating expenses and provide for a reasonable return and an adequate depreciation allowance. Permission is asked to charge the following schedule:

[Wis

C. L. 149]

The present rates, rules and regulations covering discounts, installation and move charges are not affected by this application.

The applicant operates three telephone exchanges, Wisconsin Rapids, Nekoosa and Port Edwards. The first is of the common battery type; the other two are of the magneto type. All circuits are full metallic, with the exception of a small part of the Nekoosa exchange. The number and classification of subscribers appear in TABLE I.

TABLE I.

NUMBER AND CLASSIFICATION OF SUBSCRIBERS, WOOD COUNTY TELEPHONE COMPANY, DECEMBER 31, 1923.

The applicant's book value December 31, 1923, totaled $133,204.92. This is equivalent to an average investment of $49.00 per telephone. The detail of expenditures for plant and equipment appears in TABLE II.

TABLE II.

WOOD COUNTY TELEPHONE COMPANY, DECEMBER 31, 1923.

BOOK VALUE

The book value appears to be a very conservative estimate of the plant's value. This conclusion is reached after comparing the average book value per telephone with that of other similar plants with whose valuations we are familiar. Under these conditions, we can see no reason for not allowing the customary return of 8 per cent.

The depreciation allowances for the applicant's property will exceed that for most plants of its size, because there is very little underground construction in its distribution system. It also appears that the item "land and buildings" is practically all the cost of a building, the land being included only at its original cost, which is inconsequential

The following allowances for depreciation are computed upon normal lives of the different items of property, using a sinking fund basis. The allowances are, we believe, sufficient to cover all retirements, from whatever

[Wis.