ARKANSAS.

Railroad Commission.

In re APPLICATION OF THE SOUTHWESTERN BELL TELEPHONE COMPANY FOR AN ORDER AUTHORIZING IT TO ISSUE FIRST MORTGAGE BONDS.

Case No. 320.

Decided August 16, 1923.

Creation of Lien on Property to Secure Bonds Authorized.

ORDER.*

Application having been made to the Arkansas Railroad Commission by the Southwestern Bell Telephone Company for authorization by said Commission of the creation of a lien on the property of said corporation within the State of Arkansas by the issuance by said company of its first and refunding mortgage, thirty-year, 5 per cent. gold bonds, in the sum of $50,000,000, to be dated within one year from the date hereof and secured by mortgage substantially in the form which is attached to the petition in this cause, and a hearing having been duly held, said Commission finds that the money to be procured by the issue of said bonds is necessary and reasonably required for the following purposes and no others, viz.:

(a) Acquisition of property;

(b) Construction, extension, betterment or improvement of or addition to its facilities; and

(c) Discharge or lawful refunding of its obligations.

The Commission further finds that legal authority has been granted to said company by the regulatory body of the State of its domicile to issue said mortgage and said bonds.

*

Correcting error in order as printed in Commission Leaflet No. 142. p. 461.

C. L. 146]

It is, therefore, ordered, That the Arkansas Railroad Commission does hereby authorize the creation of a lien upon the property of the Southwestern Bell Telephone Company situated in the State of Arkansas by the execution of its mortgage in substantially the form attached to the petition in this case, and

It is further ordered, That said mortgage is authorized for the purposes set forth above, and not otherwise.

The authority hereby given to execute such mortgage shall apply only to bonds to be issued by said company within one year from the date hereof.

Little Rock, Arkansas, August 16, 1923.

In re APPLICATION OF THE SOUTHWESTERN BELL TELEPHONE COMPANY FOR AN ORDER AUTHORIZING IT TO ISSUE FIRST MORTGAGE BONDS.

Case No. 320.

Decided January 26, 1924.

Amendment of Form of Mortgage Authorized.

SUPPLEMENTAL ORDER.

Application having been heretofore made in this cause to the Arkansas Railroad Commission for the authorization by said Commission of the creation of a lien on the property of said corporation within the State of Arkansas by the issuance by said company of its first and refunding mortgage, thirty-year, 5 per cent. gold bonds in the sum of $50,000,000, to be secured by a mortgage substantially in the form which was attached to and filed with the original petition in this cause; and said application having heretofore been granted by an order* dated the sixteenth day of August, 1923; and a supplemental petition having been now filed by said Southwestern Bell Telephone Company for

*See supra, page 280.

leave at its election to amend the form of said mortgage by eliminating from the description of the mortgaged premises the property of the company in the state of Kansas, and by providing that such property may be subjected to the lien of said mortgage upon the company's obtaining such authority therefor as may be required by law, and by providing that the company will not otherwise mortgage its property in Kansas and will not sell it substantially as an entirety unless it shall subject the proceeds of such sale to the lien of the said mortgage, and by making such other changes in the phraseology of the mortgage as will make its provisions consistent with the foregoing changes; and a hearing having been duly had upon such supplemental petition;

The Commission finds that legal authority has already been granted to said company by the regulatory body of the State of its domicile to issue said mortgage and said bonds and to make the said amendments in the said form of mortgage.

It is, therefore, after due deliberation:

Ordered, 1. That authority is hereby given to said company at its election to amend the form of the said first and refunding mortgage in the following respects: first, by eliminating from the description of the mortgaged premises the property of the company in the state of Kansas; second, by providing that such property may be subjected to the lien of said mortgage upon the company's obtaining such authority therefor as may be required by law; third, by providing that the company will not otherwise mortgage its property in Kansas and will not sell it substantially as an entirety unless it shall subject the proceeds of such sale to the lien of the mortgage; fourth, by making such changes in the phraseology of said mortgage as shall make its provisions consistent with the foregoing changes.

Ordered, 2. That this order shall be effective on and after this date.

Little Rock, Arkansas, January 26, 1924.

[Ark

CALIFORNIA.

Railroad Commission.

In re APPLICATION OF THE REEDLEY TELEPHONE COMPANY FOB PERMISSION TO CHANGE ITS REEDLEY-PINEHURST LINE FROM A COMBINATION SUBURBAN AND TOLL LINE TO A TOLL LINE, AND FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY.

Application No. 9103-Decision No. 12628.

Decided September 19, 1923.

Combination Suburban and Toll Line Ordered Changed to Toll Line Establishment of Exchanges Authorized Rates Established.

OPINION.

Reedley Telephone Company, applicant in this proceeding, owns and operates a telephone line extending from Reedley through Squaw Valley to Dunlap. Stations at Pinehurst, The Cedars, Cedarbrook, Miramonte and Camp Miramonte are also served over this line by means of connecting privately-owned lines.

This line has, for a number of years, been operated as a combination suburban and toll line. All stations on this line are connected directly to the line and can ring the Reedley operator directly and all regular subscribers are enjoying unlimited switching privileges with other subscribers of the Reedley system for the payment of the monthly flat rate. Non-subscribers, however, are charged a toll for the use of the line for each call completed.

Applicant now proposes to operate this line only as a toll line and to open exchanges at Pinehurst, Dunlap and Squaw Valley. The existing subscribers will, in this manner, then be served from some one of these exchanges.

Claiming that the service rendered was unsatisfactory, Mr. Kincaid and some others of the 16 subscribers on this line, on May 13, 1921, filed formal complaint (Case No. 1599)* against the Reedley Telephone Company and asked

*See Commission Leaflet No. 125, p. 1177.

the Commission to issue its order requiring the Reedley company to put the line in repair and make arrangements regarding the reconstruction and maintenance of subscribers' branch lines.

In its Decision No. 9890* (20 C.R.C. 1032) the Commission ordered the Reedley company to reconstruct the main line in accordance with standards as set forth by it and to maintain the main and all branch lines. It also authorized the Reedley company to disconnect branch lines not reconstructed according to standard, and to charge a monthly flat rate for residence telephone service, wall set, of $4.00. As a result of this decision, 12 of the 16 subscribers immediately discontinued service, leaving 4 subscribers on the line.

A public hearing in the present application was held in Reedley on August 7, 1923. It was brought out at this hearing that the principal objection on the part of subscribers to the granting of applicant's petition was the fear on their part that the service to be rendered under the proposed arrangement would be very inferior to that they are at present receiving. Little objection was expressed concerning proposed changes in rate. Applicant set forth the abnormal expense of maintaining the line, due to the mountainous condition of the country through which most of it is located, and pointed out the small revenue received under the present arrangement of rates and service.

It appears that, considering the investment in this mountain line, the comparatively high expense of maintaining it and the low revenue received from it, some action should be taken to relieve other subscribers who have little interest in this line from carrying such a large portion of its burden. This might be done by continuing service as at present with direct connection to Reedley and raising the flat rate to subscribers to a point where revenues would be commensurate with expenses. The almost inevitable

See Commission Leaflet No. 125, p. 1177.

[Cal.