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the reasonableness of the proposed rates, the said schedule of rates was suspended until November 28, 1923. The matter came on for hearing before the Commission at Springfield, Illinois, on October 2, 1923, at which time the Harrisburg Independent Telephone Company was represented by its manager, W. L. Ford, and no one appeared objecting.

At the aforesaid hearing the company submitted as evidence of record a statement of operating expenses and revenues, classification and distribution of subscribers' stations, and other evidence pertinent to the issue herein. The present and proposed rates for the principal classes of service are shown in the following schedule:

Classification
Individual, business stations..
Two-party, business stations.
Four-party, business stations.
Individual, residence stations..
Two-party, residence stations.
Four-party, residence stations..
Extension business stations...
Rural party line stations, metallic...
Rural party line stations, residence, grounded..

Annual Rates Present Proposed $24 00 $36 00 19 20 30 00 18 00 24 00 18 00 24 00 16 50 21 00 15 00 18 00

6 00 12 00 18 00 16 00 15 00 15 00

The Harrisburg Independent Telephone Company did not submit an inventory of the property used and useful in furnishing telephone service in the town of Harrisburg, and vicinity. The company uses as a basis for showing the reasonableness of the proposed increase in rates, a valuation of $16,000, and from the evidence of record relative to the extent and character of the property, the value proposed by the company appears to be reasonable for the purpose of testing the proposed rates.

The record shows that the Harrisburg Independent Telephone Company was incorporated in 1907 and that it started furnishing telephone service immediately after that date; that it is at the present time furnishing telephone service to approximately 750 subscribers' and has connections with other companies in the immediate

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vicinity and that there is a free exchange of service between the Harrisburg Independent Telephone Company and the other said companies. The record shows that for the past eight or ten years very little reconstruction work has been done and that the property had become badly run down, and the service furnished was very poor; that in May, 1920, the company was placed under new management and that since that time an effort has been made to reconstruct the property and improve the service.

The record further shows that a demand was made by the employees for an increase in wages and that on failure of the company to meet such demand, a strike among the operating employees was called and all exchange service was discontinued at 8:00 P.m. on September 25, 1923, and has been discontinued since that date. The company contends that it is operating at a loss, and on account of the financial condition of the company it is not able to meet the demands of its employees unless an increase in telephone rates is granted by the Commission.

The company submitted as evidence of record a statement showing the present annual operating revenue and expenses based on present operating conditions. The present annual operating revenue as shown by the exhibit, including local exchange, toll and miscellaneous revenue, is $10,696. Maintenance expense, exclusive of depreciation, is $13,288. Depreciation of plant and equipment is estimated at $1,250, making the total maintenance expenses, including depreciation of plant and equipment, $14,568,* which is a deficit of $3,572.* The evidence of record shows that the application of the proposed rates will increase the operating revenue by $3,233 and that the deficit under the proposed rates will still be $639. In arriving at the deficit above shown, consideration has not been given to the demand of the employees for an increase in salaries and wages and that if the demands of the employees are met, as it will be necessary to do to reestablish service,

*All figures herein are as in original.

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the annual expenditure will be increased by $2,880, thus resulting in a net annual deficit of $3,519.

After carefully considering all of the evidence of record, the Commission is of the opinion, and finds, that the proposed increase in rates should be granted, but owing to the fact that operating expenses are estimated and inasmuch as there is a probability that there will be a decrease in the operating expenses in the near future on account of the improvement in facilities whereby the number of employees may be decreased, the Commission should retain jurisdiction for the purpose of entering upon a further hearing and issuing such further order as it may deem advisable, and that the Harrisburg Independent Telephone Company should file with this Commission quarterly accounting statements in order that the Commission may be informed as to the operations of the company.

It is, therefore, ordered by the Illinois Commerce Commission as follows:

Section 1. That the Harrisburg Independent Telephone Company be, and the same is hereby, permitted and authorized to place in effect the schedule of rates filed with the Commission designated as Ill.C.C.2, covering telephone service in the city of Harrisburg, county of Saline, and vicinity, effective on December 1, 1923, provided written notice of the effective date of the said schedule of rates is filed with the Commission not less than ten days prior thereto; or effective at any subsequent date, provided written notice of the effective date of the said schedule of rates is filed with the Commission not less than ten days prior to the effective date of the said schedule; and when notice of the effective date of the said schedule has been filed with the Commission, as specified herein, and posted or filed in the office of the public utility, all as required by the Illinois Commerce Commission Act, and General Order No. 101,* adopted by the Commission, shall be the legal rates covering telephone service in Harrisburg, county of Saline, and vicinity.

See Commission Leaflet No. 131, p. 1029.

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Section 2. That all items of expense having to do with the upkeep of the plant shall be treated strictly in accordance with the Uniform System of Accounts for Telephone Companies, now in effect by the Commission, particular attention being given to the proper apportionment between maintenance expense and expense due to depreciation of plant and equipment.

Section 3. That the Harrisburg Independent Telephone Company be, and the same is hereby, required to file with the Commission duplicate quarterly accounting statements on Form 601-E, covering the operations of the company, and file said statements within thirty days following the termination of each quarter of the calendar year, beginning with the third quarter in 1923, and continuing until the further order of this Commission.

By order of the Commission, at Springfield, Illinois, this ninth day of January, 1924.

In re ADVANCE IN RATES OF THE WORDEN TELEPHONE COM

PANY.

Case No. 13531.

Decided January 17, 1924. Value Determined — Depreciation Charges Fixed

Authorized.

- Increase in Rates

OPINION AND ORDER. On August 3, 1923, the Worden Telephone Company filed with the Commission Rate Schedule Ill.C.C.1, in which it is proposed that the rates for telephone service in Worden, county of Madison, be advanced and which further proposes that such advanced rates become effective on October 1, 1923. It appearing from an investigation of the said schedule that the Commission should enter upon a hearing concerning the reasonableness of the said rates, the Commission on September 12, 1923, entered an order

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suspending the effective date of the said schedule until January 28, 1924.

All interested parties having been notified, the matter came on for hearing before the Commission on October 17, 1923, at which time E. F. Picker, secretary and manager, appeared for the petitioner and no one appeared objecting. Further hearing in the cause was held on November 7, 1923, at which time the petitioner was represented by E. F. Picker, secretary and manager, and the city of Worden was represented by C. W. Piper, mayor.

The present and proposed rates for the principal classes of service are as follows:

Number of Present Proposed
Class of Service

Stations Rate (net) Rate (gross)
Individual, business (inside one-half
mile radius) ..

37 $18 00 $27 00 Individual, residence

13
18 00

27 00 Two-party, residence

73

12 00 Four-party, residence

4
12 00

21 00 Rural, residence ..

9

21 00 Switching service stations

40
4 20

9 00 NOTE.-- Proposed Rates: A discount of 25 cents per month on business, residence and rural stations if paid by the fifteenth of each month.

A discount of 15 cents per station on switching stations if paid by the fifteenth day of the first month in each quarter.

The company submitted as evidence a valuation of costs. The valuation included material and supplies and development costs, and estimated the cost new to be $6,777 and the depreciated cost or present value to be $5,285. No evidence was submitted showing net additions to plant from November 1, 1921, to the present date.

An original cost valuation presented by the engineering section of the Commission shows the cost of the property as of November 1, 1923, including material and supplies, but exclusive of working capital and development cost, to be $6,591.

No statement of operating expense or revenue was submitted by the company. However, the engineering staff of the Commission presented a report showing the number

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