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has held numerous conferences and hearings in regard to this important question, and from testimony presented by the Southern Bell Telephone and Telegraph Company has developed the following facts:

To July, 1919 (using 1916 as a basis of 100%), there has been an increase of 78% in the cost of material entering into the construction and maintenance of telephone lines and exchanges. For the same period salaries and wages increased 134%. Increase in the number of employees during this time was 70%. During 1919 5,494 exchange stations were installed in South Carolina. The number of miles of copper metallic toll line circuit built in 1919 was 340, and the telephone company contemplates the construction of 741 miles of additional copper metallic toll line circuit within the next twelve months in this State.

In view of the facts as outlined above, and with such testimony as was possible for the Commission to obtain, it appeared to them it was absolutely necessary for an increase of rates over the prewar rates; and realizing the fact that telephone service is among one of the most important necessities to the public at this time, and not desiring to cripple the telephone company or place it in a position where it could not from a financial point of view furnish adequate and efficient service to its patrons, and at the suggestion of a number of interested patrons of the telephone company appearing at the hearings held by the Commission, the Commission has put into effect as a test rate the rate in use by this company while under Federal control. Of course, in taking this action the patrons of the telephone company, as well as the Commission, had to accept the sworn statements, containing audits, etc., of the telephone company. Without a thorough auditing of the books of the telephone company, any one can readily see that the above course was the only possible one to pursue, and in connection with this matter the Commission requests that your honorable body grant this Commission an appropriation of a contingent fund of not less than $2,000, to be used for the specific purpose of having the books of the Southern Bell Telephone and Telegraph Company properly audited so that the Commission may be in possession of definite data that will enable them to take such steps as will guarantee efficient service to the patrons of this company in South Carolina. In asking for this appropriation, of course, the Commission would expect to use as small a portion of this amount as is possible, the balance, if any, to revert to the State for such disposal as your honorable body may deem proper. With the vast volume of work now before the Commission, and with the limited force they have, it is a physical impossibility for this audit to be made by the Commission itself, besides it is the opinion of the Commission that it would be proper to employ a certified accountant to do this work and report its findings to the Commission.

EXPRESS COMPANIES.

At this time the American Railway Express Company, which

the only express company doing business of any consequence in South Carolina, is still under Federal control. During the past year the Commission has had numerous complaints against the service rendered by this company, all of which have been investigated promptly by the Commission, and so far as it has been within the power of the Commission the troubles complained of have been corrected. However, on account of the congestion of freight service the Commission's experience is that the express company instead of carrying what is known as small package freight has had to assume the burden of carrying almost every kind of commodity and in great quantities. This, coupled with the fact that the express company, like all public utilities, due to the war had to give up their experienced help and substitute for same inexperienced and inefficient help, has caused the service to deteriorate at times to an alarming extent. Congestion with the express company has been a proposition that it was apparently impossible to correct immediately. The Commission has worked diligently along this line and as far as possible has relieved the situation, but so long as this utility is operated by the Federal Government the rules of this Commission and the laws passed by the General Assembly of South Carolina cannot bring the desired results, and the only thing the Commission has been able to do is to obtain such results as were possible under existing conditions. The public has suffered greatly from delays, damage to and loss of express matter while in transit, which has resulted in claims against the express company to an extent exceeding anything that could have been expected by the officials who have devoted their service to this specific branch of the express busi

The public has further suffered in view of the fact that these numerous claims must necessarily be paid out of the revenue of the company, which must be obtained through rates. This has been a serious problem indeed and one which the Commission has been unable to adjust as it desired. At many points in South Carolina where the amount of traffic is very small and not sufficient to cover the expense of maintaining an agency, the express company have closed such offices and the Commission has experienced great difficulty in having same reestablished. In some instances of this kind no qualified person could be found that would accept the agency at the usual remuneration for such service, and in such cases great inconvenience has no doubt been suffered by the citizens of certain localities in South Carolina. However, in all but a very few cases the Commission has been able to reach some understanding whereby service has been maintained, but this without question is a serious question under existing conditions. The Commission expects when this company is returned to private ownership to be able to correct many irregularities that at present it is without authority to adjust. It has also been difficult to maintain sufficient pick-up and delivery service in cities where such service is being performed; still, in the past few months the express company, at the request of the Commission, has put in quite a number of additional trucks, teams, wagons, etc., and this condition is being relieved as rapidly as possible and few complaints along this line are now being received by the Commission. Another thing that has hindered the express companies in the handling of traffic is the lack of equipment on railroads, a great deal of which had to be converted to other use during the war, but now that such equipment is gradually working back to where it was performing service prior to the war w can see no reason why express service in South Carolina should not be up to standard within the next few months at most.

ness.

FREIGHT CAR SHORTAGE.

During the war period this State, as well as the other States in the Southeastern District, experienced the most acute shortage of freight cars that has occurred in the history of railroads. The Commission has been very diligent along this line and during the crisis worked day and night and finally succeeded in securing South Carolina's full pro-rata share of empty cars, and we are pleased to report that no complaint from this source is being received by the Commission at this time.

CLASSIFICATION AND FREIGHT RATES.

This is a branch of railroad service over which the Federal Administration has assumed almost entire control, both of interstate and intrastate rates. The Commission has managed to maintain some rates through continually pleading with the Administration at Washington, and after a long-drawn-out controversy with the Administration, through hearings and by correspondence, has succeeded in retaining the classifications and ratings in the South Carolina Exception Sheet to a great extent. Of course, however, the advances under the general rate structure were added at the time the railroads were placed under Federal control, and rates on certain commodities have been changed or eliminated by the Government. The Commission was able to have cotton seed, ice and other perishable commodities put on a preferential list, and this, together with the preservation of the greater portion of the South Carolina Exception Sheet, has resulted in the saving of thousands of dollars to the people of the State. Many proposed rate changes have been submitted to this Commission by the Federal authorities with the request that the Commission approve or offer suggestions in regard to same, and very few of such changes have been approved by the Commission.

OVERCHARGES, LOSS AND DAMAGE CLAIMS. Since our last report many instances have been called to the Commission's attention in regard to overcharges and loss and damage claims. In cases of overcharges this Commission has handled each and every complaint on its merits and has done what it could to have same adjusted.

As to claims against public utilities, the Commission has no jurisdiction as these are matters to be settled by the courts of the State.

CASES PENDING BEFORE THE COURTS.

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The only cases pending at this time are in the Federal courts, and affects the Charleston-Isle of Palms Traction Company, in connection with rates to be charged on this line from Mt. Pleasant to Isle of Palms, the company claiming they could not operate under the rates granted them by the Commission.

A similar case is also pending in connection with the AugustaAiken Electric Railway Company.

COMPLAINTS AND HEARINGS.

The records of the Commission show a great increase in this specific branch of the work, due to the peculiar conditions that have existed over the entire country for the past two years. Many hearings are now pending and frequently the Commission holds five or six hearings per week. In fact, this branch of the work has been the heaviest, no doubt, in the history of the Commission and affects every public utility over which the Commission has jurisdiction. This condition will doubtless prevail until things have become nearer normal. The Commission has carefully investigated each complaint presented to it and decided same upon its merits with a view of obtaining results that were just and equitable to all parties concerned.

FRANK W. SHEALY, Chairman.
JAMES CANSLER, Commissioner.

H. H. ARNOLD, Commissioner.
J. P. DARBY, Secretary.

ORDERS

Columbia, S. C., January 29, 1919.

ORDER NO. 176.

In re Operating Locomotives Backwards. To All Railroads in South Carolina:

The Railroad Commission of South Carolina, in its office at Columbia, S. C., this the 29th day of January, 1919, after due deliberation and much thought, has reached the conclusion that the practice of running locomotives backwards not only carries great hazard to the employees of the railways, but is exceedingly unsafe to the traveling public, not only upon trains whose motive power is being so operated, but also to the traveling public necessarily having to use grade crossings over railroads upon which locomotives are being operated in such manner; and in order to eliminate the danger as much as possible,

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