NEW HAMPSHIRE. Public Service Commission. In re INSTALLATION AND MOVING CHARGES AUTHORIZED BY POSTMASTER GENERAL. Order No. 829. Decided December 3, 1918. Installation and Moving Charges Established by Postmaster General, as Modified by Order No 2352, Authorized on Less Than Statutory Notice. The Postmaster General of the United States having on November 18, 1918, pursuant to authority vested in him by the President of the United States in his proclamation of July 22, 1918, issued Order No. 2352, modifying Order No. 1931, issued by the Postmaster General on August 28, 1918, and it appearing that said Order No. 2352 prescribes certain installation and moving charges for all telephone companies operating under Federal control, which said charges are in all respects reductions to similar rates and charges provided for by said Order No. 1931, and authorized by this Commission to be placed in effect one day after filing with this Commission, and that therefore it is desirable and in the public interest that the rates provided for in said Order No. 2352 shall become effective on less than statutory notice, It is ordered, That all telephone companies operated under Federal control, within said State, be, and hereby are, authorized to put in force one day after filing with this Commission the rates and charges provided for in Order No. 2352 of the Postmaster General of the United States, dated November 18, 1918. By order of the Public Service Commission this thir day of December, 1918. * See Commission Leaflet No. 83, p. 1646. NEW JERSEY. Board of Public Utility Commissioners. In re PETITION OF DELAWARE AND ATLANTIC TELEGRAPH AND TELEPHONE COMPANY AND NORTH JERSEY TELEPHONE COMPANY FOR APPROVAL of a Lease. Decided December 3, 1918. Petition to Approve Lease of Telephone Plant Denied. The Delaware and Atlantic Telegraph and Telephone Company and North Jersey Telephone Company sought approval of a lease of the former's plant to the latter for a period of twenty-five years, at a rental of $2,175 per annum for the first five years and thereafter $2,610 per annum, lessee to pay all taxes, maintain the property and make necessary changes, modifications, additions or replacements, etc. Held: That as the value claimed of $43,500 was based on unit prices considerably in excess of those used in the 1912 appraisal of the property, and in excess of unit prices used in the same territory within the period 1912 to 1918 in other appraisals, and as the Commission had approved transfers of property during the past year by the New Jersey Telephone Company and New York Telephone Company at lower figures than those given in the appraisal, the appraised value was greater than the true value of the property, the proposed rental to be paid on such a value would be excessive and would be reflected in the rates, and the lease would, therefore, not be approved. REPORT. On September 14, 1918, the Delaware and Atlantic Telegraph and Telephone Company and the North Jersey Telephone Company, both corporations of this State, filed a petition alleging that the Delaware and Atlantic Telegraph and Telephone Company was the owner of, and operated a certain telephone plant which furnished telephone service to certain subscribers in the counties of Warren, Hunterdon and Morris; that the North Jersey Telephone Company was authorized by law to engage in the business of furnishing telephone service throughout the State of New Jersey, and more particularly, to furnish telephone service in the counties of Warren, Hunterdon and Morris; that for C. L. 86] their mutual advantage, and for the purpose of avoiding duplication of telephone service, and for the more economic telephonic operation of the territory involved, they entered into an agreement on September 11, 1918, whereby the Delaware and Atlantic Telegraph and Telephone Company leased to the North Jersey Telephone Company certain of its telephone exchanges and toll plants, and assigned all of its subscribers' contracts and certain other contracts in certain territories in said counties, under the terms and conditions more particularly and at length set forth in said agreement. The petition requests the approval of said agreement. Hearings were held September 25 and October 2, 1918. The agreement referred to was offered in evidence. It provides for the leasing, by the Delaware and Atlantic Telegraph and Telephone Company to the North Jersey Telephone Company, [of] all of its poles, cross-arms, brackets, insulators, aerial wires and cables, including terminals and other appurtenances, conduits, manholes, underground cables, outside and inside fixtures and wiring on subscribers' premises, subscribers' station apparatus, (excepting transmitters and receivers), central office and private branch exchange, switchboards and equipment, and all associated telephone apparatus and appliances of the lessor company in the territory designated, from which, however, it excepts certain pole lines and private branch exchanges therein referred to. The rental provided for is $2,175 a year during the first five years, and thereafter at the rate of $2,610 a year, as well as all taxes thereafter levied and assessed upon said property; the lessee to maintain the property and pole lines, make all changes, modifications, additions, or replacements to the property during the term of the lease, which is twenty-five years. The lessor company also assigns, by the lease, all contracts made by lessor with the subscribers in the territory, as well as certain other contracts specifically referred to. The lease contains provisions for the restoration and return of the property to the lessor, with all additions and replacements made to it by the lessee, under the conditions provided in the lease upon default of any of the terms and conditions thereof. The value of the property, as of the date of the agreement or lease, is claimed to be $43,500. The lease contains these paragraphs as to value: "If the value of said property upon the termination of this agreement under any of the provisions hereof, calculated at the unit value used to obtain its value at the date of leasing, is less than the value thereof on the date of this agreement, then lessee shall pay to lessor the difference in the value of said property on said dates. If the value of said property upon the termination of this agreement under any of the provisions hereof, calculated at a no lower unit value than that used to obtain its value at the date of leasing up to the amount of $43,500 is more than the value thereof on the date of this agreement, then lessor shall pay to lessee the difference in the value of said property on said dates. If the parties hereto shall be unable to agree upon the value of said property on the date of the termination of this agreement, the matter in dispute shall be referred to arbitration; one arbitrator to be chosen by lessor, one by lessee, and a third by the two so chosen. The decision of said arbitrators, or that of a majority of them, shall be final and conclusive. The expense of such arbitration shall be borne equally by the parties hereto." Mr. Smith, president of the North Jersey Telephone Company, opened the hearing as follows: "Mr. Smith. This is an application for the ratification of a lease between the Delaware and Atlantic Telegraph and Telephone Company and the North Jersey Telephone Company for the property of the Washington exchange in Warren County and with other lines running from the exchange to Flemington and to Hackettstown and a private branch exchange operating in Highbridge. It is a part, in fact it is the first part, central part and key, of the whole program started a couple of years ago to consolidate the small companies operating in Hunterdon and Warren Counties. We worked on that program off and on ever since, until a year ago last November, or December December it was when we came before your Board, on behalf of the North Jersey Telephone Company, and got your consent to issue $3,000 worth of organization stock. Up to that time it lay dormant. That was pressed quite vigorously until up to the beginning of the war; after which, for some reason or other, I don't know why, we didn't proceed at all. Later on the work was taken up. [N. J. C. L. 86] We have progressed as far as getting an inventory and appraisal of all of the companies operating in Hunterdon and Warren Counties, with the exception of two, and some other small companies, and agreements, tentative agreements, were entered into with all except three. Some of them, however, one of them particularly, we found it necessary at the last minute to revise, so we won't be quite ready on behalf of those companies to present an application for lease or for purchase. But other companies will be coming in from time to time in the course of the next month to present petitions, five or six companies besides this one. Commissioner Slocum. Why wouldn't it be better to present all your petitions and that they be heard at one time? Mr. Smith: This is the key, the most important one, and we find it very desirable to have the action of this Board on this petition, we think, before we press the others; for several reasons, which we would be very glad to go into at length if vou think desirable. Commissioner Slocum. There are several very good reasons why they should be considered at the same time. Here you are having an inventory and appraisal made of this property at higher unit costs and the result will be a higher charge to the telephone takers. Mr. Smith. No. I think you will find this is at a higher unit cost of appraisal than any of the properties we have taken over, but this is necessary for several reasons; it is the center of our operating units; it is the hub of our wheel, so to speak. The property being bought from a company in which the construction charges were higher, and the cost of construction higher than any other company we will be doing business with, or most any, there may be one other, we will have to pay the unit costs we have to pay in this case. Commissioner Slocum. Yes; but the Delaware and Atlantic leases this property, and the rentals you propose paying the Delaware and Atlantic would involve a higher telephone charge to be collected. We ought not to be in any hurry to establish new companies to collect higher toll. Mr. Smith. Well, I think that is an assumption so far, that it would involve higher telephone charges. As far as we have shown it is [not? Ed.] true. Commissioner Slocum. It is true. The whole examination of your papers show that. cases. Mr. Smith. Higher telephone charges are probably indicated in all There will be, eventually, rate cases that will come before you for the entire unit when the thing is started. That is one thing we desire to get moving right away. We desire to get the operation of this first unit started, and we can't get it started until this hub is created. It works all around this particular Delaware and Atlantic property." The engineer of appraisals of the Delaware and Atlantic Telegraph and Telephone Company testified that the |