Application for Increase in Tariff Fully Discussed in Council: Recommendations Adopted The Shanghai Telephone Company's affecting eleven firms would incur ad-application to the Municipal Council ditional charges representing an. for permission to revise lis tariff with aggregate increase of 25.9 per. cent. the object of increasing its total a letter the Company discounted revenue by 2289 per cent. and the the" suggestion of the Exchange return on invested capital to ap-Brokers' "Association that, on the proximately 10 per cent. per annum grounds of costs, there was unfair dis was considered by the Council on crimination against private Lines using Wednesday, when the Public Utilities relatively simple "equipment, and Committee presented its minutes on stated the principles on which an discussion of this question. equltabte ta was based. The pro Te. was decided that subject) to. the posed. minimum rate of $14 concurrence of the French Municipal mensem for private es, the Com-'Administration, the Shanghai Telephone pany said, was considered justifiable Company be permitted to Increase its in comparison with the average charge rom revenue" by not more than for business exchange lines and with Haig" percent, from April I. 1885, by uch adjustments in it tari' as may be the charges for private lines else-Approved by the Council and the French where.
Municipal Administration, with the ob-Reduction in Calls Calculated ject of obtaining a return of approxiimately 10 per cent. on invested capital member pointed out that the tinder the Franchise Agreement, and Telephone Company proposed that such Increase be without prejudice determine its charges on the assump-forthe matters outstanding. Lo. US. tion that the number of cable per Income "Tax. Depreciation Reserve. business telephone would be reduced Management Fee, ete. by about $0 per cent. during the first was stated that the Telephone two or three years after introduction Company would submit for the Coun-of message rales. He inquired wheth ils consideration a new schedule of for the assumption was justified. Ho charges based on this increase. doubted whether the large reductions What Article 13 Provides In usage recorded in other cities would be effected here as the condi-Article 13 of the Franchise Agreetions were not the same, He. also ment of August 5, 1930, between the pointed out that any' profits in excess Council and. the Company provides 6° 19 per cent. would be credited to that after conversion of the service from manual to automatic working the tariff of charges shall be agreed tupan by the Company' and the Council and shall be so framed as to produce a net return on capital invested the business of ® per cent. plus 2 per cent. per annum. At the same time it was agreed that during the first three years after completion of the conversion the Company would not request a tariff higher than that recommended in the Anson Report The conversion was completed on March 26, 1932, and the Council authorized te introduction of the Anson from that date, In August, 1933, the Company applied for an adjust ment in the tariff owing to unforeseen
agreement was sig Condition nek contemplated when the The difficulty, however, was met by granting certain loan facilities, the eect "of which was. to reduce the Company's capital and thus ease the potential burdens of the subscribers, and in return therefor the Company undertook (a) that the tariff inerenses, effective from April 1, 1995, should not exceed 25 per cent: (b) that there should be no other" increase until March, 1937, when the cordl= ions of the Franchise should apply; (e) that any surplus between April 10938, and March 31, 1997, over 8 per cent. plus 2 per cent. on invested eapiial should "be dealt with under the franchise conditions, while any" defeency should be" wr ten in the tariff revision accom but should not be recoverable until after March, 1997,
Text read from the printed page and cleaned; old type leaves the occasional error.