The Shanghai Telephone Co's application to the Councils for approval of.a revised thrift has now received the consideration of the Public: Utilities Committee of the Shanghai Municipal Council. In regard to. Information which has been issued by the Council it may be well at once to point out an important point on which misapprehension appears to exist, For convenience the terms of the Company's application are here Wt Is felt that Shanghat clearly falls the group. of communities. where ting rate Fealdence service may Props erly "be "velained, at least for the Present, but where it Is. imperative {hat "rssane "rates be "adopted. "The. average overall whan business be sub= per exchange! Ped yeth the! ailing. rate of 7.12 calls for line per ay which existed in 1031 Just prior to the opening of the new. automatic central aifces." To Mlustrate the effect of this excessively high calling Fate on 4 portion of the Company's investment the' Centeal "Exchange, which under ttormal conditions should accommodate ten thousand (10,000) there" would bea. ending" in Tnvestment. in making future ctenstons of at Toast 3.500000 that fs, Under the existing. tate. schedule' the company has invested at Toast $3,500 00" to handle an excessive ure of the service a large part of which has been found to arite through joint use of a common telephone and giving. away Service" #0 the. general" public tu Violation ©2 the contractual agreements Between the Company: and its rubseribers. "it is, therefore, obvious that the ergs ers "and the abusers of, the service in Shan enjoat {atephone erviee sat the expense the malt users and particularly at the expense of the rev dent subscribers, From this extract it will be seen that "the "capital expenditure $3,800.000 is not a prospective burden on the Company but haa actually been incurred. The exchange lines. Bus! ness flat rate service, at" present amounting to $12.24, will be, under the proposed message system, at the rate of $10 a month for 100 alls oF ess for the first Tine; but for' the second and each succeeding tine the cost will be $5 a month. Thus for 9 Jarge firm which Is now paying $1224 for every line which {t uses, the new message rates will not Involve as heavy an increase as might otherwise have been imagined. Taking a aube scriber who has at present two lines in his once: for which he has to pay $2448 1 month. he will now have to pay $15 a month, and up to 200 calls hho will "have, therefore, a smaller monthly outlay than before, and he bhar $948 to set off against the addi tional message rate payment for the 100 calla allowed, Tu regard to extension and private branch exchange lations. reference to the Company's application shows that. the present rate is $219, with decreasing. scale. fand the proposed new rates are busi hose extensions, $2 each, and resident extensions, $1.50 each. "These points, fof courte, ave important. As this Journal has already pointed out, there are manifest advantages to be secured by adopting the Company's proposal for n mesaace rate, First of all, there fs" the practical question of the avoidance by the public of a larger fnereneo onthe flat rate basis, and. snonniiy, the message rate "Itself Prodvees_a more efficient and up-to-date procedure, The argument that business firms would find it dimeult to tunervise the unauthorised use of the telephone at times when higher stipervision is absent, is, of course, valid, byt only a valid as the same Consideration applies to consumption of electricity, gas or water by domestic servants when the house Is temporarily bereft of the householder's Council has not yet expressed is. general views on this application, Much will depend on the Report which the Council's financial adviser, the Controller, is able to make upon the whole proves al, He presumably will have further access fo the Company's figures and accounts, and while there will be every Aisoosition to agree that the Shanghai Telenhone Ca, has given Shanghai an excellent and smooth running service. there are larger issver relating to the Company's finance which: will neces sarily require most careful examina tion before unqualified approval can given to the application stands, Tt is as well to make this point clear, for hitherto full gnanciat Information has not yet, been presented to the public. It naturally fould not be until the Councils have taken the matter into consideration.
Text read from the printed page and cleaned; old type leaves the occasional error.