"T"'satter than continuing the preset ft Tals Sot used? mote Satek IHE advantages of Shanghai adopting the message rate telephone system
by the four telephone experts, Brown, Mr. Z. H. Hu, Professor S. Inada, and Mr. J. G. Wray, at a meeting of the Public Utilities Committee held on October 28, 'Although the experts stated that they had not, as they were not instructed so to do, taken into consideration the present widespread economic distress in. Shangh was pointed out that by the fat rate system, the Shanghai Telephone' Company made its prot on the small user. It lost money on the large user, The adoption of a measured schedule, however, preserved the balance of power. The small man was encouraged to take up the service, the number of telephones were thereby increased, and the service, as a whole, made more valuable, Major Brown, in the course of discussion, said that he considered the telephone industry had arr ged labour control, as regards measure of output and similar matters, better than any other industry of which he had experience, 'A member of the Committee having expressed the opinion that the report was incomplete, inasmuch as the experts did not give particulars what, if any, increase there should be in the fat rate it the Council decided that it could be retained. Major Brown replied that this was a pimple matter, The return to to the company from April 1 to the: end of July was a fraction less than 10 per cent, But for the loss of prescribed method in the United States.
Major Brown pointed out thet it was to the advantage both of the company and the subscriber that depreciation should be dealt with in this way, since the revenue required had to be earned on $34,000,000 instead of $40,000,000.
considering "Expenditure on Central Office Equipment," a member asked whether the fact that the stations, 10 per cent. would have been obtained by the addition of 11 er cent, to the flat rate.
Mr, Wray pointed out that to raise the flat rate further in order to the necessary return, would Drobably involve a further loss of stations, and so make necessary still further increase,—Thus Income gould not be controled with certainty even by int rate.
At the the experts agreed to state in writ. ing, as an addendum to the report, their opinion as to what would be the charges if a flat rate wore retained, Discussing the pert of the report headed "Plant," Major Brown said had personally interviewed 50 oF 60 subscribers; Ins, Wray said he had talked with 25 to 30. Both experts stated that all these subscribers asserted the service was now very much better than formerly. Major Brown said he had not met many Japanese subscribers, but he very definite and favourable opinions from the few whom he did se Professor Inada remarked that service wat going on quite well, though some of them spoke about the "difficulties in communication witl Chinese territory.
Tt was pointed out that the service being automatic did not requ many Japanese-speaking operators.
When the item "Expenditure" was considered it was explained that "Intangible capital, $80,811" was the amount carried over from the old company, being the difference between the price paid for its assets and subsequent adjustments in valuation. Since conversion to automatic had been further capital. expenditure for development. Major Brown said the sum total investment fiven, of approximately $40,000,000, meant that in 1034" there was appraisal of the whole assets of the company—both those ncquired and those provided up to that date. This entailed the alloa. tions, under the headings given" in the report, of different types of pro erty, to make up the company's {otal capital investment. After the conversion there was necessarily 2 delay in clearing up matters, and an inventory could not be made until July, 1984, Mr. Wray remarked that the $40,000,000 was the result first of all of on inventory in 1934 of the utd company's plant that was then in use, That inventory was appraised at its value on August 5, 1930. The Dalance of the amount was made up of the cost of the new plant and property constructed since 1980, other words, the value of the old property now in use, plus the cost of the new property eénstructed since 1930 amounted. to. $40,000,000.
Text read from the printed page and cleaned; old type leaves the occasional error.