The Chairman of the Public Utilities Committee presented to the Council on April 24 the minutes of meetings of the Committee at which was discussed the application of the Shanghai Telephone Company for permission to increase its tariff in order that it may obtain, as provided the Franchise Agreement, a return on invested capital of eight per cent. plus two per cen. The minutes of these meetings were approved by. the Council.
The Company stated that it had worked out the following modifications in the schedule of rates proposed in its application dated January 48, 1935, with a view to arriving a rate plan which would give temporary relief from April 1, 1935, pending arbitration of the depreciation, US. income tax, and management fee questions which had been raised by the two Counelis, which arbitration in the ordinary course of events would. take many months to conclude: enses, and the annual depreciation charge had been reduced by $150,000, these adjustments being made without prejudice to the Company's rights, Having regard to the experience that had obtained in other places following the change over from flat rate to message rate, the revision of the charges for mastage rate based on a 3714 per cent. reduction in the call ing rate seemed a reasonable compromise between the Company's orig Inal estimate of a 60 per cent. drop and the figure of 25 per cent, ad: vocated in certain quarters. The suggested tariff Involved an increase in revenue of 11.09 per cent, and was estimated to yield a return of 9.22 Per cent. on the capital invested for the year ending March 31, 1936, when it was anticipated there would be a debit balance to Tariff Revision Sus pense Account of some $260,000.
As regarded the various tariff items, the increase in the residential telephones from $7.58 to $840 amounted to 10.818 per cent, as dis-Unet from the total increase asked for of 11.09 per cent, The revised charges of message rate calls seemed
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