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To the CiHiiiLil of the Corporalioii ot iliu C'ii\- of (.Ittawa. (ieiitleineii, — I have the honor !o iraiisinii herewith for the information of t'oiincil, two important rtp.nl-- upon te'cplioiie matter^ One is from Mr. I'aul Latzke, a>sisiaiii eililor o\ the Aincricmi Telephone Joiirmil, New N'ork. Mr. I,al/ke vi^iteJ Ottawa diirintj' the month of .Xii^iist, anj as a result ot a coiiterenee which he liad with several members ot the C imcil, it was decided tc> a>-k him to s^'ive us the hcnefit ot th<; expert informalicm al his commantl. The other Report is Irotn Mr. N'ewtonJ, Kei, City Enj.,fineer, \\h(\ at my request, visited Piqu.!. Ohio, last week to examine into ihe workinjj of a new automatic m.uhine telephone exchange. \ou will see from the report itself the uondertul possibilities of the in- vention. As the company which .ontroK ihe patents is about 'o make a test demonstration in thi> cii\-, I ihink it is all the more reason why tlie City Council should defer decisive action. Respect full V submitted, (Si.nied) FRKP. COOK. APPENDIX. t^lMU.l, 0<.\. tilil, \ij02. His W'orsliip Mayor Citiik, City. Dear Sir, In I i^mpli.mce with your instructions F be-,' to report that lui the Jiul arul ',nl inst., f \isiroi.l Pitjiia, Oliii>, in mnipaiiv with other interested parties frutii Ollaua and Toronto, tor ilie purpose ol examininu,'- .inv\ lestinL,'' the .lutomaiie maihine telephone exehani^e in operation in iliai cit\ rile anetilioii, which has recently heeii patented in man\ coun- tries, is the result oi ten years' work and experiment 'n two youni,' C'anaiiians, the l.orimer Hros It is now considered practically per- lect and will at once be manufactured for i,o-neral use. A chart.-r has been obtained in C'anada, inidvr the name of the Canadian Machue Telephone (.'o'_\., Ltd., antl the rii,'-ht \o inaiui- facture and opeiate the exchanj^e in Canaila has li.joti purchased bv this Company. The headquarters ot the e\impany will he established here, and premises \o ;,S') to 390 F5ank street, ( Hreniian's Block) have been rent '1.1 tor their operations. Machinerx will at once be installed tor the manufacture of the exch inL,'e, and a demonstration ot its working will be iTiade at an early date. The diflereuce between automatic exchaiii^'cs and in.inually operated exchaiii^'-es is that in the former the services o\ the central operator ts dispensed with, in makini,"- connectiotis, and a subscriber is placed in electrical connection with any other subscriber In means ot electro mechanical devi.es at the CetUral Station. In ;iddiii.>n to the larye amount saved in operator's wa-'es, yenerally estimated at S5 00 per phone per annum, the in\eiitf>rs of the Lorimer l-lxchanj^'-e claini that their machine will p.-rmit the system to be extended to serve a lar^'-e number of subscribers, 10,000 and upwards, wi hout complicatini,"- the exchani^e ; or increasinj,"^ the number ot cou' ections and contacts, and necessarilv the co.st of construction In manual exchanjjfes the cost of operation increases much more rapidly than the number of subscribers and to maintaiti service in a ia97 1^1 National Library Bfbllotti^que nationaie of Canada du Canada l.ir^'e cxcli.iii^'L' i-- pi opoit'uni.ilcly m i. h iiuui.' oxponsi^ .• thin .i sm ill ore. Tlie Subscribers' Telepluwie, in size and appcar;mre, cKi-.oly rc-CMihk's tiie ones in use iiete, will) llie adililmii I'l a sii.;ii, tiling device U>i cailiiii; '''e dcsireil niimluT I'imu intlicali'i liiiliiMis are nn the faLC of llu- telepiione bnx, >.> ,ii raiii^cJ a^ ii> inJiiMle my number Ir.ini n li' tl the hook, held to the tar, and a small push ballon prcssiHl which rii!L,'^s the usual call bell on the distant •-uli^criber's telephone. The vibration caused by rins^Mntj this bell cm be pi, only heaid .vhene\ei ihe push button i> pressed lnc,i-i the luiniber wanlei.1 is aheaLlv eni,'ai,'ed the line will be pertectly silent. The inellu'd of m ikinL,-- the call w.is p 'rfectly simple ,inJ the lime occupied in makuii,-' connection with the i.lisiant subscriber w,is {rou\ 20 to 25 secitnds . l\illin^Mhe lever tiisi, pre. siuj^ the button, takinj,' the receiver off the hook at the wroni; time, .;nd other efforts to deran'.'e the instrument, siinplv resulted in ha\ ini;' to place the receiver back on the hook to _<;et a Iresh start. The MdcJiiiif l\xch.int,'-e at the central station is built on the per centaj,'e principal and no individual apparatus is rei.]uired li iscom- posed t't units or sections. JCach section is in ilsell a complete telephone exchanj,'e, capable ot' accommodating^; 100 subs ribers and all those sections can be i,'rouped together to torm an exchange as the conditions lequire. Thus, for an exchange of 5,000 capacit, . 50 section.s would be requirevl. The connections between sections are few and simple and are the only ones to be made after the exchtmge is set in place, with the exception of those to the line terininal board. The exchange is operated by an electric motor, a two horse power motor and one atteiuiant is required tor a 5,000 capacity exchange. It is in the expansion of the exchange, section by section, as the business increttses that the I.orimer automatic system has an ad- vantage over the manual switch board system. With the latter system the installation at the beginning mtis; be sulHcientl} huge to provide \ov the mtiximum number of subscribers that ,ire likely to require service, tor a considerable time, thereby necesMialiii;,' ili^' he.iviol expi'mlimii.- inr iIk- nimmnuii oaiiiiiij,'.s cOTtJilioiis l-.ach seclHin o[ tin.' t'xch;in),'t' oc.iipics a space siune 8 feet loiifj, iS iiuhcs wide ,iiui | U ot Iiit,'li. PIk mochaiiiial lonstriiclioti ot ttie iiLiJiine is jjODil, llu- JilloiLiU p.-iils bcin^; ^laiulai Ji/cil, aivos-ibk-, ami Liiiit'kh' taken oul aiul i i.'plati.'J, -.lu'iiUl repairs he necessary. I he iliikiii;,' ru'ise mule as llu- rails come in is no\ unlike llial ma^le hy a telej^iaph ke\. llieserxiie is seer. I, il benii; inipiissihle tor a thuJ p,iil\ to listen lo. iiilertupl, oi ilise.miieil llu'^i i iii^atieil in conversation. The C'onipan_\ uill not quote pi ices for etiiiipmenl until iheir engineers come here lo mstal machinery, itc. i'lu v u ill then he able to i|uiite closer prices upon ulrch lo hase eslimales ihan al pre- sent iiiuvever. ihey state posii i > ^Is ||,,,I the cost oi the iliachuie exillan,L;e equipnienl, irr ispeclix e ol iIk -a\inf^ due to oper.ilion, will he much less ih,ui ihe manual su ilchl>iMr\l s\stv.ni. Demonstralioii st.il lou^ \\ ill soon he eslahlished here, so that the i^'ineral puhlit nia\ h.i\e an oppoiluni'y of testinj,' the s\stem. I he tests madi.- hy m\sell and olher nu nihers iit the \ isitini,' p.arty showed the sysuni lo he ^piick and accurate, with sounds clearly transmilleil, in t',i.-i quih' .s i,'ood as oui j-resenl citv ser\ ice, whicli is unquesiionahK lusi class. While in I'iqua I u .s the recipienl o( many courtesies from Messrs. N. I). .\eid ami (.. \\ . I. .rimer. JM':., respectively (Jeneral .MariHi^er and .Sec'\. Ir^.i^uter ol iIk I ompaiiy, who i,'ave me e\erv opportunity of leslint^ and ifispeclint; the entire swsten-. Ihe technical destripiioii ot ihe sy>tuii, in delail, with which ! was furnished, I have noi incUuleil in this report, as 'i woidd he unintelli^Mble lo .myone bui an electrician. I have fyled the same in this Hepartment for future reference. I have the lu'nor to riniaiii, ^'ours laillifully, S^nl NEWTON J. KER, City luis^ineer. REPORT ON THK TP:LKPH0NE SITUATION IN OTTAWA To III-. Worship, the llouonihli l'>rd Cook, Miiyor of O/t.i •,/. Sir, Auiri^ uikIci mum in-^I riulioiis, I bei,' to siihinil iIk" IoI- lowin^' tin.!-- anil I'l^^iin's .is to tlu' tclcpluMic situation in t.>ltawa, anil ttiL' ativanta^i's aiiiJ ilisaih anla^'cs ol a miiniiipal systom to conipclc with the existinj,^ Mell 'I\'li.'|-hi.Me C\nnpan)-, ami the advanla^'es ind clisadvtintajfes ot ^'ranlin^' .i ttanchise, wIk'm the Corporation o' Ottawa niav he at liberty \.o ilo si\ to a private telephone conipany to iiMiipele with tlie existing' Kell lelephone Company, as now operatmt,' ii' \ our eity : I iken as a whole, tlie te!e|">hone sitnation as it exists to ii:iy in (.Ottawa, is 'alher luttei than that which is tounJ, on the avera^'i-, in towns ot similar si/e, both in the I'niteJ States ,uul Canada, where no iiulependant eompetition exists. 'Ihe apparatus seems well up- to-date, anil the service prompt The sysiiin, so tar as I observed in its use during' my brief sta\ in C")ttaua, is n.|uipped iti the most modern fashion with metallic circuits and central eners,'y. In this respect, it seems, on the uhole, much belter than the systems I tounil in Toronto and Hamilton On the othei hand, however, the rales charf,'ed in Ottawa, are as hi^h as llii'sc charf^eil in Toronto, where the companv lurnishes cimneclion wnh 0,000 subscribers, as a^'ainst j.ooo in C">tt;iwa. I'nder normal conditions, thire would be a diderence, rani,'inj( Irom Jo \o ,V' P'-T c^'"' '" lavor ot C")ttawa. As an otiset to this however, it must be staled that the company in Toronto is adherini^^ to its present rates under protest, and has iMij^'h! repeatediv to secure permission to increase these rates, its plea bein','- that under ihi- present schedule, it is operaim^' at less than cost. This is perhaps true, ,iiul whether true i>r luit, the re- sult is that the Toronto service is \ery poor, and the equipment about ten years behind the times. Naturally, ihe subscribers there are g-ettinj,'- a very low class service, and complaints are heard on every hand. From personal observation, I h ive no hesitancv in saviiij; that the C")ttawa service is very much bettet th;in the Toronto service, and as i^'ood, probahlv. as ;iny service m the I'nited States. This is an important factor, and in reviewini,'' the situation, it should be carefully estimated. A poor ser\ice — where connections are slow and ditricult tii cibtain, where lines are constantly out oi order as is the case with antiquated equipment, where conversation is slow and difficult, and where other defects exist, is almost as b.id as no ser- vice at all. Such conditions entail a loss o\' time, a wear and tear "It ih ru. u,u. dollars ami .cnis. ,s a vcn lar^fe iu-m in daily life, where a Maes, ,t h.,s been the experience o( i.l.phonc companies il.a, the no other. The peoplo. .xpen-nco has .houn. much prefer to meo. he l.,>:h.r J,ar,^cs that ,o necessarily vvith first class eciuipnu ,„ ,„kI .itlendan.v. to pasin^' !. vs tor an inferior service \Mki, 11,0 In.U.pv.iJaii! tj.piu.nc n.ov.nieni Ihsi ne^^a., in the KmuuI II tun. stone was cheap service, .-nd the ex- L'niuil M itos, ii CtlSl' lot lis l-\is|i.,, Uoll (. oitipanios. an lI .is I I . -^ 1 1 ! ^>', a p.olosl a^rainsi Hu. I,i^r|, ,ates chai>,r^ J In i|„. A ivUplii IK uas a lolephone K-. the s.,hs,, ,l,e. s. ■'■nl .IS , UMili, Ih. J,KK.p,„da..t companies that spruPi: up every where. It ul ilt.i, .,s,.ms cot.sUi.c n .ho cheapest tnaniu. p"!,!!;!". I ho tosni. was mev.taWo. \V„I, ,ho kindliest toolin. „, ,|,o uoiKI -wards ,1,0 ,i,u. o.-mpa>ti.s. iho pnhlio co„ld not ^n, ,het,t .ho sup. po t ,l,ov u,.,iKi |,.„, „|..d T|„.o is on nio i„ ,,r olHco. a report luatMM ''"'^'''•'"'^•';' '^-'H^lu.no olliotal which, „ i, ,s typical of the s ua ton as M provatloJ a..J as „ ntay proye , sotiil to No nr Worship a.dtheanihoii.ios.. Ot.a^vau, con^iderinj, tlu- .on.,, I tolophoi! s.tuat,o,^ and m,,v insu, o a^ains, I.,. al mistakes, | take ,ho lihoMv Of atlachin^^ hereto. As „ ,. , , on.idon.ial documen., I -nus, request, hou.eor, that x o„ ilo i,ol ,nak. ,, p„hl,o. I he IndepeiiJaiit Cdinpaiiios lia\e j^ener.illy seen I heir itiis|,,ke-. v^here poor construction uaspu. ,„, ihov .ov pra.-.,o.;iK lehuilJi and stariinij out now. -pcraliiiw ill I),,. Ciiiu.J .Si.iifs. and ill o\ el \ iitipoi i.inr coiitro. I'ui: (ii.Astitnv i:\i'i-:RiMK,\i poles, are ,i,'onorall\ tiisi take ■ ■ P^.es. are ,i,.onora,.y n,s, Uass. Where ,hev have made their mis- lake IS m putting: "n cheap a.td interior telephones and switchboards lhe.se may serve their purpose until the users are educated „p ,o ,i noint where ,hoy know u I,,,, lelophony is. when thes uill eonio with :i (liMii.tnil fiT iip-ti>-ilate rippnraliis lliat the iminicipalities will have In meet. At kasi Ihiv winilvl ' il ic i.a«««' III III li real Britain the subscrihfrs may rerriHiii satisfieJ wiili iheir aniiqiialo^l service, lluuij^h in l.>iiKli>n, at least, the aiiilu'riti •viiicnlU' think otherwise, fur there the new system instaiUJ In ilie lieiieral I'l'si t>rtioe Departmi'iii, is lh»'rini^;hl\ iip-ii'-ilale, aiul pnniorliimatelv :ostly. ri'o eiiiiipmcnl was iiistalli-tl hy a mamitailiirinf^ ciin- cern .)> Chicago, 111., aiui carries ill the lievices that ^five us heri' such a prompt aiul cil'icieiit service, lilas^'ow, on the i>iIut hand, proccilin^ , the cheap tiieory, aiiJ .!>• its iiiuniiipal systei is the tirsi ti> he in oper.ition, anil a-- its system i-- the lar^'e^t ot .iny 111 I he mi)nii.ipal svsieins unJer way, ii> experience si) t.ir is interestini; .\cie>rdinij ti> the latest report, the actual cish spent on the plant up to Jate, is $HHu,ooi) I'his ha-, ptiniileil 5,4711 lines conipletei! .nul Aoikinj^. and H,7h7 paili.il mnpleteil lines Th I ost pcT subscriber's liiiL, when the whole s\slein is lomplcleJ, it is li^Mireil, will 1"> about ^117 u^ ,\I oilern consii uelinn, as il is unJer- stoi il b\ advanced telephone en>;ineers, aiul practiced hv private Ci'inpauies that have a ilue rejjard for coninierciHl success, applied to the Cilas^ow system, Wiiuld have iiuolvctl an expenditure of at le.ist twice this sum, or in the neij,'hboi lunul ot Suio.ro pet subscriber or station, .IS it is technically known. It remains to he seen whether liie peiMile i>l (ilas''o\\ uill lest conleiil uilh the sort ot service that ihle 111 turnish In llu r v the plant beiiit; installed inU Stall lliere are and h;oe been, no municipal plants, but the " mutu.al coir.p.inies " lliat i.,iine inti> beint,' shortly after the expiration of the contrnllinj.^ Hell patents, are somewhat analaiious. Iluse companies were or^'aiii/ed by ttie business men ot ihe \,iriini. cities where they operateii, tor the purpose of doinj,' jusl what ihe municip.il pl.ints are suppose d 1. t\ th e cities 111 (ireat Britain, nan th .cure cheap telephony. .Almost without exccptiiMi, these inutu.il companies came tii i;rief, alter an existence ix years. Mecause their systems could not ranirini.'' tri^m tw. irr\ ihe b -.rden the steadily increasing' business, they found lliemselves lace to face with the necessity of discardinj^ entirely their old ee|uipment, and puttin^-^ in a new >vstem. .-\s no provision had been made fi>r this by providinj.j a proper fund for depreciation and renewals, these mutual companies have, with few exceptions, been absorbeil b\ private capital, jndj^'^in^ from the latest linancial re poll, the Cil,istr,nv system will, sooner or later, jLfo through the same process, unless the citizens are content later, to see their rates in- creased, or to ijo into their pockets, after ,1 half a dozen years and proviile tor rebuildmt The (iI.isi,'-ow rate to-dav is $26, 00 per year for unlimited service. The report for the nine working months, shows that the expenses have been at the rate of about Suj.oo per vear, inckuliuj,'' interest, sinking tund, etc. This would apparently leave a workinj,' prolt of Sh.c)o for each subscriber ; but the report admits that no allowance has been made in this estimate for depre- ciation and maintenance. ni'I'RK' lAimX WD M AINTEXAXfl-:. It is I„ ilils ,t.-,n ihai Ihe -roal claMf,'LM lie. t,, all uiio ^o Uuo .Kphony i.lMKlly ,, i. ,ho i,en, thai has .auscd s- per .cnt o. the rouble amoMK' ihc Indep.nJanf companies ot the L-nited States and that may be rehed on for Iro.ible in (ilas^^nv and other munielpalities abroad, u here the service is cont. oiled by the Corporation. Some- how, noth>n- short of experience -j-enerailv bitter experience- seems able to impress the impo-tance .f the factor of deprecin-'on on corporations, pri^a.e or public, that become involved .1, telephone problems I his is due p robably ,0 the fact that telephonv is a new .irt. vMiile the I. ell (. on, panics have been in operation for over 2; year:,, no ^^eneral knowled-e o\ telephone construction and man.-.ire ^'.''"'u n", " ^llfli.sed, except within the past five or six vears Ihe Bell Companies, Irom the start, have worked under a cloak of secrecy hvervthin^ pertaining: to the art was jealouslv ^niarded. •No statistics were allow. to be made public. For this reason the newcomers who enlereu the field, .after the expiration of the ,Mell patents, had to buy, at enormous expens,, the knouled.^e necessarv tor successful operation It iso.ily now that, thanks to the lioldin^: of conventions by th. Independent operaln,-., where experiences are exchan^red and fi^nuvs compared, that we are arrivin- .at anvthin- like conclusive data rcKardin- the cost ol maintenance and'otlu'r Items connected with telephone operation. The thing that is most clearly shown by the expeiience ol the operators who have come toj,rether, IS that the item of depreciation, under the most conservjtive andcaretui manat^ement, amounts at le.ast to ten per re,n a v-ir and frequently more. Where the-system is not thoruut^hlv built'aj the outset, and where antiquated apparatus is installed, the item of depreciation runs very much hij,rher. .\n average of ten per cent is on the whole, under, rather than over, the mark. On this basis 'the Glasgow .system .s actually losin- over S.^oo per subscriber. When It i.s considered that it i.s starting at the outset with poor instrrments and inferior switchboards, the item of depreciation that must be encountered, is probably nea er 20 than 10 percent. In other words anent.re replacement of switchboard and instrument plant must he expected m.ide of five years, or the subscribers must do withverv PoorservK-e. Phis is not speculation, but fact, ba.sed on careiull'v compiled h-ures by the best teleplione engineers in the field to-day.' COST OK IXST.VF.I.IXt. .\ MODKRN TKIJ-PHOXi: SVSTl'M In estimating the cost of installing a modern telephone system in Ottawa, it must be borne in mind veis clearly that no exact fi'-ures can be given except after an actu.al survev of the ground by a "^-om- petent engineer with proper assistance. Such a survev would require at least two weeks, ,nui involve an oullav of between S700 and M,oon, It >voukl be necess.irv to ,iscertain : /-/>.?/.— The most aJvniitai^cous Ioc:ition of ,i central cxclianf,'e. Sfcoiu/. I'Ik' miniher vi| miles o\ eoiuli iits to be constructed, ivmi4 the hesi anil most economical service. with a \ie\\ to 77//>(/. — The , lumber ol miles ot aerial or pole lines. /•(-///•///. — Tlu' cost and character ot cunneclions. Fi/f/i.—'\\\Q averai^e number o\' wire miles for eac .SV.vM.-Miseei wav, etc. aneous qLieslions, such 1 subscriber. IS the cost of rij,'hts of .Ml these dnestions, pre.sent a different aspect in almo.st every place, and uhih- ,ui avera^'e cost may be put down, it must after all bebuta-uess In conduit construci ion. everything- depends upon l.ie nature of the top d.essin- and sub-soil. The cost of buildin-^ a loot of conduit ,n a sir.et where the top dressing' is asphalt and '''the sub-so.l rock, ma> ru , up lo S4.00 as ai^Minst Si .50 where the ton dress.nj,' ,s cobble and 1 he sub soil soft earth. AVhen it is considered th.it the average conduit construction in a city as lartre as Ottawa ran-es from three to six miles, there is a pois.^ble variation in this Item alone ot $5,^000. Of course this is extreme, and so far as the o.siot constructing condits per foot is concerned, it may be accurately rc.iched Irom ihe experience of your City Kngineer. .As I understand It, he estim.ated that such conduit construction in Ottawa would co.st about !hio,ooo per mile. There is nothing, however, in his experi- ence, nor yd m Ihe experience ol the existing telephone companv. to show how many miles of conduit it might be necessarv or advisable to build Ihe conclusion is being rapidiv reached 'in the United Slates that m the long run, there is nothing that is so certain to return a good investment, as the burving oi practically all wires Where a tew years ago. municipalities found themselves' compelled to use physic! force m securing the burial of telephone, telec^raph anu electric light wires ; where even the most stringent ordiimnces lh.it were passed could not bring this about, to-day the operatinL- companies m la.ge cities, almost withcuit exception, are only too Had to put their wires anderground on their own initiative, because experience has shown them that this is the m-st economical course in the end. in manv instances, it has been shown that wi,-es run under- ground could be man tained at 50 per cent less than overhead wires \nd, almost as important, experience has shown that an uninterl nipted service, especially in the storms u inter months, may be had ■mly where the wires are buried Hearing these fact, in mind, modern telephone companies are evervwhere incre,-,ain- their underground construction, but the extent of this construction an onlv be ascer- .ained by ;i caretul survey. lO The miles >,t aorial lines ,., h, |-„i|, .i,,,;,,,,,,, ,..,„ ,„,,,. h, ascer- tained hy an actual survey. C>, ,., ,,„.., „i„ ,„,, ,,.;,, ^i J^, as mucl, w,re eo„s>ruc,ion a. ,he other. The avera,. "numb" , m es .t w,re required to connect each M.hscriher with ll,e centrd olltce. therefore var.e. enortnously. CarelulU cn.piled h^M.res .he -example that ,nBalt,more. Md.. only three-tenths c^ a mile of utre ,s reumred on the average. .0 connect a subscriber with ,1c exchanj^e. In Indian .poiis, on the other hand, each subscriber r e - ^ju.res on an averaj,^e. four and eiirh, -tenths miles of wire to be furm.hed h,m In Chica,.., 111. each subscriber consum s ree j.'Kl e,,^lH ,e:,,hs o. a n.ile, while in .Xashville. renn.. onK -o , e hundred.hs uf a mtle ,s consumed. In HufTalo. X. V . , he I eU Com pany has anp,ox,mately 300 n,ore subscribers than ha 1 1^ Be Co pan, ,n .M.lwaukee. Wis., or .,.,00 as a^^ainst 9,000. Ve,„he ormer c„y, the companv has onh ,..000 miles of'wire. wM e 1^ ..tier ,t has .S,ooo m.les o. wire. The Milwaukee Companv too Has ,;„<„om,lesof „s wire under.^^round, or more than he' ,0 a! -.ecHu.pment of the Buffalo cotnpanv. while the latte has o K ..;--" »- Ottawa, -as a tl^Js fo n ,ed S , ! '''^"" "'^' ^^P^^'^'^-'^ -' contractors in the L ni,ed States, where modern .onstruction h.is bee 1 emploved. / .ni.h 'inV'-f ^"i",''' ■"*""• -'^-■''i'-^ 5.^-000 popula,ion. the Plar^, vi r's" ri' I^'^P'"'"^' ^'--P-'^ ----tly has c-omple ed a plan, sv.th ,„So., telephones connected, and 4,800 ultimate cmacitv The cost of construction was S,.6.,, per s' bscriber's e T Si nah Ga • li^ic'rh:"" '^'^f^""' ^'"' ' '""^^^^''f^'^ ^'-"P--' ''^^^^- nah, Ga,. ..h,ch has a population ot 54,000, has a plan, with , 8,1 telephones conn cted, and ...v- uUima.e capacitv The p, nt cos $127.00 per subscriber's line. These two are a fair average the cos varyin.Hrom 8, .0.00 per subsciber's line to $,,0.00 per :. bscrlber' pas hre ;r "^^ advantage ot all that has been learned in the past three or lour years ccncerni.ig economical telephone cons- 1 1 tructii)!), ihat a syMon. o( _;,no,j tok'^lioiios could he built in Ottawa for S^>H,,uoo iu rouiul ruimhers. .\,n p.rposition, « luiher it was controlled by the iminuip.Jity c, bv a private eorp.uaiion, would havelotace at least this exp.ndilure it il was desired to have a complete, up to-dale plant that uvnikl stand wear and tear and present an ailvanta^eons in\rstmeni COST OI' Ol'KRATIO.V. On this basis, ihc cost ol operation per year would be about as tollows : neprecialion and Maintenance. loper cent.,. S-;h,ooo Interest on Capital, ^ per cent is'ooo Cost .^( Operaton ,^;^^^^ ''"^"''' 884,000 •Ihis would le.ive the plant inl;Kl aiul in -ood shape at the end ot each y,ar, but does not prp\ ide lor profits in the case of a private corporation, or for a sinkin- tund in the case ot municipal operation. This would involve a ch.,rj,re of S.8 00 a vear for every subscri- ber to meet hxed chai-es alone. To provide for profits or sinkintj tund, would mean from 5 lo 10 per cent, extra on the investment accordingly as the system was hnanced, or a fixed char^^e of from *6.oo to S12.00 more per subscriber, so thai service could not be given for less than from $:;4 00 to $^r 00 per annum. THK CRK.ATKR THH .\U.MBliR Ol- .SL'BSCRIBKRS, THK GRH.ATKR THl' COST OF CONSTRUCTION .AND OPERATION. On the fa.e of it, this wmild make out almost a ca-e to iustifv the present rates charged in Ottawa by the Bell Company, namely i>3o.oo and 845.00. Bu- it must be borne in mind that ihe figures given, are based, by the request oi' Vow Worship, on a service of 3,000 telephones, whereas the Bell Company is operating less than i.ooo. I his will at once reduce the cost in three directions: FiKs/. in.-tallii^g 2,000 as against 3,000 telephones. Senwtf. the cost of operating 2,000 as against 3,000 telephones. r/iird, the lower proportional cost of handling 2,000 subscribers as against 3,000 subscribers. On its face, this latter p.opositiun probablv appears paradoxical In almost every enterprise known to-day, it is an axiom that the lar' ger the output or trallic, the smaller the relative cost. In the tele 12 C e'e, phoiK- hiisiness, the reverse is true. It costs ininh more, per tele- phone, to install ;,,oo» telephones than it Joes i.ooo. AnJ it costs proportionately more per subscriber, to iiperale and eMli;iui,'e with ;,,ooo subscribers than it cU^es 2.000. In nthet words the greater the number of subscribers, the ijrealcr ihe .\'st for each individual to the sjstein. livery subscriber who conies into an exchanije must be fitted out with two wires, extending; trom th instrument in his house to the central ollice. .\l I he central olli these wires are connected to the suitchboard w Ih every t)ther '•ub- scriber in the exchantje. Naturally, in an exchanj/e where there are only 2,000 subscribers, the cost ti'r making these connections is pro- portionately less than it would he in an exJiange where connection had to be made with .^,000 subscribers The tost ofsuch connection increases rapidly with the number ot subscribers, sn ilmi in con- structinga small exchange of" 400 or 500 subsLribers, what is known as the switchboard cosi is something like $50 per subscriber less than it would be to make the connection in an exchange with 3,000 sub scribers. Without going into technical det.iils, this must be apparent to anyone who will give the matter a moment's thought. And after coimection is eflected, the pn^cess continues alorT' the same lines, and for very manifest reasons A person who is con- nected with an exchange where there are onl\ 500 .nhcr subscribers will, naturally, onlv have 500 persons to uliom he can talk over the wire. .\s of these 500 he will prooably not knov,- mer 50, or at anv rate, not have business dealings u ith o\er 50, his circle of probable calls i- restricted to that number Ol these 50 he will probable nf;t want to communicate with more than 5 in the course of one d.iv. Therefore, only ^ calls will issue from his instrument in the course of 24 hours to require the attention of the operator. it, on the other hand, a subscriber is connected with an exch.inge in which there are 5,000 other subscribers, his circle will be increased proportionately. Instead of having 50 people in the exchange whom he knows and with whom he may have business relations, there mav be 5.-0, and instead ot 5 calls a day he may have 50 calls. Naturally" then he will require ten times as much attention from the oper.ttor, and every other subscriber being in the same position, it will requiie not teii times as many operators in .m exchange of 5,000 as it does in an exchange of 500, but a great many more These figures may be somewhat extreme, but they will sullice to make clear a problem'that has, in its day, vexed almost every telephone subscriber who has been told by the company that the greater ilie number ot subscribers the greater the cost for each. Ft is the failure to recognize this pecular paradox in telephony, that has got a number of telephone companies in the Lnited St.ites into trouble. Going into a new field, they made a flat rate that «3 seemed iustified by the tlun cxisiin^r number of siibscribtrs. The new rate would briii^^ an mtlux of subscribers, so that the subscrip- tion li .t vvouiil be cioublt-d and trebled and the (iperatinij And con- struction costs atTectcd proportionately. Ai this very moment, two ot tlu- laiKenl Independent Companies ii^ tiie Inited States, one in Cleveland, O , and one in Haltimore, Md., are petitioning the councils ol their respecii\e cities, for permission to raise their rates. If the municipal systems in (.real Britain ^nve the sort of service that will attract business, ihe\ oo, with the rate', t'lat thiy are makin>r, will fmd themselves in a position where they mns. ,.sk an increase for their service, or else lose money. The j'ost Office Department in London has anticipated the situation by offering its patrons w' .( are known as message rates If he chc oses, he may also have a flat rate, giving him unlim ted service, but this has been fixed at $85.00 per year in advance, or the same as the National Telephone Company's old rate. In New N'ork city, the message rate system was introduced several years ajjo. Owing to the large number of subscribers with which it was possible to j^et connection, the New N'ork Company's tariff was trcm $175.00 to $250.00 a year on ; Hat h.isis, that is a subscriber could get as many calls as he chose Almost every year, the rate was increased, owing to the large incre.se in new - iibscriners, which made the service relatively more expensive. The New V'ork public protested in vain against the continual increase, and the company was unable to make its positi n clear, owing to its inabilitv to explain the paradox Now it is possible, under the message rate .system to get^residence telephone message in New \'ork for $45.00 and'business at 860.00 a year, on what is known as a party line, and excess mess- ages are charged for at the rate of 8 cents each. RATES. In order that yout Worship md the authorities of Ottawa may compye the rates that you are now paying, I wrote to a number of cities in the United States, whose population is approximately the .same as that ot Ottawa ! .ippend the answers to my queries.' The Bell rates in these cities before they had competition, was as follows : — City. Business rates. ••>ie, Pa $75 00 Savannah, (.ia. Daluth, Minn Des .Moines. Ia . Charleston, S. C. Youngstow n, (.■> . . 60 00 .s-t 00 100 00 Go 00 84 00 Residence rates. $50 00 3b GO 54 00 ^75 ^'"-> 50 00 $36 00 48 00 60 00 '4 N\>. o( I'flt'phoiu liiiit-pt'iiili-iii IvaleH I pt'i \ i-arl. Uk-W K.ilcs 1 |U'r \r.ir t. Iiiilt'(H'iiJt'nI ' Hrll. iMisim-Ns. Ivi'siilciU't' Kric-, l':i 1500 1000 $40 Siiv.iiHi.ili, Cia. i8ri IIKK) 4-! Huliilli, .Minn.. iSoo l()0<) .^0 Hi's .Moiiu's, 1.1. J 51)11 1 1 00 M> t'liarU'ston, s.i lUOM 40 Wninystiiv^ n. ii iNon 1 "lOO 3*' $28 -4 I ^4 jb S24 .•4 ,Sl!S " - lills ni'ss. Ivi'siilitici- *-- Sso. . '■" .■!'> 1 S4 ^.i5 54 S 1 8 .V' lKu\ M J4 (ii>\vn \,i \ v.iry .S4 down ,?o down " F .RTV I.INK" R.XTF.S. Since the Independents Ikivc come into the field, tlie Hell people have endi.'uvored to tneel competilion hy extending what are known as party lines On these p.irl) lines, anyuhere from two to six or more insiriiments ,i the Lontraiv, is practicallv .u.lv ni-its infaiav a.ul a new mvonti.Mi may comv i». morrow i hat u ill t|,n,w out oi com- mission evcrylhinK '^ use to Jay. Kor exampi... ilu- entire telephone eonnmmily is striMn^,' alter a practical, automatic syster., one that will do away with the central operators entirely. A number of such systems a c already on the market, and in Fail River, Mass and half a dozen other towns, automatic systems are actualls at work The Indepe-'enl companies in i olumhus and [^av'ton O have announced that they are f^oin^j to install these' systems. ' and in ehicaf,-o. Ill,, an automatic system will, it is announced, also be put to work. Conservative telephone men do not place great relia.ice on the automatic systems now in the field, notwithstaiulintr that they are at work in these various places. But thev all admit that it is probably a question ot time only when som.-lhinj;^ will come alon-r that will replace the present methods and destroy the value ot much ol the property now in use. Another fact that is sure to make trouble for the persons res- ponsible tor the operation of a municipal svstem, is the peculiar condition that forces a,i increase in rates with an increased number o( subscribers When a satisfactory tariF s.stem has been estnt.- l.shed, this d.lliculty will disappear, but at '■.resent no such tariff system is m sijjht and the whole telephone world issreculatin- on a method of -harf^inf; that uiU be at once just to the subscriber", and to tho.se turnishinj^- service. The perishable nature of telephone equipment, necessitating such a lary:e depreciation lund, presents a serious difficulty in pro- vidint,- for a sinking fund, in the case of a municipal svstem. .At the hesi, only a limited ULimber of tax payers, may be had as telephone subscribers. The percentage of telephone users in the United States averages, even m the most congested centers of population, less thatl lour per cent In a few communities, it runs very high, being one .n fifteen, 15ut this ratio holds good only in one or two uninportant places. So small a percentage of the population being telephone users ,t will seem a great burden to the vast majority, to be com- pelled to carry the necessary bond issue lo provide tor constuction even tho igh the plant be self-sustaining. To m,,ke a plant self-sustaining, experience has shown in the ndependent field, requires great ability, keen judgment, and much bustness acumen. This, in the face of the fact ihat a private com- pany has c. rtain sources of revenue such as toll charges, from which •I municipality would b- excluded. Almost every Independent com- pany, operating ui the United States, has its lines extending into the country. Over these lines, these companies charge tolls which help out llu' l,'(.-ihm;i1 reioipts ,iiul I'poiatin^ fxpi'iises vitv matcrijilly. A niuniiipalilN , dI' i)eiessii\ , unilil iiol i^o inlo llu- toll liiiL' hiisiruss. riu' p:i\ slalioii s\sU'm, which is bomul incvilahK to i^tow, with l^Toat slridcs, a^ the use ol iho li.l>.'phiMK' bi'ionK's inoro jji^oiii'iai, offers ciuMoss oppi.rlimilies for pt.lv ll)ie\cr\ aiul iiuol\L'ti Lol'ci'ion arrani;er)ionts, .ihnosi impo-sible with niimii ipal ounorship. .\h(ttawa to i;o into business on its own acciiuni, il winiKl, in m\ opinion, be equallv unwise to tie the c'.ty up with the liell (.'ompany for another ten years or even five years. While the rates, as I have imdertaken to make clear, charj.^ed in C")itawa are not exorbitant as Hell rates ^o, they are still hij,Hi, and an Independent company with ample capital, could no diHi'M he found that would tfive as fjood a service tor less money. The Si ,500 a year that the Bell Company pays, even if it were increaseil to $5,000 as I believe has been proposetl, uould not compensate for the \aluable ris^'hts that would he i^'iven into the ex- clu.sive keepini,^ of that corporation. The thini,', as I take it, that Ottawa wants, is not 81,500 or 85,000 a year, hut a first class, up-to-date telephone service, at a reasonable rate. This the Hell Company will Ljive only so loni,^ as it has to. If the Compan\- is in a position, where, at any time, ir may expect to meet competition, it will keep its service keyed up. I'nder the contract proposed, it could not, of course, increase its rates, but it could \er\ m.ich decrease its elFicienc), and save as much money as ihoutih it did increase its rates. It would be impossible to draw a form of con- tract that would compel the Company to keep on i^ivint^ first cla.ss service — the sort oi' service that it is now apparentK i^ivini.,'. The excellence of its service al the present 'ime, mav be due to the efTiciency o( its manat,'^er, its aw.ikened business sense, or to the desire to conciliate the people with the hope of enticing them inlo a It llu' Diuniiii,. ! !'-,ri; ,.,,,,,. „. dis.a.Kc lines o. ,he Hell ci; n^;, X^'Vil^Vr^ ^f "^ ''^ '"^ uhy .he exclusive tV.nch.se en.ovJd 'rO J. ■' ' "^^V^^^^' -«''-' newed. The ue.kness .,( , I, i i '■'••'^v... sho.lj not he re- lar^elv in tl^ u t^u ,hev :',• - it'^"''''^ """'^=''"^^ '^ '-" ;.-e serviee in ..4;;,;^^; ii- ^ x 'h jh^;:;; 'yI^^ .^^ f ' th,s .ondmon -Hein^^x.rvraMdlvuipedou, T 1, I,, ^^ •^''■'"' huilt everywhere. ,n,d i. i. al,,. ,),. poss hie '"'' ^'"'"*^ ^•onntry, to,alkov.rOc>uor7.. nirsofin "'r ^r'"^'"" ^" ""^ the nex. two or three ve.rs , ,h '"^-■•P«-'-Klt'-,t Imes. Within Ih^mnuon Cunetnnienl is ,.oin.r I'o .1,, ., , ^ ^'''ada the I-nden, C^on-panies n, thet' ! H. 'W .^ h";:;;:;'^; • """ ''" '"'"■ ^even years ,o aeeomplish, there is cerA n .\ h ^'"""'^-'t^' •'■>' '^r telephony throuf,4,ou the IVovi nee o ' 1 ' ^! ^''^^ ^''^^P'^^'^nt "f -r'^f ■ '^^-' ^^"-- -^'-c.:: „ u,?';:;;'^/ ;;: '^•' ■ -'---^ 'l.e Independent movement in fu.id. is h , ■ u ^V''""''"'"'^"'' vears, to jump ahead at a ", "''*^'' '^ '^"""^'^ ^^"hm the next few Ottawa oit ofthe^;;;!, , tC;;r ^';;:;:;^h "' "", '^" ^^^-^ ^- " -';.ic. materially atle!^, the Husme J i l^St^'^^v oircilv^'^I^M' are e ose v connected with ,h . f . - '-"^' "hich .he independent ^omilars'a:^;!:^;;;:^;;;:;;:,''''"^^^ ^-'--- ^^'-- A TO TWO THLHl'HOXK SVSTKMS IN ONI- CITV Comf^nn i:S.;'K;^;rStar.Tr"t"'''\^'^'"^ ^^^-'' b>- -he 'eel! telepEon; .stems m o L^" ^^ ^ aclll'd " ^'^^'"" T •^^'^'"^ '^^■" loses its force entirelv The • .n ^'''P^'-;^"'--^ th.s objection companv. alwavscreae,al.r.. h^ 1 "'" '"''^P'-^"^-'". telephone J^rea\ manv in.n.nc" his' n^^ise^;' '"" 't^'""*^ "^^'■- '" ^ cent.; almost invariably V:n;:;;:;:r:;7c;nt^°A,"^ '^" ^^^ prof,^ress,ve business man will a.^ree th tTh 'r . ."'''' ^''^'y people with whom he can h, . Pi . ^'^■'*'"' "'^ number of ior Cis b.sin.ss imel^^ 'Rr h 7 Xr^T'^H "■"""' '''^ "^^"^^ tions. but it would he .lifV. » r , ^''>' ^"^ '^"^^ 'ew excep- instead of hav,:; "li^v!; li titJT r^^hrcatl' ^^ ' ': ?"^-' ;o^Mmn?:n^;;s-.;^-- --. --.^.1;:;:^.: :;:;^:^;: to carry two telephones tL "'r""" ''^^""S'h bein^,^ compelled always\esults i7tt cuttinlof B°e "r-ftef ^" '"'^^P-^-t con^pany a business man gets the i sf c^f tw te ' '° ."' '" "^^"^^ '"-^^^'nces, paidforone, soLtimes or e-''^\tf^^'^^'"^.'^ ^'" "'^ "^^^^^ than he less. An exammation of the table on p.if,'c I I, uill slunv how iMies ,iie iitfuLled by llu- mmin^' o\ the Irule- pendciu* I lio allc^'cil ' ruiisance " of mainiitiiiif^' twn ti-lcphmic system". Joe- not exist to any apptoi-iahli.' i-xtent. Kven it this in A nui-.t vioL'!)! tov.it, it umuU yot he more tlian re.ise ot persoi.s who wimlil he avail- New \ork, r.S.A., September 27, 11102. PALM, I,AT/Ki:. >9 Approximate JolaiU'd .oM p.r M.hs.rihcr o !h J.DOO S aiKi with .5.000 subscribt;r«, 3,500 ultimate capacity.'"' "'^^"r::. """' ■=•'""' ^"hs^rih.rs, ,.,.500 ultimate capacityr •».ooo j ^,a . SubMcribers. Subscribers. *. Kiuluils ... rml.TijroiKul cililr iHoilu-.ul i-.iblf ■■■....'.. VoU'-. per ■.ulisi.ribiT '.'.'.*.". Mfss,.nvj.T « irf, .uuviiijf. l.i'b'orVetc. *. ros-. .iiiii> .iiilI i^Uis-, in pl.iii- ' " ' H,iri> will- in platt' . T.rmin .1 hoxos, pl.uVo'nns' 'exchang; ' terminal ' co lu-clions, wire, etc. . . Kroni poll- to s.ibs.rilvrs house n..T,or wiring,, UK,., bu.Kli,,^; >,,: '{^tVr^^;; ::^:,:: Swilihlni.iril iMlllllilll; Si.i 00 $ 1 7 00 IJ 00 1 s (X) 12 00 14 00 II 00 13 00 6 00 f> 50 2 00 i 50 9 00 10 00 .1 50 3 50 7 00 7 00 i 00 J 50 9 .SO 50 13 00 14 00 8 00 8 00 Total . Ill 50 '^3 50