This is a bill to prevent the enforcement of an ordinance of the City of Louisville fixing telephone rates, passed in 1909, after the attempt of the city to deprive the appellee of its franchise, when that seemed likely to fail. See Louisville v. Cumberland Telephone & Telegraph Co., 224 U.S. 649. The question raised is the usual one of confiscation.
The Judge's values were:
Plant, including toll lines ................. $1575000.00 Real estate ................................. 162000.00 Supplies on hand ............................ 18000.00 Working capital ............................. 33000.00 ___________ $1788000.00 Gross earnings for 1908, including 15% of receipts from toll lines. This was undisputed ............................... $325838.30 The court added 10% more of the toll line receipts, making .................... 330926.38 The Master was of opinion that the remaining 85% should be added, making the total gross earnings ................. 369087.00 For the purpose of such an estimate as this we think that the toll lines should be either in or out, and if they are to be counted in the property upon which the appellee is not to be prevented by
law from earning a fair return, as they are above, and the expenses charged to the appellee, the whole return from them should be added to the gross earnings of the appellee. So we take the total gross earnings as .............. $369087.00 Expenses as found by the Master and accepted by the Judge ...................... $216363.07 But this includes amount charged to the Exchange for the use of real estate (less expenses for repairs), which, in view of the inclusion of real estate above, it should not ........... 11707.52 __________ $204655.55 Deduct corrected expenses from gross earnings ................................. 204655.55 __________ Net earnings ............................. $164431.45 Even if we deduct from the net earnings a sum estimated by the Judge as necessary above actual expenditures of 1908 to make good average depreciation ........ 24095.02 __________ we have .................................. $140336.43 which is nearly eight per cent. on the estimated value. The Master prophesies a falling off for the first year of ................................ 30000.00 __________ which would leave ........................... $110336.43 or over six per cent. on the valuation assumed.
Suppose now that we leave out the toll lines. Plant with real estate &c. as above ......... $1788000.00 Deduct toll lines estimated at .............. 125000.00 ___________ $1663000.00 Gross earnings .............................. 325838.30 Less 15% from toll lines .................... 7632.11 __________ $318206.19 Expenses .......................... $216363.07 Less amount charged for use of real estate as above ........ 11707.52 __________ $204655.55 Less toll line expenses which if estimated (in the absence of satisfactory proof as to their amount) by dividing expenses in proportion to receipts would be approximately 30000.00 __________ $174655.55 Deduct corrected expenses from gross earnings ................................. 174655.55 __________ $143550.64 Additional deduction for depreciation as before ................................... 24095.02 __________ $119455.62 Which is nearly 7 per cent. or deducting for loss of custom the first year ........ 30000.00 _________ $89455.62 which is just above five per cent. on the Judge's valuation.
Decree reversed without prejudice.
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