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Incolne based on year of 350 days. Calculation. Yearly traffic Income at 5y2 calls per day $4,812,500 Yearly base rate income. . 3,450,000 Total yearly income on . 250,000 telephones 8,262,500 Total yearly expenses (conservative) , 5,500,000 Surplus for extension 2,762,500 The base rate income is calculated on'50,000 individual lines, 75,000 two party lines and 125,000 four-party lines. This number of automatic tele phones in Chicago, with the saving of thirty seconds that it has been stibwn to 'effect on the average call, would represent an actual saving 0,240, 625,000 minutes per year, which we would virtually add to our composite life, besides the pleasure of having real 20th century telephon'e service. These figures cannot lie You will find by comparison with the costs shown in the Bemis or Hagenah re ports of the Chicago Telephone Com pany that they" are fair, only with au tomatic apparatus we can eliminate at one sweep over a million dollars per year operating costs, and as our yearly costs are nearly stationary per unit of equipment our calls can'in crease each year with the growth and popularity of the systems, bringing increased revenue that will eventual ly when the system has been de veloped fully, so that we will find a 'phone in every home allow the base rate to be gradually reduced and very possibly eliminate in time. This will bring the telephone ser- . vice to the plane of development that we now see in the electric light, the gas service and are about to see in the water service of Chicago. fiy adopting- improvements com parable to that represented by the automatic telephone, we have seen our gas and electric service reduced from year to year in cost to the con sumers and the. quality of service gradually improved. This is because modern methods of production" were adopted and are being adopted as fast as invention makes them commercial, also and more to the point because correct economics were employed in the making of rates so that in some de gree at least each user paid his share in proportion to the benefits derived. Rates Compared. If small users of gas or electric current were charged twenty-one times as much as many of the large users, gas and electric current would be almost prohibitive to the small users. This is precisely the condition we have, however, in the telephone busi ness in Chicago today even after we have paid out thousands of dollars in investigations and reports on the telephone rate matter. The Daily News is a typical case among several thousand others where the subscriber is getting, an average of 52,500 calls for $125. You and I, small users, would pay just twenty-one times as much, or $2,625 for 52,500 calls at the rate of 5 cents per call, consequently our service perforce is limited to what we might in view of the possibilities term emergency service. We can havea 'phone in our residence, it is true, for 5 cents per day," but we can only make one call at 5 cents per day.- If we make more, we pay in proportion, but at the rate of 21 to 1 of what the big firms downtown pay that get their service at this rate of less than J4 cent per call. If nearly half the service brings less than one cent per call and it costs nearly three cents to produce it, who do you suppose pays for the big users' service? The small users, of course, who drops a nickel each time and even then must fight for (his call. I think I have shown you the gross inequity of our present patch-work system of telephone rates. Now what is the remedy? . First, to find a cheaper way to pro duce telephone service. To dotting .-xJ,- 4 4' , ''rttM--i jr itmmammmmmmmi