Phone Rates Actually Fell in 1919

Dublin Core

Title

Phone Rates Actually Fell in 1919

Description

A front page headline in the Register of October 4, 1919, stated "Phones Must Go Back to Old Rate." This surprising development was caused by an unusual set of circumstances. In the early 1900's, the Cumberland Telephone Co. of Nashville, Tenn., a licensee of AT&T, owned and operated the telephone exchange in Richmond. The switchboard was on the second floor of a building downtown, and the magneto (crank) telephones in local homes and businesses were connected by cable and by open wire lines on glass insulators. When the telephone franchise in Richmond was granted by the city council in 1894, the council retained power to set the telephone rates. At that time the rates were fixed at $1.50 a month for residence and $2 a month for businesses. That seemed to work pretty well until the U.S. entry into World War I changed things. When our country entered "the great war" in 1918, the federal government took over control of the railroads and telegraph and telephone systems in the whole country. This was to make certain that the rails and wires would always be available for the transportation of troops and the sending of official messages. Most of the employees at the Cumberland exchange at Richmond were kept on, but with federal overseers and control. Another thing the government did right away was to make a hefty increase in the telephone rates. As the war was drawing to a close in the Fall of 1919, the government announced that the telephone systems would be returned to their owners on December 1, and the wartime rates would no longer be required. The Cumberland Co. soon petitioned the city council to allow them to keep the higher war-time rate rather than go back to the rates used before the war. At a special called city council meeting on Oct. 3, attorney J.J. Greenleaf, represented the telephone company. Cumberland had invested about $12,000 in the telephone system in Richmond, he said, and the company was entitled to make a profit of 6 percent. However, it could not make a profit at the lower rate. He cited higher wartime prices for materials as a major factor. Councilman Robert Golden stated that he understood that the company had not spent any significant amount for improvements during the time the higher rates were in effect. Councilmen Mershon, Allman and O'Neil also spoke against continuing the higher rate. After a long discussion, the vote was four to one against the higher rates. So the higher rates were ended, and telephone rentals went back to what they had been before the war.

Creator

Dr. Robert Grise

Date

1/25/1992

Rights

Content may be freely copied for personal and educational purposes with appropriate citation. Permission is required to reprint.

Files

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Collection

Citation

Dr. Robert Grise, “Phone Rates Actually Fell in 1919,” Madison's Heritage Online, accessed October 7, 2022, https://madisonsheritage.eku.edu/items/show/921.