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«
HE BELL system of
Canada, along with
ana American Telephone
met Telegraph, is now a
: communications em-
ae for whom the provi-
a n of national telephone
Tvice is merely an inci-
Roe part of growing in-
€rnational activities.”

This is part of an 1l1-
Page brief the Communist

». {arty of Canada submitted

to the Board of Transport
Ommissioners in Ottawa
On May 26.

pehe brief was submitted
a a hearing called to re-
1€w the basis upon which

€ board authorizes Bell’s
ariffs,

Telephone rates in Can-
Sal are at present con-
Tr €d by the Board of
eet Commissioners;
. Only with the aim of

Ping earnings down to

‘43 per share.

oa brief maintains that
aan Testrictions are more
j ms meaningless, since
Se € number. of shares
. €ases, the same earn-
Per share may repre-
tal a vastly increased to-

profit. And, in fact,

the Bell Telephone Com-

ney does regularly issue
Ights” to purchase addi-

tional stock at. less than
market cost.

Such “rights” are only
issued to existing share-
holders and thus they dis-
tribute surplus _ profits
among those shareholders
who can afford the capital
to take advantage of them.

The brief also gives an
impressive assortment of
facts and figures to back
up the assumption that ex-
cess: profits are, or could
very easily be, transferred
elsewhere through subsi-
diaries and_ interlocking
directorates.

Bell directors have con-
nections in an interesting
collection of companies.
Morgan, Rockefeller, Mel-
lon and Dupont group com-
panies, four of Canada’s
major banks, 15 insurance
companies, 14 trust com-
panies and 44 industrial
companies are among
them.

One example of trans-
ference of profit cited in
the brief concerns the pa-
tent agreements between
Northern Electric and Wes-

tern Electric. Both com- -

panies are manufacturers
of telephone accessories.
The patent agreements sti-
pulate that Northern Elec-

tric—Bell’s supplier—pay
a sum based on sales to
Western Electric—a subsi-
diary of the American
Telephone and Telegraph
Company. Thus, the more
Bell: pays for its supplies
from Northern, the more
Canadian telephone profits
are diverted into a subsi-
diary of AT. & T.

The Bell Telephone Com-
pany of Canada and the
British Columbia telephone
company control, between
them, 80 percent of Cana-
dian telephones, leaving
20 percent for the remain-
ing 2,000 telephone com-
panies in Canada. ©

One of these 2,000—the
government-owned Sas-
katchewan Telephone Com-
pany—provides the Sas-
katchewan government
with $4 million of revenue,
compared with the Bell in
Toronto which is able to
avoid paying half a mil-
lion dollars of its tax as-
sessment. This assessment
is already lower than the
Saskatchewan revenue, de-
spite the very much larger
number of phones in
Toronto...

The brief takes issue

with the concept “that it
is the widows, orphans,

pensioners and employees
who would be suffering if
anything was done to the
Bell’s profits.”

Today only 2.6 percent
of Bell’s shares—as op-
posed to 21.7 percent in
1945—are controlled by
the American Telephone
and Telegraph Company.
But large numbers of
shares are held by insur-
ance and trust companies
which always vote with
management. Besides this,
distribution is very diverse
and it requires a very
small block of votes to
control such a company.

Figures are contained
showing Bell’s expansion
and increased profit since
the war: Since 1957, for
instance, the number of
employees at Bell has de-
clined by around 14 per-
cent, while the number of
long-distance phone calls
has increased by 38 per-
cent = 2

The distribution of the
income. dollar has been re-

versed during this period,

‘so that the employees re-

ceive only 30 percent, and
capital receives 38 percent
of income.- Profits and divi-
dend payments are at $126

this ring is for profit

Mo

1)

Z

for whom

tolls

million as opposed to $15
million in 1946. :

The brief claims it is a
myth that Bell shares are
hard to dispose of. They
have never failed to pay a
dividend in the last 84
years, and are more sought
after than many trusts and
insurance companies.

The. Communist Party
proposed that a complete
review of the Bell Tele-
phone Company be under-
taken and also that the
company be .iationalized
and made into a publicly-
owned utility. The party’s
proposals actually went be-
yond the terms of refer-
ence of the public hearing.

The Communist Party
refers -to the telephone
service as “the higher ner-
vous system” of Canadian
society and considers that
nationalization would pro-
vide.a basis for a modern,
fully-integrated communi-
cation system whose facili-
ties would be within the
reach of all.

At present, the brief
noted, only long-distance
costs, primarily applicable
to corporate interests, be-
come less, whereas private
rentals tend to become
more expensive. ;

June 11, 1965—PACIFIC TRIBUNE—Page 7