The cost of telephone service varies as the amount of use. It is just, therefore, that the selling price should vary as the amount of use.

Rates. There are two general methods of charging for telephone service and of naming rates for this charge. These are called flat rates and measured-service rates. The latter are also known as message rates, because the message or conversation is the unit. Flat rates are those which are also known as rentals. The service furnished under flat rates is also known as unlimited service, for the reason that under it a patron pays the same amount each month and is entitled to hold as many conversations—send as many messages and make as many calls—as he wishes, without any additional payment. In the measured-service plan, the amount of payment in a month varies in some way with the amount of use, depending on the plan adopted. The patron may pay a fixed base amount per month, entitling him to have equipment for telephone service and to receive messages, but being required to pay, in addition to this base amount, a sum which is determined by the number of messages which he sends. Or he may pay a base amount per month and be entitled to have the equipment, to receive calls, and to send a certain number of messages, paying specifically in addition only for messages exceeding that certain number.

Whether flat rates or measured-service rates are practiced, the general tendency is to establish lower rates for service in homes than in business places. This is another recognition of the justice of graduating the rates in accordance with the amount of use.

Units of Charging. While both the flat-rate and the measured-rate methods of charging for unlimited and measured service are practiced in local exchanges, long-distance service universally is sold at message rates. The unit of message rates in long-distance service is time. The charge for a message between two points joined by long-distance lines usually is a certain sum for a conversation three minutes long plus a certain sum for each additional minute or fraction of a minute. In local service, the message-rate time charge per message takes less account of the time unit. The conversation is almost universally the unit in exchanges. Some managements restrict messages of multi-party lines to five minutes per conversation, because of the desire to avoid withholding the line from other parties upon it for too long periods. Service sold at public stations similarly is restricted as to time, even though the message be local to the exchange. Three to five minutes local conversation is sold generally for five cents in the United States. The time of the average local message, counting actual conversation time only, is one hundred seconds.

Toll Service. Long Haul. In long-distance service, there are two general methods of handling traffic, as to the relations between the calling and the called stations. For the greater distances, as between cities not closely related because not belonging to one general community, the calling patron calls a particular person and pays nothing unless he holds conversation with that person. In this method, the operator records the name of the person called for; the name, telephone number, or both, of the person calling; the names of the towns where the message originated and ended; the date, the time conversation began, and the length of time it lasted.

Short Haul. Where towns are closely related in commercial and social ways and where the traffic is large and approaches local service in character, and yet where conversations between them are charged at different rates than are local calls within them, a more rapid system of toll charging than that just described is of advantage. In these conditions, patrons are not sold a service which allows a particular party to be named and found, nor is the identity of the calling person required. The operator needs to know merely of these calls that they originate at a certain telephone and are for a certain other. The facts she must record are fewer and her work is simpler. Therefore, the cost of such switching is less than for true long-distance calls and it can be learned by careful auditing just when traffic between points becomes great enough to warrant switching them in this way. Such switching, for example, exists between New York and Brooklyn, between Chicago and suburbs around it which have names of their own but really are part of the community of Chicago, and between San Francisco and other cities which cluster around San Francisco Bay.

Calls of the "long-haul" class are known as "particular person" or "particular party" calls, while "short-haul" calls are known as "two-number" long-distance calls. It is customary to handle particular party calls on long-distance switchboards and to handle two-number calls in manual systems on subscribers' switchboards exactly like local calls, except that the two-number calls are ticketed. It is customary in automatic systems to handle two-number calls by means of the regular automatic equipment plus ticketing by a suburban or two-number operator.

Timing Toll Connections. It formerly was customary to measure the time of long-distance conversations by noting on the ticket the time of its beginning and the time of its ending, the operator reading the time from a clock. For human and physical reasons, such timing seems not to be considered infallible by the patron who pays the charge, and in cases of dispute concerning overtime charges so timed, telephone companies find it wisest to make concessions. The physical cause of error in reading time from a clock is that of parallax; that is, the error which arises from the fact that the minute hand of a clock is some distance from the surface of the dial so that one can "look under it." On an ordinary clock having a large face and its minute hand pointing upward or downward, five people standing in a row could read five different times from it at the same instant. The middle person might see the minute hand pointing at 6, indicating the time to be half-past something; whereas, person No. 1 and person No. 5 in the row might read the time respectively 29 and 31 minutes past something. Operators far to the right or to the left of a clock will get different readings, and an operator below a clock will get different kinds of readings at different times and correct readings at few times.

Timing Machines:—Machines which record time directly on long-distance tickets are of value and machines which automatically compute the time elapsing during a conversation are of much greater value. The calculagraph is a machine of the latter class. The use of some such machine uniformly reduces controversy as to time which really elapsed. Parallax errors are avoided. The record possesses a dignity which carries conviction.