present needs, but usually for growth as well. A liood example of 

 this type of arrangement is a jointly occupied building which is de- 

 signed to meet the present and expected future requirements of both 

 companies and in which certain designated space is reserved for the 

 lessee company. 



The spare plant basis applies to plant which, in general, the owning 

 company has provided for its own use in anticipation of its own future 

 requirements, or to plant which is spare because of fluctuating load 

 demands and can be temporarily placed at the disposal of the renting 

 company. Such plant may be released by the lessee at any time or 

 may be taken back by the lessor company at any time upon reasonable 

 notice to the other company. 



Illustrations of both these bases of rental where the American 

 Telephone and Telegraph Company and an Associate Company are 

 involved are given below. 



(a) Buildings 



In providing building space, it is the general practice for one company to 

 own the building used jointly by both companies. This arrangement is 

 advantageous, particular!}' in the larger cities, since it permits one com- 

 pany to deal with taxing authorities, zoning commissions, public works 

 authorities, and the public generally. Where space for a local central 

 office is required, it is the general practice for the Associate Company to 

 own the building. The American Telephone Companx's ownership in 

 buildings is accordingly largely confined to intermediate repeater stations. 

 The owning company generally furnishes space to the other conipan\' on 

 a reserved plant basis. 



(&) Equipment 



In the case of toll equipment, one of several arrangements is followed, de- 

 pending in part upon local conditions, such as local operating or main- 

 tenance conditions, and in part upon the relative amount of equipment 

 required by the two companies involved. In some cases where one com- 

 pany requires a relatively large part of the total equipment used, that 

 company owns all equipment and furnishes equipment for the other 

 company's needs on a reserved rental basis. Thus, on some of the long 

 through routes where the American Telephone and Telegraph Company 

 uses the majority of the equipment in the intermediate repeater stations, 

 it owns all equipment and rents such portion as required to meet the 

 other company's needs on a reserved rental basis. In many other cases 

 where both the American Telephone and Telegraph Company and the 

 Associate Company have considerable toll equipment requirements and 

 these can best be provided in joint installation, each company will own 

 the ecjuipment provided for its use. If there is any sudden peak in the 

 equipment requirements of one company, the other company will usualK' 

 temporarily furnish spare equipment from its own reservation on a rental 

 basis to aid in meeting the peak demands. 



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