nXGlXF.F.Rl.W; COST swniF.s 3 



in the ticld is ih.kU- !>>• the proptT niVici.ils of tlu- asxxi.itcd opcr.itiii^; 

 i-onipanics. 



If a pitve of apparatus or o(|uipnient, correctly clesiRtitxl within 

 itself, is installinl in tlu- wrong place, or if a wrong size is selcclcil, 

 loss will result. 



Questions of where to place plant and what size to employ, ;i4k1 

 when to replace existing plant constantly confront the ofK'rating 

 engineers in the field. In the telephone business ever%- major con- 

 struction project is described in what we term an "estimate" which 

 is nothing more or less than a detailed design for the project, cm- 

 luxlied in drawings and specifications, accompanied by a carefully 

 preparetl estimate of its cost. These estimates originate in the Plant 

 Departments of the Associated Companies and are really the bids 

 of the construction forces for performing the work. These estimates 

 pass through the hands of the Chief Engineer of the Associatcxl 

 Company for his scrutiny and approval before they proceed to the 

 higher officials of that company for final authorization. The Chief 

 Engineer considers these estimates in their relation to the general 

 plans of the Company with reference to the growth of the business 

 and the plant. F"or many years the chief of the Department of which 

 I am a member, \'ice President General John J. Carty, occupied the 

 post of Chief Engineer of the New York Telephone Company, the 

 largest associated company of the Bell System. I have heard him 

 say that when, while occupying that position, an estimate for some 

 six-cific piece of work came before him for re%'iew, he asked himself 

 three questions regarding it: 



1. Why do it at all? 



2. Why do it now? 



3. Why do it this way? 



Rigorous proof sufficient to answer these three questions will 

 justify the endorsement of any engineering project, and, furthermore, 

 each question generally involves an engineering cost study. 



Fl.ND.\.MKNT.\L Pl.WS 



Of all the engineering cost studies that are made in connection 

 with the telephone industry, none is more far-reaching in its effect 

 than those involvetl in what we term our "fundamental plans." In 

 firder to give a fair idea of the importance of the work done under 

 our fundamental plans, it will be necessary to describe briefh- what 

 a fundamental plan is. 



