The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1886-04-14
AN INSIDE VIEW OF THE TELEPHONE

BUSINESS.
The little light thrown on the telephone
business, as to the cost OF operating ex-
changes, nearly always comes from managers
of companies, and whenever legislative COM
mittees or subscribers ask for lower rates,
they are promptly met with prepared state
ment showing actual loss at any given point.
The letter, which is now in our possession,
a copy of which we give herewith. shows the
other side of the balance sheet. 1t is from a
gentleman, who is now an official and a men,
Der of the Executive Committee of the
Central Union, and shows little glimpse
ness. Net earning of 81 per cent to receipts
is certainly good business. and stock at
premium of 325 does not look at all besrish.
The rates charged in Detroit are about the
same as in indianapolis.
CHICAGO, June 20, 1883.
DEAR SRI notice that your syndicate is buy
ing considerable Western telephone property.
and think, providing you desire to do so. can
range negotiation whereby you will come into
possession of the largest and best piece OF tele
phone property in the United States. | refer to
the State of Michigan.
l and my friends own the entire capital stock Of
the Michigan Bell Telephone Company. which
controls all of the extra territorial business in
that State and all but about 81 per cent. OF the
capital stock OF the Telephone and Telegraph Con-
Our stock is a.. pooled and held by five Trustees.
The capital stock of these companies has never
as you VIII observe, is very low and the earnings
The Telephone and Telegram Construction Com
paDy is now earning between $4,000 and 5000
per quarter, and the Michigan Bell is doing
business OF about g 900 per month at the present
time, with net earnings OF iper cent. to receipts.
As we have about 900 miles of lines now under
shis w Se xey ssey
by the end oil July we will be doing 5000 per
month on these lines.
As it is entirely outside of our other properties
and only few of us interested in il, | am under
the impression that can bring about sale to
your syndicate on basis OF ss25 for the stock OF
peny which we hold. and S275 for the stock of the
Michigan Bell company. The par value OF these
Michigan stocks is 81. hence figure them at
ssl-25 and s6S75 in making the estimated cost of
the purchase;
Capital Telephone and Telegraph Con
struction SjOODD5 %
Capital Michigan Bell Telephone Com
pan cu0JJ ~
Western Union holds 7.4SO shares OF Telephone
and Telegraph Construction Company.
Syndicate holds 1850 shares of Teie-
phone and Telegraph Construction
Company, at $ol. OIL ,Jl2 80
Syndicate holds 10 900 shsyes Michigan
Bell, at SOS .... 80. $3.50 90
Sl7Os,sl2 30
1 desire you to consider this an entirely per
sonal matter, as have not mentioned ii TO any
of our people; but ii you are disposed to negO-
tate and will give me authority TO go ahead on
this basis, think can put it through for you:
The Telephone and Telegraph Construction
Company now has forty exchanges in operation,
with 5616 subscribers, and increasing at the rate
of 200 per month. 1t has contract for the life OF
the patent, with so per cent. discount. aud the
Bell Company has no participation whatever in
its stock. II has all been built by practical tee-
phone men, and undoubtedly has the best con
tract and the best property in the United States.
The Michigan Bell Co. has contract which has
about eight years yet to run, and only has to pay
the American Bell 10 per cent. commission on
extra territorial business with the usual discount
on telephones.
The Telephone and Telegraph Co. also owns the
American District Co., of Detroit. and has writ
ten contract with the Western Union in regard
to delivering messages and handling the gold and
stock business, for which ii receives between
5000 and 81 900 per year.
The Michigan Bell Co. now has 800 miles OF
line in operation and we have put in the two
compa les Sl50,O00 cash within the last two
months. which Will be earning profit within
sixty days. Yours truly,