The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1886-02-08
THE TELEPHONE MONOPOLY.
How Men Have Made Colossal Fortunes
on Stock Seven Times Watered.
A Fairy Tale of Modern Finance-Five Divi-
bends Paid in One Year-Enormous
Profits of the Bell Company.
New York World

New York World.
The recent articles in the World concerning
the Pan-electric Telephone Company, which
seems TO have obtained such wide ramfcations
among the statesmen at Washington, has direct
cd public attention to telephone matters in gen.
erai, and especially to that giant monopoly, the
American Bell Telephone Company Never in
the history of America nor in the history of any
other country, has corporation grown to such
dimensions in so short time as the American
Bell Telephone Company. Never before has an
inventor so Immediately grown enormously rich
from the proceeds of an invention as Prof. Alex
ander Graham Bell. Morse took out his first
patent On his electric telegraph in 1910, but it
was four years before the first message was
passed over the first line ever laid, which was
between Baltimore and Washington and it has
taken the Western Union Telegraph Company
and the Baltimore g. Ohio Telegraph Company
all these intervening years to grow up into their
present great proportions. Morse himself was
but indifferently rewarded. and probably died
without having a conception of the extent to
which his invention would be employed and the
importance Of it as commercial and financial
factor of the age Robert Fulton never dreamed
OF how steamships would cover the sea, and
Stephenson could not have foreseen the number
and extent of the railway tracks that now
the earth with steel network We are amazed,
it is true, at the sudden and gigantic growth of
the railroads, the steamships. the cables and the
telegraph lines, but none of them came to much
under quarter of a century.
The general public never heard of such thing
the transmission of Snaaci, virac fili ton
years ago True some experiments had been
made. Bourseue in France and Refs in Ger
many had worked on the idea some years before.
but nothing of practical character came from
their efforts, and the world went on in ignorance
of their labors. Bells application for patent
was received at the Patent Office, in Washing
ton, Feb. IA, 1876. and it is a remarkable fact,
which adds to the romantic interest to say moth
ing OF the legal phases of the story, that an ap-
pcation for patent on speaking telephone
was received from Prof. Elisha Gray of Chi
cago the same day but little later. The pat
ent was granted to Bell, on the ground of the
difference in time, and not because of any differ
ence in the merit of the claims. Thus, by what
would ordinarily be considered trifing incjdeut,
was the Bell Telephone Company given at
least temporary footing of which it has not
failed TO take advantage making Bell very
rich man. and leaving Gray to nurse ali bis life,
perhaps, the regret that he had not been prcked
up to one days greater haste i'll sending away
his application.
Bell took his telephone to the Centennial Expo
sltlon, where it was seen and experimental with
by thousands of visitors, who never expected
that 1t would come to more than an ingenious
playthng. 1t was two years after the Centen-
NAL that the first telephone exchanges under the
Bell patent were established though company
had been organized in 1877. 1t was not till 1879
that the new method of communication was
firmly established a commercial and social ne
cessity, and from that year dates the marvellous
growth and success of the Bell company. It's
o1ctr nv,& hn CT .1ou
$24, 000, 600, and an application was made last
year to the Massachusetts Legislature for in
crease to $50 600. 900, which is half the amount
of thJ entire capital stock of the Western Union
Feieg{aph Company. The receipts for rentals for
the fiscal year ending March l. 1885, were 81 500
coo, and the net earnings for the company for the
same time We're 81. 10, 0G0. The first dividend
was not declared till Jan. l. 1881, when 1920 500
was paid to stockholders on - 500 shares, or 3
per cent One more dividend of the same
amount was declared that year. three dividends
of that amount were declared in 1882 two divi-
bends of the same amount were paid in 1883,
and two of 1888 063 the year: five dividends
of $28S, O63 each were paid in 1884, and one Of
the same amount was paid Jan. Is. 1885. and
several have been paid since. Up to the 18th of
January, 1888, the total dividends paid to stock
holders amounted to about 81. 600, 900. The
original investors in Bell telephone stock paid
from $40 to $40 per share. Since then the stock
has been increased or "watereG" seven times
and the shares are worth $3.50 each. so that an
CFtSlUdl uOIG6r mas now elSlC SIlafeS Tor every
that he first held, and what he paid say $50
for is now worth 81, 200.
On the LIST of January 1885, the Bell company
controlled in the United States and Territories
772 exchanges, O7,440 circuits, l01, 734 miles of
wire. gave service to 5J68 employees and had
134, 900 subscribers. It's payroll last year aver
aged about $4,000 month, or about $3.50, 900
year. The employees nearly all girls who re- i
ceive very small salaries The expenses are
very light, the original cost of property small
and ha IpPO polxy of kto
modern school it has no rival and what it will |
attain to another ten years, unless checked in
its progress, would undertake to foretel
The character of its property, when it comes to
valuation in dollars and cents is very well IL
Illustrated by the insignificant amount it has paid
to the various States for taxes Up to the be-
ginning of 1885 its total outlay for taxes in the
United States had reached only $4,000. The
amount paid for taxes in New York for 1884, was
1924. Sc. The amount paid in Missouri the same
year was $54. rs. In Massachusetts, where the
capital stock is taxed. the amount paid in 1884,
was $24, 40 The amount paid in all the United |
States outside of Massachusetts since 1881 UP to |
the beginning of 1885 was less than $25 000 A
company that has a combined salary and tax ex- |
pense OF about $3.50. 900 year, with an income
of 81 00O.O 900 year. is fine illustration of the
modern scheme of money making.
A number Of men have grown very rich
through small Investments in Bell telephone stock
five or six years ago. Professor Bell who makes
his home in Washington, is supposed to be worth
$4.00O.000. He was originally Massachusetts
man, and when he applied for his first patent
was teacher of languages in school for deaf
and dumb 1t was through his Boston acquaint-
anceship that the first company was organized
W. FL. Forbes, of Boston. is the president He is
said TO be worth from Sc, 000 900 to 49, 000 900.
which comfortable sum has accumulated on an
original investment of $64, OO0 Other Massachu-
setts men who have made fortunes the same way
are Gardner G. Hubbard of Boston. said to be
worth S.. 00O, 900. G. P. Bowditch, of Boston, aud
ice-president of the company, is said to be worth
fully as much. Theodore Fl. Vail is the man
ager of the company and is a millionaire two or
three times over. Elk Congressman w. W.
Grape, of Massachusetts, is another who has
grown rich on an original small investment The