Middlebury register. (Middlebury, Vt.) 1886-1937, 1886-02-19
THE TELEPHONE PROFITS.
From the New York Times |

The people would shed no tears if the Bell
telephone patents should be declared null and
void. The monopoly that has been establish
ed upon these patents by the American Bell
Telephone company has few friends except
those whose friendship has been bought and
paid for. For many reasons il has become OBJ
noXous to the public. 1t demands and col
lects from the people enormous prices for the
use of telephone instruments. The company
has testified that the cost of Il set of these in
strumcnts-a transmittcr and IL rccciVer-dc.
livercd at its inspecting department is only
S342 For the usc of these two instruments il
charges to Il local company an annual rent of
Sli. The rent in this city is said to be Slj
ON March 20, lsSj, the parent company had
329, ,S26 tranSmittcrs and receivers in use, and
its receipts from rent tor the preceding year
had been Sl,919l43. by the company's own
admission the cost of these instruments was
only S56i ,00O and the value OF its telephones
for the calendar year lS4 was entered in its
statement of assets ut only S55S3l9. still up
on tins investment OF less than $500 600 it de-
manded and received from the local "ex-
changes" an annual rent of nearly S3,OOO,OO0.
Here is AN enormous annual profit of $50 per
cent, which the Bell company eXacts from the
local exchanges. These exchanges must take
another profit from the subscriber. Let us
see how much this profit is. About one year
ago person thoroughly familiar with the
telephone business estimated the cost of wire,
instruments, exchange plant, etc, for an eN-
change of 1000 subscribers in this city at
S}A 900 Il year and the expenses for salaries,
repairs etc, at s79,2O0 year. ON the other
hand, tue receipts for the year from 1900 sub
scribcrs, at an average annual payment OF
Sl7j, would be S700OOO, that in one year the
entire plant would be paid for, the running
expenses met and II surplus of s25G,sOO laid
aside for stockholders. These figures may in
dictate the size OF the profit taken by the To-
cal exchange from the subscriber
| What percentage of the capital paid in cash
the dividends issued by the Bell company rep
resent ii is difficult to ascertain. An official
/ statement presented to the Massachusetts
| legislature when the company was asking for
permission to initiate its capital from SlOO00,-
900 to s3O,OOO,00O shows that only $4,000 was
paid into the treasures of the three compa-
nies that preceded the Bell company and
were merged into it After s96O3, 400 in stock
had been issued the company stated that 3d.
lO2, 900 had been paid in cashan that sG,5OOO 600
/ had been paid in stock to the National company
for property valued by that company at only
/ sS5O,O00 The Boston GloJe and other papers
have declared that the stock has been watered
seven times or by giving to holders for each
original share seven new ones, So that the
value of the shares, which was nj one time We.
ry great, has been diluted until the profits do
not appear To exceed II per cent. But if it be
true that the total amount of cash Invested
did not exceed sl,OOO,OOO, the size of the divi-
dend will appear, for the net earnings of the
company in the year ending March |, lsSj,
were sl,fl0,s92, to say nothing OF dividends
from stock in local companies to the face val