The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1896-05-27
TELEPHONE ENTERPRISES
NEW ONES GESERAllY FAILURES
Lack of Technical Kno VILE dge and
Experience Lends to Disaster.
How the scheme Is worked.

Several ways have been discovered al
making and losing money by telephones
since the expiration of the Fundamental
telephone patents. One way is to start
a large and imposing concern, with nomi-
nal capital enough to run thu. United
States, acquire a few obscure detail pa-,
tents relating to telephone devices, and
then sell stock and State rights to
credulous investors, who believe that
history repeats itself. Another is to start
a local company and actually put in a
plant bought from one of the various
telephone construction companies that
have blossomed forth from electric bell
makers establishments during the last
year or two. Still another is to organize
one of these construction companies and
trade on the inexperience and lack of
technical knowledge of the managers of
new telephone companies by supplying
them with telephones and material of the
quality and design Of the year 1880.
The method Of starting a local tele-
phone company is very simple. A few
men get together and organize, say, the
Blue Valley Telephone Company, max
ing themselves president, general man
ayr, secretary, and so on. The business
OF their lifetime may have been law,
medicine, groceries. or livery stables,
but theneeforth they are telephone men,
- eLAe ~
tricacies of telephony are as naught.
With the few thousand dollars that they
and their friends have got together, they
purchase a telephone plant from one of
the various mushroom construction COM
panies that nave appeared in anticipa-
ton OF just such customers. BY dint of
appealing to popular sentiment against
m~onopolies and to the love of ~cheapness,
and by carefully ab~staining from asking
anything in the nature of a signed con-
tract, they secure a number of Sub
scribers'-that is, persons willing to al
low them to put telephones in their
houses and to make a verbal agreement
to pay $1.50 or 81 a month for the SER
vice when it is supplied.
The wires and cables are strung, the
are put in place Generally
by inefficient linemen unable to keep a
regular job. the central is fitted up,
and then the trouble begin. The wires
won't work, the switchboard won't
switch. the telephones won't talk, and
the subscribers. of course. won't pay.
The worthy president and general man
ager, who know as much about the in
Iernais OF telephone apparatus as they
DO or those OF an aneroid barometer, are
helpless, and the only thing they can
do is to send for an expert of the con-
~struction company that has already vic
timized them. who proceeds to suggest
alterations. and additions involving more
outlay.
his is the history of several small
distant from New York, and of many in
Western States-which so far lave suf-
fered more aeutely than the more on
servative. part of the country from the
craze for new telephone companies.
1t is questionable in any case whether
there is an easy road to fortune along
the paths of opposition. telephone enter
prise. There may be money in it for
a few sagacious promoters, but investors
may well be on their guard. And even
when legitimate business is intended
and attempted there seems little chance
of success unless due regard is ha for
at least common business principles.
Rates which obviously cannot pay work
ing expense preclude any idea of profit,
and without definite contracts with SUBJ
scribers the certainty of any revenue at
all is nil.
The telephone business, like any other.
requires to be learned. A knowledge of
it cannot. as some seem to imagine it
can, be received as an inspiration from
heaven. Those who, without. technical
experience or training, embark in tele-
phone enterprises today are simply set
ting out from the point that the estab-
lished concerns started from when the
telephone was a novelty. Their money,
or the money Entrusted to them, will be
sunk in trials and experiments and in
acquiring the experience and knowledge
of the business which, so far, remain
the monopoly of the old companies.