The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1900-02-21
MlCHlCAN'S LIVELY
TELEPHONE FIGHT
AN OBJECT LESSON IN GRAND
RAPIDS.
Independents Threatened with Loss
Of Field After Years Of Strife.
Pooled Their Stock to Prevent It's
Sale-Now It Is a Battle TO the
Death-How It Affects the Public.
From a Grand Rapids Dispatch to tn
Chicago Record.

N'dhu INupluS - tNt Ctuttl VI ttIt-
phone fight which promises to be to
finish. The rivals are the Michigan
company, now q part OF the Erie sys-
tenn, and the Citizens company of
Grand Rapids. With the latter are al
lied the independent telephone COM
panles of the state. and it is the
avowed Intention of the Independent
companies to either cripple the Erie
company in this state or to bring 1t to
terms.
The fight began five years ago when
the Michigan company had q monopoly
of the telephone field. With mon
opoly its rule was autocratic. with high
rates for service, service none too good
and extra charges for any fa'ors that
might be asked for. When the tele.
phone patents expired the cry went
up for a reduction In telephone rates.
The demand not only her. but In
other towns was refused with empha-
sis and In n manner to give deep Of
fense to the business interests. In this
city to resent the policy of the old
company the Citizens company was
organized, and not until the Citizens
company was ready to do business,
with plant installed and rates Just one
half of what the old company had been
charging, did the latter make the
slightest concession. When the COM
petition materialized the Michigan
company reduced rates to meet the
competition, and 1t was openly admit
ted as soon as the competition disap-
peared the old rates would be restored.
The Citizens company made up en-
.>f ,hoI
from the very beginning. 1t had no
bonded Indebtedness, and its $3O0,o00
capital was distributed among nearly
five hundred holders in amounts rang
ing from $25 upward, very few hold
Ing as high as $1,000. These stock
holders were business men and small
capitalists. some putting In their money
as an investment. more of them to
help along an enterprise which would
relieve them of the exactions of the
monopoly. This local interest was one
of the strongest elements in the sue
cess Of the new company and has con-
tributed materially to the ability of
the company to pay regular quarterly
dividends Of per cent.
OTHER CITIES ORGANIZED.
The success of the Citizens company
here encouraged other cities to organ
iZe Independent companies. MuskeSon,
Kalamazoo. Lansing, Battle Creek and
other towns established exchanges OF
their own, and as the local exchanges
were established toll lines were ex-
tended to connect ther,. An indepen-
dent company was organized in De-
troit under the special auspices OF
Governor Pingree, with n capital Of
$l.O00,oo0, and through Pngree's in
tluence the management was placed
with men known politically as "thc
Pingree push" Not in single in
stance did the Old company reduce
rates until competition actually ap-
peared.
In this city, wher the Citizens COM
pany had become established the Mich
igan company for a time laid low in
the hope that the storm would blow
over and the field again become clear.
It offered free residence phones to any
who would send in applications and
made special discounts for Office con-
nections. But with 500 stockholders
in town, these inducements were not
strong enough to win away the Cit
liens patrons. Finding these tactics
did not win, the Michigan company
began plans for an aggressive cam
paign to recanture the field. A special
telephone building was erected, the
wires We're laid in conduits instead of
strung OH poles and new ard improved
boards and Instruments We're put in.
The efforts to gain subscribers We're
redoubled and almost any kind Of a
al
kind of price. During these oper-
ations the company was saying little.
but it was steadily getting ready for
a battle.
About a month ago the independent
telephone interests of the state were
! nearly paralyzed bv the news that the
company in Detroit had been sold to
the Erie company and would be cons
solidated with the Michigan. The sale
was In several respects peculiar, with
few If any parallels in Michigan finan-
ciering. TIE Pingree management OF
the Independent company called a
meeting of the stockholders in No em-
Der for the purpose Of authorizing an
increase Of the Capitalization from 81
O0o,o0G to Sl,50o, coo. the money to be
, used for improvements and extensions
There was some opposition 70 the in
! crease. but as many OF the stnckhold-
erS sent proxies 20 the meeting irstt IA
OF attending personally, the proposi-
F, ton had substantial majority. This
, increase Of the capital, together with
| about S2O0,o0O O. ; stock that remained
| In the treasury vas turned over in a
! solid block to the Eric company, and
| This with small blocks picked up in the
! open market gave the Erie q c>ntroll-
| ing interest and enabled the consolida-
. ton plans IN 90 through The minority
! stockholders We're in state of mind
, but have since been paciiied by having
| their old stock exchanged for stock in
| the Michigan company. This transac.
! tion gave the Michigan company en-.
tire control OF the Detroit field, togeth,
! er with considerable mileage OF tol
| lines running to jackson, Lansing
| Saginaw and other Joints, and left
! the independents without entrance tC
| the city.
DETROIT DEAL WENT THROUGH
After the Detroit deal went thu cusr
| the independent companies held con-
vention in this city to devise Nays and
means to resist the aggressiols of t.,
Michigan company, and an agreement
| was signed by all the companies rep
resented not to sell under any circulI-
stances to the Michigan company with,
out advising the independents that me-
| gotiations We're IN progress ana giving
the latter a chance to buy. Hardly
had this agreement been signed whe.
| the announcement was made that IT,,
Kalamazoo company had be9l gath
eIed into the Erie fold. The Citizens
| company, of this city, endeaN orc1 /,