The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1902-11-26
Sold Mt 90 Cents on the Dollar After
Organization of the Company and
Is Now Held at So.
GROWTH OF THE BUSINESS
STEADY INCREASE IN SUBSCRIBERS
AND AMOUNT OF INCOME.
Large Sum Spent i'm installation of
System and i'm improvements
Terms of Franchise.

Four years ago New Telephone Company
stock passed through a local brokers' hands
at 80 cents. AT the Stock Exchange 1t is
bid at So and offered at IS. These figures
in a measure tell the story of the increas-
ing value Of this line of securities.
The New Telephone Company was incor-
porated Jan. is, 1895. 1t secured a fran
chise from the city. after a severe contest,
and its franchise is one of the most rigidly
drawn in the country. For an Infant in
dustry" it was asked to size up from the
start with most of the corporations that
had been begun under the most liberal and
encouraging conditions. The franchise was
drawn with a full purpose to make 1t a
business OF permanency and eXcluSiveneSS
and to equip a new public servant with a
contract that left no apparent opportunity
to escape the conditions by any pernicious
consolidation. One of the franchise condi-
tons was the fixing of maximum rates-$42
a year for business I'M $24 a year for do
nestle service. Perhaps these conditions
were in mind when the stock sold at 80
cents.
Nov. / the New Telephone paid it's first
dividend on its common stock. This was
the first of quarterly dividends of 15 cents
each: which means that the company is to
pay 6 per cent. on this stock annually.
In four years the New Telephone plant
has been undergoing development which
accounts for its failure to pay dividends
49, . ~
cording to its financiers. complete for all
purposes for years. 1t comprises a central
station, from which it supplies the middle
portion Of the city, q northern station and
a southern station. Its capacity is minim-
lied at ten thousand services, which is re-
garded as ample for the next five years, at
least; Its system is exclusively individual,
ana Its lines are all copper and its instru-
ments uniform for long-distance service.
Its betterments include an ample distri-
button of cables in underground .conduits
OUTSIDE the district specified In the fran
chise-the mile square," These better
ments are in anticipation of future require
mentS, and are in the interest of economy.
Altogether, the company regards its pres
patrons, the increased patronage being re-
garded as a test of this. A rough
estimate Of the tangible assets of the New
Telephone Company fixes them at one mil
lion and a quarter dollars.
The company is capitalized at s400. 600
without preference. 1t was originally bond
ed az sooo,0v, lives. Later there was a con-
solidated issue Of $SO0,O00 fves, which in
creased the bonded debt to that figure, as
100000 OF the $4,000 first mortgage con-
solidated is held irrevocably to retire the
first mortgage on all the property of
the company, which, as has been stated, is
f1ves are bid at 80 ard offered at s41h. The
first conspls are bio at So and offered at S4.
The first price applies to fiv~e-eighths of the
tofai Issue and the last to three-eighths;
comparison of the progress of the income
and the growth of the business of the New
coz pany. The basis for the computation
of net earnings is not available, nor is the
amount of fixed charges, but the better
ments of the company, it's assets and its
history. together with the unofficial state
n,ent that its cost of operation and fixed
charges will not exceed s125, 600 annually,
leads its friends to believe that its ability
to earn 6 per cent. is more than probable.
The table of gross receipts for the past six
months Is enlightening so far as it goes.
1t is: