The Columbian. [volume] (Bloomsburg, Pa.) 1866-1910, 1905-04-06
Telephone IN THE FUTURE
Proper Development Will Re-
quire 100000 Instruments.
TOO BIG FOR MONOPOLY
Mr.. vinton A. Sears Calls II Probably
the Most Profitable Of All Public
Utilities--lndependents Thrive on
Opposition and Continue Steadily
Forcing the Rate Lower.

ODpCSltiOn dUO SOUtlnuc StCduiIy
Forcing the Rate Lower.
vinton A. Sears, Of Boston, has
studied and written much on the sub
iect of telephone development, of
which he is a recognized authority.
The present development of the
telephone is in round numbers 3,400,-
600 complete telephones, each tele-
phone comprising a transmitter and
. receiver, but reckoned as two instru-
ments by the Bell, ana as one by the
independent companies, of this num-
ber the Independent companies now
have 1900, 900 telephones, and the
whole Bell system 100000; a part Of
this is duplicate service and less than
per cent of the population have yet
become telephone subscribers.
The reasonably complete develop
ment in the United States will require
over 100000 telephones; this is bas-
Cd upon ten per cent of the popula-
don becoming subscribers which basis
Ia already considered too low for
the future by many of the lead
ing Bell and Independent en-
gineers. This ten per cent
development which has been exceeded
and even doubled in some favored To-
ealities, will render a service to and
broaden the life of the country as
whole to such an extent that the cost
a installation and maintenance can
~ oil hxy- 1s,~ h,,t
as a labor and time saving convent
snce of economic value.
The Bell concern has a magnificent
organization containing many men Of
the highest character and ability.
The Bell interests also have many
men trained up under the enervating
and dwarfing influences Of the mon
opoly period. But with all the bust
ness ability of the Bell management.
they have not been able to hold the
Aeld against the independents, who
have been able to finance and build
more exchanges and install more pay
ing telephones during the last eight
years than the Bell companies have
in their entire existence. In the face
Of This showing on the part of the in
dependents, which is really the show
ing of the American public, for the
Independent movement is largely
popular and cooperative movement,
it is not within the bounds of reason
to suppose that the Bell interests
can stamp out this competition, which
thus far seems to thrive on opposition,
No doubt it would be we'll for the
Bell interests to pursue policy of a
fair division of the field which it can
never hope itself to fully develop and
hold against the independent move
ment. The only way by which the
art can be perfected and the public
given the best telephone service at
the most reasonable cost is by compe
tition. Competition has already re-
iuced the rates one-third to one-half
and has greatly extended the local
and long distance service of the whole
country
To reasonably develop the field will
ceqrire the installation of 100000 to
100000 additional telephones.
Looking at the financial side of the
industry we find that the capitaliza-
tion of the Bell licensee companies is
approximately S40O,OO0,OO0, which rep
resents 100000 subscribers stations
,r capitalization of $3.50 a subscrib-
,r (not including long distance lines
Or the 100000 of outstanding
stocks, bonds and notes of the parent
Bell company, an amount equal to
$3.50 a subscriber.) The cost of g.
100000 additional telephone stations,
II installed by Bell companies and
capitalized at the above average of
$3.50 a subscriber, would require the
issue and sale of 81, ,250,000,000 of new
securities-stupendous figures even in
This era of high finance. One-half of
his new capital, according to custom
would be taken by the American Tele-
phone and Telegraph Company, which
IN turn would increase its own capital
obligations by $625, 100000.
Should the Bell company continue
to raise new capital as fast only as in
the last few years and use all for new
construction (and none for fighting
ccmpetition) it would take about fifty
years for it alone to supply the tele-
phone service that the public will
want tomorrow.
On the other hand, the Independent
telephone companies, of which there
already are over four thousand, serv-
ing 100000 subscribers, have an in
vested capital of about $250,000, 900,
or an average of about $40 a sub
scIlber. Should the Independent COM
panies furnish the American public
with the 5000 900 additional telephone
stations S700,000,O00 would be needed.
or $550000,000 less than the estimated
Bell requirements-a sum too large
to lose sight of in the cost of a public
utility that is a necessity in business
and domestic life
The large aggregate amount Of new
capital required for the proper devel-
opment of the telephone can be f.
nanced among some five thousand in
dependent companies in the United
States at an average of 800, 900 each.