Okolona messenger. (Okolona, Miss.) 1900-current, 1906-07-18
Important Failure
in Telephone
Competition
Indianapolis Independent
Company Fools Stockhold
ers by Paying Out $500
900 in Dividends when
$4,000 Should have
been put aside to CO.
yer wear and tear.
of flant.
Promoters Make Mo-
ey While People
The Concern Seeks to Recoup Its
Losses by Raising Rates and
Subscribers Protest Against
Such an Imposition.

Company of Indianapolis, Ind,
to make both ends meet, another
important addition to the long list
of independent telephone fascos
has become obvious.
This Indianapolis failure is full
of sinister features. Nearly 10,
600 telephone users OF the HoOsier
capital will be called upon to pay
Increased rates for service; more
than 5000 users who have patient
ly endured the additional expense
of twol telephones for six or seven
years in the hope that cOmpeti
tion would eventually force down
the rates so that two telephones
would cost no more than one will
be bitterly disappointed; scores OF
men and women who have invest
ed their savings in the indepen.
dent company have been brought
to a realization that what the
munipulators have been represent
ing to them as a profitable bust
ness has actually been losing
proposition; the city government
of Indianapolis ascertains that it
granted a franchise with conditions
impossible Of fullfilment.
The only benefits derived from
the whole proceeding have gone to
the promoters and munipuiators,
who have cleverly unloaded upon
the people of Indianapolis hun
dreds of thousands of dollars OF
telephone bonds and stocks at
prices much in excess OF their real
value. And now, one of the orig.
inal promoters, in conjunction
with other outside parties in ask
ing the city government of in
dianapolis to regild the brick SO
that it may be manipulated once
more.
The Indianapolis telephone
story really is one of "frenzied
fnance;" to which the redoubtable
Mr.. Lawson, of Boston, might do
credit in the telling. The COM
pany involved is q wheel within
a wheel, or in other words, two
companies, the second of which
was organized solely for the "con-
venience" OF the promoters and
manipulators.
The New Telephone Company
built its plant ar d started to 0per-
ate it in 1899. At the outset the
company had an authorized CAPT.
tai stock Of $3.50, 900, bond issue
Of $500, 900 and in 1900 the bond
issue was increased to $500, 900.
In 1904 the company announced
that it needed more capital, Osten-
sibly for the extension Of it's plant,
but the franchise prohibited an in
crease in the capital stock. 1t
was then that the munipulators or.
ganized the Indianapolis Tele-
phone Company for the purpose
of leasing and operating the plant
and increasing the capitalization
of the business. Permission for
the leasing of the plant and the
capitalization Of the Indianapolis
Telephone Company at 81, 200, 900
was granted by the city govern
ment through resolution of the
board of public works approved
by the city council. At the start
the Indianapolis Telephone Com
pany had common stock issue of
100000, but it now appears with
500, 900 preferred stock in addi.
ton. By the terms of the lease,
which was for a period OF 10 years,
the Indianapolis Telephone Com.
pany guaranteed the payment Of |
the principal and interest OF the
100000 bond issue OF the New |
Telephone Company, and also the
payment Of 6 per cent dividends
on the stock Of the underlying con-
Germ. About year ago another
mortgage to secure $3.50, 600 OF
bonds was plastered over the
property, but we understand that
only about 100000 OF these last |
bonds have been disposed Of.
In an interview Jan. 10th, 1906.
Attorney Swift, Of the Indianapo-
lis Telephone Company, said: "If
all the money that the New Tele.
phone Company and the IndiRnap-
oils Telephone Company have
paid out for interest on bonds and
stock dividends since the starting |
Of the business had been reserved
for depreciation, the company
would MOI now have the amount
that it now finds necs6uary TO
charge Of for depreciation