Los Angeles herald., 1907-01-03
VAST TELEPHONE
SYSTEM FORMS
SUNSET AND PACIFIC STATES
ARE NOW ONE
Great Improvements and Extension Of
Business Planned by the "Paelfc
Telephone and Telegraph
Company"

Company"
The close Of the year is identified
with a transaction OF Importance
which Is of particular concern to the
| business and financial interests of the
Pacific Coast. The Sunset Telephone
and Telegraph company and the Pa
cflc States Telephone and Telegraph
company. with their millions of invest
| ed capital and thousands of subscribers
in Idaho, Washington, oregon, Nevada,
California and Arizona have been abb
sorbed and their property taken over
| by great corporation-the Pacihc
Telephone and Telegraph company.
| The new corporation has purchased
! the property of the Pacific States COM
| pany in California, and has taken,
under long leases, practically all the
| lines and equipment Of the Sunset
company and those of the Pacific
States company outside of California.
The capital of the new corporation
has beeh fixed at $5O,OOO,000, of which
| 1892, 100000 is preferred and $1S,000,00O
common stock. 1t is the intention of
the company to issue as required $685.
| 900 of five per cent bonds, the lro-
ceeds of the sale of which are to be
devoted entirely to Improvements and
extensions of the company's service.
This vast sum will no doubt be
available almost Immediately by rea-
son of the character of the properties
pledged for the payment of these OBJ
| legations, as the standing of the direct
crate assures the most efficient man
agement, and especially as the recent
disaster in San Francisco, involving
such tremendous losses, has so en-
phatically brought home to investors
the wisdom of diversified assets as a
basis OF mortgage security. The ar
rangement has been perfected with the
cooperation of the shareholders of the
old companies, having in view the
economic advantages and efficiency of
management possible under operation
by one company.
Policy of the Company
1t is learned that it will be the policy
of the American Telephone and Tele-
graph company, which, it is under
stood, holds the controlling interest in
the new coast company, to continue
with renewed vigor the policy of i'm
provement initiated prior to the San
Francisco disaster of last April, and
that such plans will be carried to COM
plete execution requires no further
guaranty than this determination of
| the parent company. In that city alone
| DIT tllc llilS W lllC lllS bliO company
was proceeding under improvement
estimates aggregating $1,926,000. In
| the main office the installation of the
| largest multiple switchboard in the
world A.. been practically completed
under the direction of a large corps of
experts from the east. In three days
an exchange Of $4,000 subscribers, with
| it's costly and intricate appliances, was
practically swept from existence, in
| 1rnl1yino tho la horizons and aYnpnGiVp o.
connection of 10000 miles of under
ground wires. Before the embers were
cool, orders, duplicating this vast
| equipment, were on the files Of eastern
manufacturers, and although the gen.
eral prosperity of the nation was be-
| ing reflected in an unprecedented de-
mand for telephone apparatus from all
sections of the country, orders from
| this coast have, without exception,
been given the preference, resulting in
| deliveries within four instead of twelve
months, the time heretofore eXacted by
manufacturers between order and de-
| livery. Probably no business enter
prise met with greater loss in the dis
aster than the telephone company,
| both in the destruction of its physical
property and reduction of income. 1t
has also suffered from the general
handicap resultant upon the scarcity
of labor and material but it's success
| in overcoming difficulties and its prog
ress in the way of rehabilitation work
have been matters of general commen-
dation.
Many improvements Planned
The same policy of improvement is
| to be adopted throughout the entire
| system of the company with its 1900
exchanges, 100000 telephones and 10000
miles of toll wire. Under the direction
kof an added force of construction and
electrical engineers now on the ground,
orders have been given and prepara-
tion made for the permanent installa-
tion of multiple switchboards of the
| latest type, assuring a service second
| to none in the world. For some time
| the old companies have been acquiring
| sites for their exchanges in the various
cities and towns of the coast and have
aimed to improve such properties with
structures combining utility and at
tractiveness. This line of action will
be pursued even to a greater degree
by the new company. The development
of rural service will receive systematic
attention. Already some 10000 farms
are connected with the system, and as
the last census shows that there are
over 10000 farms in California alone,
the possibilities of extension in this
direction are very apparent. The mat
ter of the welfare of employees is to
receive further consideration, the
telephone company being one of the
pioneers in providing for the care and
comfort of employees, as is shown by the
lunch and recreation rooms and
emergency hospital facilities now II
part of almost every large exchange
which investment is no doubt returned
in increased loyalty and interest.
Vast Number of Subscribers
There is another side also to the ac-
tivity possibly prompting this con-
templated outlay of millions, which
may perhaps show that satisfied sub
scriber means a satisfied stockholder.
The fact may not be generally known
that the territory in which the Pacific
Telephone and Telegraph company will
operate shows a greater number of
telephones in use, per capita, than any
section of equal population, and the de-
mand for telephones is increasing in a
remarkable ratio; for instance, the in
creased connections of the old compa-
nies in the year 1905 averaged 2S0O per
month; in the first four months Of
1906. outside of San Francisco, this aV-