The San Francisco call., 1907-01-03
PHONE INTERESTS
IN BIC MERCER
New Corporation Absorbs
Holdings of Sunset and
Pacific States Companies
CAPITAL OF y$5O,oOO,OOO

/ business and financial interests of the
Pacific Coast. The Sunset Telephone
and Telegraph Company and Pa
cific States Telephone and Tele-
graph Company, with their mill
lions of invested capital and thou
ton, Oregon, Nevada, California and
Arizona, have been absorbed and their
property taken over by a greater cor
poration-the Pacific Telephone and
Telegraph Company. The new corpora
tion has purchased the property of the
Pacific States Company in California,
and has taken, under long leases, prac-
tically all the lines and equipment Of
the Sunset Company and those of the
Pacific States Company outside of Cali
fornia. The capital of the new corpor-
alton has been fixed at 1000, 000 of
which $32,000,000 is preferred and $1S,-
o00, 900 common stock Tt is the inten-
tion of the company to issue, as re-
quired, s35. 100000 of 8 per cent bonds,
the proceeds of the sale Of which are
to be devoted entirely to improvements
and extensions of the companys SER
vice. 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 obli-
cations, as the standing of the direc-
torate assures the most efficient man
disaster in San Francisco, involving
such tremendous losses, has so en-
phatically brought home TO investors
the wisdom of diversified assets as
basis of mortgage security. The ar
rangement has been perfected with the
CO. operation of the shareholders of the
old companies, having in view the eco
nomic advantages and efficiency or
management possible under operation
by one company.
It is learned that it will be the policy
of the American Telephone and Tele-
graph Company. which, it is understood,
holds the controlling interest in the
new coast company, to continue with
renewed vigor the policy of improve
ment initiated prior to the San Fran
cisco disaster of last April, and that
such plans will be carried to complete
execution requires no. further guaranty
than this determination of the parent
company. In that city alone at the
time of the fire the company was pro-
ceeding under Improvement estimates
aggregatinE SI926,0O0. In the main
ofice the installation of the largest
multiple switchboard in the world had
been practically completed under the
direction of a large corps of experts
from the East In the three days an
exchange of $4,000 subscribers, with
its costly and intricate appliances, was
practically swept from existence, in
volving the laborious and expensive
reconnection 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 being
reflected in an unprecedented demand
for telephone apparatus from all sec
tions of the country, orders from this
coast have, without exception, been
given the preference, resulting in de-
liveries within four instead of twelve
months, the time heretofore exacted
by manufacturers between order and
delivery. Probably no business enter
prise met with greater loss in the
disaster 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 its success
in overcoming difficulties and its prog
ress in the way Of rehabilitation work
have been matters of general commen-
dation-
The same policy of Improvement is
to be adopted throughout the entire
system of the company, with is 1900
exchanges, 100000 telephones anu TO-
600 miles of toll wire. Uncer the d.
rection of an added force of construc-
ton and electrical engineers now on
the ground, orders have been given
and preparation made for the perma-
nent installation of multiple switch
boards of the latest type, assuring a
service second to nona in the world.
For some time the old companies have
been acquiring sites for their ex-
changes in the various cities and
towns of the coast, and have aimed to
improve such properties with structures
Afr0f I've ass
This line of action will be pursued even
to a greater degree by the new COM
pany. The development of rural serv
ice will receive systematic attention
Already some 10000 farms are connect
ed with the system, and as the last
census shows that there are over 150,-
600 farms in California alone, the pos
sibilities of extension in this direction
are very apparent The matter of the
welfare of employees is to receive fur
ther consideration, the telephone COM
pany being one OF the pioneers in pro-
viding for the care and comfort of en-
ployes, as is shown by the lunch and
recreation rooms and emergency hos
pital facilities now a part Oh lost
every large exchange, which invest
ment is no doubt returned in increased
loyalty and interest
There is another side also to the
activity possibly prompting this con-
templated outlay of million, which
may perhaps show that satisned 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 tnan any |
section Of equal population, and the
demand for telephones is increasing in |
a remarkable ratio; Ior instance, the in
creased connections of the old compa- |
MES in the year 1905 averaged $500 per
month; in the first four months of 1906 |
outside OF San Francisco, this average /
had increased to 1900 per month, and |
1t is confidently expected that when |
the contemplated equipment is avail
able systematic canvassing will result |
in an increase of 10000 telephone sta
tions per month. The telephone. "the |
most indispensable of modern utilities"
is rapidly taking its place In domestic
and business economy, not as a luxury
or convenience, but as a necessity
This increase, too, is a matter which
interests every subscriber. The value
of a telephone is in the number of sub
scribers it Will reach. The patron of
an exchange of 1000 subscribers has
ten times the service of that OF 100.