Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1908-09-05
BIG TELEPHONE DEAL
IN STATE OF MAINE.
The New England Co. Obtains Control
Of Northeastern, Lewiston & Au-.
burn and Cumberland Cos,

Portland, Me, Sept, 4.-(SpecaD.-
The New England Telephone & Tele-
graph Co. has secured control of the
Northeastern Telephone Co. the Lew
iston-Auburn Telephone Co. and the
Cumberland Telephone Co, three indc-
pendent companies operating in some
% towns and cities in the State of
Maine. How this control was secured
the New England Telephone & Tele-
graph Co. believes to be of legitimate
interest to the general public as well as
10 the Unite d number of the stock and
bond holders of those companies.
The most considerable of those COM
panleS. the Northeastern Telephone
Co, was Incorporated under the gen.
crdl laws of the State OF Maine in
lSS2 under the name of the Dirigo Tel
cphone Co. In 1883. seven months be-
fore the Incorporation of the New Eng
land Telephone e Telegraph Co. its
powers We're enlarged by special act
and in ApIl. 1902. it's name WAS
hanged to the Northeastern Telephone
70. BY the act of 1885, the amount of
stock authorized was $1,000. 900 of
Which 100000 was finally issued at a
G,r value of 80. On Dec. 1, 1902 a
mortgage was given to the Portland
lrust Co. on the entire property of the
"hli any to secure a bond issue of
'600.0oG The stock was advertised as
: . per cent. stock and the bonds bore
interest at per cent. The fact that
he bond and stockholders were mainly
the same and in most cases held an
equal amount of stocks and bonds Gre
1teS the presumption in the light of
he history of the company that little
IT nothing was paid for the stock
Certainly nothing was received from
it in the way of dividends
After the general custom in indie
pendent financing the bonds were
mostly issued to construction COM
Dany in payment for the plant, a GUS
tom resulting in this case as in others
in no appreciate advantage except to
the construction company in the pos
Sibility of it's securing a double profit,
at the expense of the operating COM
pany. Some bonds and stock were
placed in small amounts among local
enthusiasts for competition who were
dissatisfied with existing conditions or
were eager for low rates For the COM
pany was, in the language of the cir
GUAR, the Investors and Subscribers
Mutual Benefit Public Service Corpor-
alton" And rates We're promised ig-
norantly and imprOvidently. To quote
from another circular "the above rates
are less than half the present rental
charges for the miscalled private line
telephone of the New England (BelD
Co."
In 1902 and 1903 it rained circulars
to prove the advantages offered by the
Northeastern Co. Apparently the plant
was paid for on the basis OF 10000 sub
scripers But history was made very
rapidly; too rapidly even for the con-
struction company to get rid of all its
BONDS. With ignorance of operating
conditions, with seeming disregard of
depreciation and with large open
construction account, the Northeastern
Telephone Co. drove rapidly towards
failure. till in the fall of 1907 with
about 5000 subscribers and with Is
months defau1ted interest on it's
bonds it passed into the hands OF d
receiver.
Since then there have been issued
receivers certificates to the amount OF
| 800. 500. The balance sheet of June 30.
1905, shows a deficit of s59,377.?s.
The Lewinston- Auburn Telephone
Co. was organized April 2, 1903 under
the general laws of the State of Maine
| with an authorized capital stock or
| $3.50, 900. par value $780, all of when
| was issued. It's exchange territory is
| Tho two cities of Lewiston and Au-
| 49,. ~, Nav u 1909 II had 1910 sub
sc,ibers. and on Aug. 20. 1908. 1921 sub
scribers, including some free tele-
phones. On April I, 1904. it executed a
trust mortgage to the Portland Trust
co. 70 secure s25O.OoO 2O-year per cent
bonds. AS in the case of the Northeast
ern. a construction company took most
of the bonds and stock. Interest was
paid in full on the bonds to Marcn 81
1906. and a partial payment a!'.oui'. LIZ
to s4oo was made on Sept &c. 1906
| CO.: .ho+ ti,,e no paymentS have