The Somerset reporter. [volume] (Skowhegan, Me.) 1868-1909, 1908-09-10
New England Co. Gets ALI of Them.
Secures Control of Group of Independent
Telephone Companies.


The Northeastern. the Lewiston d. Auburn
and CONFERENCE.-The of the New
England Co. not To BE Raised-0ther
Concerns tn lie Closed Out.
The New England Telephone and
Telegraph Company has secured con-
troll of the Northeastern Telephone
Company, the Lewiston Auburn Tele-
phone Company, and the Cumber-
land Telephone Company, three in
dependent companies operating in
some rs towns aud cities in the
State of Maine. How this control
was secured the New England Tele-
phone and Telegraph Company be-
lieves to be of legitimate interest to
the general public as we'll as to the
limited number of the stock and bond
holders of those companies.
The most considerable of these
companies, the Northeastern Tele-
phone Company, was incorporated
under the general laws of the State
of Maine in 1882 under the name of
the Dirigo Telephone Company. In
1888, seven months before the in
corporation of the New England
Telephone and Telegraph Company,
its powers were enlarged by special
act and in April, 1902, it's name was
changed to the Northeastern Tele-
phone Company. By the act of 1888
the amount of stock authorized was
100000 of which S600,00 was finally
issued at a par value of a10. On Dec
i, 1902. mortgage was given TO the
Portland Trust Company. on the
entire property of the company to
secure a bond issue of $500, 900. The
stock was advertised as a five per
cent stock and the bonds bore interest
at five per cent. The fact that the
bond and stock holders were mainly
the same and in most cases held an
equal amount of stocks and bonds
creates the presumption in the light
of the history of the company that
little or nothing was paid for the
stock. Certainly nothing was re-
ceived from 1t in the way OF dividends.
After the general custom Of indie
pendent financing the bonds were
mostly issued to a construction COM
pany in payment for the plant, a
custom resulting in this case as in
others in no appreciate advantage
except to the construction company
in the possibility of it's securing a
double profit, at the expense of the
operating company. 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
circular, the "Investors' and Sub
scribers' Mutual Benefit Public Ser
vice Corporation" And rates were
promised ignorantly and IMPROVE
IDENTITY; to quote from another circu-
lar 1.-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 1908 it rained circulars
to prove the advantages offered by
the Northeastern Company. Appar-
emily the plant was paid for on the
basis of 10000 subscribers. But hsto-
ry was made very rapidly; too rapid
ly even for the construction company
to get rid of all its bonds. With ig-
norance of operating conditions, with
seeming disregard of depreciation
and with a large open construction
account, the Northeastern Telephone
Company drove rapidly towards fail
ure, till in the fall of 1907 with about
5000 subscribers and with eighteen
months defaulted interest on its
bonds, it passed into the hands of a
receiver.
Since then there have been issued
receivers certificates to the amount
of S20,500 The balance sheet of June
80, 1908 shows a deficit of 59,377.2s.
The lewiston Auburn Telephone
Company was organized April 2, 1908
under the general laws of the State of
Maine with an authorized capital
stock of $3.50, 900, par value 800, all
of which was issued. It's exchange
territory is the two cities of Lewiston
and Auburn. On May 81, 1905 it had
1910 subscribers, and Oh Aug 20, 1908,
1421 subscribers, including some free
telephones. On April /, 1904 it exc
cuted trust mortgage to the Port
land Trust Company to secure $3.50, 900
20 year five per cent bonds. AS in
the case of the Northeastern, con-
struction company took most of the
bonds and stock. Interest was paid
in full on the bonds to March 81, 1906
and partial payment amounting to
s400 was made on Sept. 80, 1905.
Since that time no payments have
been made. No dividends have been
paid on the stock. The company's
balance sheet of June 80, 1908 shows
deficit of $24, 10S.65. Considering the
number of Subscribers this fairly is
comparable with the Northeastern
Company's deficit of 59,377.28.
The Cumbe rland Telephone Com
pany, the smallest of the three CONF
panies was organized under the gem
eral laws of the State of Maine, July
10, 1908, with a capital stock of $50, 900
divided into 100 shares of common
stock of the par value of 500 each,
and 400 shares of prefe, red stock of
the par value of 500 each. Its terri
tory is mainly the town of Gorham
and city of West brook, and it started
in business with about 81 subscribers
which have decreased to IS In the last
five years. 1t never issued any bonds
and the dividends it paid during the
years, 1904, 1905 and 1905 were not
earned. The balance sheet of June
30, 1908 shows a deficit of S2064 20.
Briefly told, the history of all three
of these companies is that they have
been run at a loss, which is even
prpnter than tho tipurea upotad ebou