The Lake County times., 1908-06-09
HAS ONE FRANCHISE
AND CLAIMS FOUR
In Glittering Prospectus Telephone
Company Gives Out Some Surpris-
ing Statements Which Are Not
Borne Out by Facts-Trust Com
pany Was Not Impressed.

In an effort to borrow a quarter of a
million dollars from the Merchants
Loan & Trust company of Chicago for
the purpose of Installing "A telephone
sytem In Gary, Whiting, East Chicago
and Hammond, the Interstate Auto
matte Telephone company, whose rep
resentative, G. j. HufT, made the state
ment to the East Chicago city council
that his company is backed by j. Og-
den Armour and has unlimited capital,
now presents a prospectus of the COM
pany to this trust company and offers
it's entire capital stock, amounting to
s1,OOO,0OO, and franchises in the four
for the loan.
The letter. which was addressed to
orson Smith, president Of the trust
company, makes the fQllowing unauaai-
fed statement: The above-named
company owns and controls the fran
chises of Gary, Whiting, East Chicago
and Hammond and intends construct
ing and installing the automatic tele-
phone system in the above named cities
in conjunction with all of the connect
ing lines
Only Got One Franchise.
The facts of the case are that the
Interstate Automatic Telephone COM
pany has secured franchises in but one
city in the Calumet region, namely:
Whiting, and in the one case where a
franchise has been secured the $1,000
bond which is to be put up with the
acceptance of the franchise is not yet
in evidence, although the franchise was
granted several months ago.
But some of the other statements in
the prospectus of the company are all
the more surprising to the people of
the Calumet region. who were not
aware of the facts until they were
vouched for by Foss and Afford, the
investment company through which the
Interstate company is attempting to
finance its DEAL
Offer Per Cent Gold Bonds.
Foss and Afford offer 100000
worth of per cent gold bonds, to be
issued in addition to the franchise to
be placed in escrow in the Merchants
Loan & Trust company for the follow
ing considerati tions:
The loan of s25O,000 to start the in
stallation of the plant. They want the
money advanced in monthly INSTALL
ments of s25,00O. The Interstate. com
pany offers to pay for the services of a
man to audit all bills and payrolls
The Interstate Telephone company
will then begin the sale of bonds to
liquidate the $25o,000. the bonds to be
issued from the bank and the money
received will be placed to the credit Of
the telephone company
The FOss and Afford company further
agrees to give the Merchants Loan &
Trust company the opportunity to pur-
chase the bonds at 80 to cover the
s250,0Oo. Our Mr.. HUFF" the letter
goes on to say, will be glad to show
you the franchises and data on this
proposition
Stock Issue Permissible
The company is chartered under the
laws of the state of Indiana with all
of the rights of common carrier and
is authorized to issue stock to the ex
tent of $1,000,000 to carry on its work
in Lake county Indiana.
Lake county" the prospectus saws.
has a population of loo. 600. The
company is to operate exchanges in all
Of the aforementioned places (Gary,
Indiana Harbor. East Chicago, Whiting.
and Hammond) under franchise rights
and connect them with toll lines
| throughout.
The independent telephone COM
! panies of Indiana have 100000 tele-
| phones while the Bell company has
$4,000. In the United states the inde-
| pendent companies have $500, 600
! phones and the Bell company has L.
| 250, ,00O."
| One Of the most surprising state
/ ments is the following: 1T is a well
known fact that independent telephone
securities are better than the securi-
| ties of national banks"
Claim About Cities.
The letter goes on to state that the
! future of Gary is assured; the people