Omaha daily bee., 1909-03-24
President Vail shows in Annual Re-
port that Raising Of
Efficiency Pays Patrons
and Stockholders.

80 w VI olAA
service Of $3.50, rs, which represents a gain
of more than 100000 miles during the
year.
Coming down to the money side OF the
proposition he shows that plant additions
were made during the year amounting in
cost to SIS $4,000 for exchanges alone.
%,Sl2,60o for toll lines and s.. OOO.6O for land
and buildings, giving a total Of S96, 637, 200. In
the last nine years President Vail shows
mat the grand total OF expenditures for
engagements Of Bell properties reaches
the gigantic figure of 1878 72, 500. In the
year covered by this report there was ex-
pended out OF the revenue to maintenance
and construction the sum Of SS9, 1856. 100.
The report shows that the steady flow Of
money into the channels of Improvement
and maintenance is constantly raising the
standard \of efficiency of the plant and.
making more substantial its permanent
character. This is attributed largely TO the
increased proportion of copper wire and
underground conduits and cables in use.
Elements Of the Plant.
Real estate constitutes Q per cent, under
ground conduits and cables 20 per cent. COP
per wires and aerial cables on poles Is per
cent, pole lines mot wires rs per cent. iron
wires 4 per cent and central office euulp-
ment q per cent of the holdings OF the
American Telephone and Telegraph com
psny and associate kindred concerns. This
comprises the total value OF the plants
owned by the head company and the asso-
ciated concerns. 100000 comprising the
amount OF money tied up in ownership Of
rights OF way over private property.
A net Improvement OF s.. OO4. 900 in reduc-
tons in floating Indebtedness and Increases
in funds on hand is shown by the associated
operating companies. This places the cur
rent Indebtedness of these associated OPP
Grating companies, as we'll as their floating
debt. well within the limits of current OPP
e%rations. An equal Improvement in its con-
dition is reported by the Western Electric
company.
Substantial Improvement is shown by the
Bell plants, President Vail reporting that
the real or replacement value Of the Bell
plants is largely in excess Of all outstand-
ing obligations. In showing the improve
ment in the Bell business as a whole dupli-
cations are excluded and the company Is
treated as If il were operated as a single
concern.
The sum Of SIS col, 400 in undivided profits
is left in the Bell business according to the
statement blythe president.
The total earnings OF the company showed
an increase of 5000, 500 over those of the
previous year. Against this the total ex-
penses of the company were increased by
81, lOl, 100. This left a balance Of net earn
ings Of 81, $4,000. Interest reduced the net
earnings by $11 ,0S4 500 and dividends by $21.
3SS, 100, leaving over $13. 0O0. COZ for undivided
profits. The total assets OF the concern.
as shown by the combined balance sheet,
amount to $3.50, O4, 200, with a surplus of
Ss1, 759,6N and depreciation and other re-
serves of $40, $50, 800.
Dividends and Surplus.
After paying dividends Of 8 per cont,
amounting to $40, 4B9, 1856, a surplus Of s., sso,-
55l. 26 was left in the earnings of the Amer
lean Telephone and Telegraph company.
A decided improvement. not only over last
year. but over all previous years, was
shown by the earnings Of the company
The net revenue OF the American company
amounted to SIS. 11, 7W.28.
An average Of sixty shares are held by
each OF the 26.S70 stockholders. according
to the presidents statement. a considerable
increase In the number Of shareholders
being one result Of the years business. The
financing of the company for 1902 and 1910.
including the payment of $l ,O0O 600 of notes
maturing during these two years, has been
accomplished by the issue of the balance
Of the authorized $4,000. 90 convertible
bonds.
The relations Of the American Telephone
and Telegraph company to the associated
companies are explained in considerable
detail in the report. 1t was primarily n
holding company. though It owns and oper-
ates the long distance lines which connect
the systems Of the associated companies,
assuming what might be termed the Cen
tralized administrative functions Of all the
associated companies in addition to being
a holding company and the owner Of con-
Meeting lines.
TelephonicsIly t-nterconnected, intercom-
municating and Observation-Disclosures is the
Bell system, built on the policy that any
one of 1900. 900 subscribers can talk with
any other one within the carrying power nj
the voice over the wires. New ideas, inven-
lions and methods are made universally
available after being examined and per-
fected.
Not Enough Distinction.
The report says: There has not been
sufficient distinction between the indepen-
dents and the opposition in the minds OF
the public. We have no quarrel with either,
with many OF the independents we are
working In complete harmony and for all
practical purposes our system is a part OF
theirs and their system is a part If ours
on the other hand, President Vail SAYS
that there is a decided tendency on the
part OF the public to favor consolidation.
Under intelligent control and a broad
, policy, the Bell system has developed until
It has assimilated itself into and i'm fact
become the nervous system Of the business
} and social organization of the country,
There are now 1000 shareholders in the
} system, which has shown an increase from
, year to year, no matter what have been the
prevailing business conditions.
! The combination o, all local systems into
} one combined system developed as a whole
Is the result Of the centralized general con-
) troll exercised by the company. In nc
, country does the telephone occupy the Same
high and servieeable relation to the public
d as a whole as IL does in America, but, not.