Omaha daily bee., 1909-12-12

slightly over S29. 900. 600. and the net Ss.2tt.-
600. Since then an increase OF gross to SS2,-
S56,OO by 1907. was accompanied by con-
stantly decreasing net until in that year,
when only $780, 900, O00.53 was left after pay
ing the dividend, the net income reduced
to 1891, 149, approximately commensurate
with the net back in 1873. when the gross
earnings OF the company were less than
ti1,OO,o@ The analysis of the income ac-
count showed a constantly increasing ten
dency in the operating expense-a tendency
that has increased disproportionately to
the increase of the gross earnings. Wall
street was not surprised at the suspension
OF cash dividends by the Western Union
in 1905, which carried the stock down to
Sal a share. the lowest price reached since
the Gould raid on the old Vanderbilt COM
pany.
Genius Of the Telephone.
The basis of the growth which the tel
ephone combination had enjoyed, mean
while, we have already seen. II remains
now only to look at a few of the results
and to reacduaint ourselves with the
present genius Of the telephone. Theo-
dore N. Vail. In 1885 there we're 6O,sSS in
struments in use by subscribers to all OF
the Bell companies. In 1890 there were
4s3, 100 Instruments in use. BY 1900 this
had increased to 1,g52, 412 Instruments. In
1904 it stood at 1865, $50 instruments and on
July l, this year, there were 1885, PAS Bell
telephone stations, which does not include
extensions within a given office, plant or
building not connected with distinct trunk
lines, to the central office. OF course, the
telephone trust has had its troubles. Some
of them were experienced in 1907, when the
increasing rtringency of money conditions
/ rnada a. mara aud mora diffinrlt IN fipanCa
the ever-growing requirements OF the busl-
ness. which demanded that millions upon
millions OF new capital should be raised
every year to string new wires, lay new
condults and install new exchanges and in
struments
In the spring of that year Frederick p.
Fish, who had been president of the Amer
lean Telephone and Telegraph company for
a number of years, resigned and the d.
r%ectors, in something of a quardary as to
who should succeed him, turned again to
Mr.. Vail. who years ago had made all the
money that he thought he needed, and
more than he could possibly spend. and
had retired to his big farm up in Lyndon,
VT. They found Mr.. Vail devoting his I'm
firing mind to experiments in scientific
soil culture and dairylng, and thinking that
he was having the best time of his life.
At first he refused: he said he was too
old; he was So years old, but the telephone
directors were 'insistent, and as he was
one OF their number. always having re-
tanned his place on the board, he finally
yielded and went back into the harness.
Then started the present period of tele-
phone development. 1t was some trouble
to raise the twenty-odd millions required
in June, 1907, and the telephone stock sold
down to 1924 in the process. 1t was the
lowest quotation in ten years. The under
writing syndicate that had taken $1OO, 900, 900
telephone bonds had to make a further
call on its subscribers the same year and
then came on the panic. But the telephone
company had its immediate needs financed
and 1t went through the panic without
difficulty and Oh into the year 1905. In
that year it established a record. 1t was
the only one Of the great corporations in
the industrial field that same out of the
years depression with increased net earn
ings and In December a year ago there was
no hesitation WI en- $5O,OOO.OOO more tele-
phone bonds were put out to the public
through J. p. Morgan & Co. and Kuhn
Loeb g. Co.
PresRginE the Merger.
The present year has been an interesting
oAAO ia CA%BAOAA AAAoNOA - IA Nv
ern Union finally got things going It's way
in the famous old suit, the American Tele-
, phone and Telegraph bought back from its
: old time enemy SIC. OOO, 900 stock of the New
1 York Telephone company, which the West
0 ern Union took in exchange for its hold.
I ings in the old Bell company. The off.
v cials of the Western Union said that this
4 stock was sold so that the funds of ths
$ company might find other and more at.
tractive lines of investment. Wall street
q said that 1t presaged a merger and Wal
streets view seems to be nearer correct
f although all talk of anything that might
n approach a formal or definite merger is
4 of course, altogether premature at this
g time. What President Vail is thinkinl
d about these days is quite another story.
Let us, before we close, take q look a
some Of the figures that build the out
n lines of the telephone combination as 1
3 exists today. We find that the American
n Telephone & Telegraph company had oil
d July l, last, 1858, S74, 500 stocks and bonds
s outstanding in the hands OF the public, tina
its thirty operating subsidiaries have $2O2,
4S7, 800 of stocks and bonds in the hands o
u ~the~public, besides the holdings of thu
American Telephone & Telegraph compan.
|" in these corporations, while the Western
Electric company has $40. $4,000 in securl
ties similarly In public hands. This make
a total Of 1892, 475, 400 Bell telephone securi
ties held by the public, being 1861, 6s6, 800 II
n stock and $3.50. $685. COO in various interest
bering obligations.
II The income account of the America
Telephone & Telegraph and associated op
IN Grating companies, excluding all payment
to the American Telephone & TELEGRAPH
n by the subsidiaries. OF interest, dividend
70 and the like, showed for the year 1908 gros
ID earnings of $l40,Ol6 900, an increase Of 1900,
m 600 over 1907, and the net earnings wer
$45, s74,0 900, an increase of $3,9Os, 400. Afte
the payment OF interest a balance appl
cable to dividends of $34, e39. 600 remained a
against the $S11, SS7, 800 stock then o%utstand
ing In the hand OF the public. Dividends I
all the various companies, exclusive q
those paid to the American Telephone
Telegraph by the subsidiaries, amounte
to $2i, SSS, 100, leaving undivided profits @
. SI3,GOl, 100.
Immense Resources.
The annual report OF the company II
m vited attention to the comparison {
property with capital obligations whic
The company was able TO make, and tn