The morning Astorian. [volume] (Astoria, Oregon) 1899-1930, 1909-04-11


and interest on this $6O0,000.0OO while
they receive the service Of s6SOI0OO,-
600 Of plant This plane. SO far as any
definite independent appraisements
are concerned, has a replacement
value Of considerably above that
amount.
The surplus has come from several
cause.-the profits Of the business
during the years that no dividends
were distributed TO the shareholders
the amo1nt Of maintenance and re-
construction and depreciation invest
ed in the betterments as against future
requirements.
AS the Supreme Court Of the United
States has laid down as an obligation.
not merely duty, Of corporate man
ayers 10 provide fully for these items
Of maintenance, reconstruction and
depreciation before dividing profits
between the shareholders, the action
OF those in control Of the Bell system
is not only obligatory but it is COM
mendable that they without eompul-
sion should have been so conservative.
The public is getting the benefit of
this plant without paying interest or
dividends on its cost. During the
current year over $400OO,0O0 was ex-
pended or set aside for maintenance
and depreciation.
The report also makes clear tha-
under the existing knowledge and ex-
perience. this provision for the items
Of maintenance is conservative and
necessary to provide for extraordin-
airy emergencies, and explains that
this provision will be reduced as fast
as a wise management and conserva-
tive policy can see its way to do so.
Another feature Of the report is the
permanent nature of the plant as com
pared with the temporary nature o.
past years.
Iron wires are things Of the past
I, amounting to only four per cent o
1.-The value Of the plant--the rest OF th'
wire being copper, Fifty-seven pei
cent of the exchange wires, ovel
100000 miles, are underground II
lpermanent condhits, and forty-thre'
per cent on poles. -Four per cent. o
the total value Of this wonderful sys
TEN is real estate, twenty per cent. 4
underground conduits and cables
eighteen per cent. is copper wire ope'
and in lead covered cables on poles
Office and substation equipment Q
what might be called terminal tacili
ties, constitute twenty-three per cent
Of the whole. II might be argues
that with this permanency the main
tenance provision is excessive. 1t !
excessive only in that it provide
against the unknown future on tn
! basis of the known past, and tha
whatever is excess is not wasted bu
exists in an improved perfect plan
I without which good service canno
I be given,
This statement Of all companies a
\ so shows that there was divisibl
I surplus after interest charges Of tn
Z system as whole, Of $S4,00O,0OO :
I which S2lOO0,000 only was divide
= among shareholders, leaving undiviC
I ed $l3ooo,OOo.
Z 1t would seem impossible to maintai
I successfully any charge Of extortio
\ when the shareholders Of system
I this importance and magnitude onl
4 divides between themselves three pt
/ cent. on the total valuation of tt
I plant.
4 This represents the conservatism
\ the past in allowing the surplus earl
! ings to 60 into the plant instead
I being divided in the shareholder
4 pockets, in this way creating stab
\ ity and certainty which must be mo
Z comforting to the shareholders,
I Attention is also drawn to the ia
I that Notwithstanding the business d
4 preston the business Of the telephoi
I company shows an increase, not qui