The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1909-03-26

i In the annual report of the Ameri
] can Telephone ana Telegraph com
lpany, President Theodore n. Vail sets
forth the usual statistics, which indi-
cate by the growth of the business the
place which the telephone holds with
the public.
There was total of 1864, 500 tele-
phone stations connected to the Bel
System as against 3,S39,000 at the
close of the previous year, an increase
of 525.629 stations. OF the total there
were l,lO3,l44 exchange and toll sta
tions connected to the Bell system by
ltoll or long distance lines, but operated
by some 100 local, cooperative, and
rural Independent companies or associa-
tions having sub license or connection
contracts.
The report also sets forth the rela-
ton of the American Telephone and
Telegraph company with the associated
companies. As there related, it ex-
hibits the American Telephone and
Telegraph company and its associated
companies as one system. made up of
the local systems of the associated
companies each doing its part in its
particular territory-in providing the
facilities and operating the plant
while the American Telephone and
Telegraph company binds them all to-
gcther in one united whole, with its
long distance lines and centralized gen
cral management furnishing each that
assistance and cooperation which all
alike require while not interfering with
any function particular to each.
In this way the Bell system has
developed one united wholc-each
part supplcmenting the other ac-
counting for the most wonderful of
all the developments of the most Won
dcrful instrument of public utility.
convenience, comfort and necessity of
modern times.
! The report calls attention to the diff
ference between the development in
this country and Canada, and that of
other countries and to the difference
as is given in this country as com
pared with other countries. While the
average price for all users in this
country is, relative to wages, cost of
conservation and other expenses. about
the same rs if not lower than in any
other country, the greater value makes
it far cheaper to the public in this
| country than lin any other, and if
there are greater maximum prices there
is also greater maximum value. Prices
are relative to value not to cost.
| The Bell system, that is the Ameri
can Telephone and Telegraph and as
ISOLATED companies in United States
and Canada, is for the first time shown
as Il whole. The figures are astonish
ing. The gross valuation of plant,
working capital and working aces
sories is given as about S6S0,000,000.-
while the outstanding obligations in
the hands of the public are given as
about $600,000,O00. The public are
only required to pay dividends and
interest on this $60O,000.000 while they
receive the service of $6SOO0OOOO of
plant. This plant, SO far as any def
mite Independent appraisements are con
cerned, has replacement value Of
considerably above that amount.
The surplus has come from several
cause.-the profits of the business dur
ing the years that no dividends were
distributed to the shareholders, the
amount of maintenance and recOnstruc-
ton and depreciation reserve invested
in the betterments as against future
requirements.
As the supreme court of the United
States has laid down as an obliga-
ton, not merely duty, of corporate
managers to provide fully for these
items of maintenance, reconstruction
and depreciation before dividing pro-
fits between the shareholders, the ac-
ton of those in control of the Bell
system is not only obligatory but it
is cOmmendable that they without com
pulsion should have been so conserva-
tive. The public is getting the bene-
fit of this plant without paying inter
est OF dividends on it's cost. During
the current year over $4O,OOOOOO was
expended or set aside for maintenance
and depreciation.
4 The report also makes clear that
under the existing knowledge and eX.
perience, this provision for the items
iof maintenance is conservative and
necessary to provide for extraordinary
emergencies. and explains that this
lprOvision will be reduced as fast as a
wise management and conservative pol
icy can see its way to do so.
Another feature of the report is tn,
, permanent nature of the plant al
compared with the temporary natur,
of past years.
Iron wires are things of the past
Amounting to only four per cent o
the value of the plant-the rest o
the wire being copper. Fifty pc
cent OF the exchange wires, over 8,
OO0,0W miles, are underground in per
nlanent conduits. and forty three pc
cent OH poles. -Four per cent of tn
total value of this wonderful system
Is real estate, twenty per cent j
!. underground conduts' and cables, eigh