Cameron County press. [volume] (Emporium, Cameron County, Pa.) 1866-1922, 1910-12-22
TURNING ON LIGHT
PRESIDENT WALLS BOLD MOVE
MARKS EPOCH IN FINANCE.
Accuracy Reduced Western Unions
Surplus $4,000, ,0oo,-"PubIicity"
Inspired Such Confidence That
Its Stock Went Up.

Are the great financiers of the
country beginning to see new light?
Time was, until recently in fact, when
the men at the head of the big cor
porations kept their business to
themselves" as far as the law would
allow. Capable men at the head of the
big concerns, long realized the weak
ness of their position, but what was
needed obviously as in all great re-
forms, was an unmistakahle occasion
and a courageous man. The occasion
arose in the purchase of the Western
Union Telegraph company by the
American Telephone and Telegraph
company, and the man appeared in
Theodore N. Vail, President of the
purchasing corporation.
1t was last December when public
announcement was made that the
Gould holdings of Western Union had
been taken over by the Telephone
company.
On account of the high esteem in
which the management of the tele-
phone company is so generally held,
great things were predicted as a re-
suit of the absorption of Western
Union. BY the press of the country
the deal" was most favorably COM
mented on, it being widely pointed
out that under the direction of such
men as Theodore n. Vail and his as
sociates, the telegraph company was
bound soon to work itself into a po-
sition where it could offer the public
far more efficient service than 1t had
ever before been able to offer.
But very few months had elapsed
when it became apparent to the new
to-date appraisal of the company's
assets would make possible a far
greater degree of efficiency of oper-
alton. Here" they said to them
selves, we've bought control of this
property and we know it's immensely
valuable. but We don't know just
bow valuable. These appraisals of
real estate and securities owned were
made a long time ago. If we have
complete inventory made of every
thing we've got we can announce the
facts to the public, start a new set of
books, and begin our responsibility
to stockholders right there"
How inventory Was Taken.
The most expert accountants and
appraisers to be had were put at the
task. Their labors lasted over eight
months. Their report and it's publi-
cation by the company marks an ep-
Gch in finance.
1t began by recommending an ad.
| justment of the difference between
the appraised and book values by a
charge of s5,595,0S9 against sur.
plus. Book values of securities held
We're reduced to market values, bad
and doubtful accounts were "charg.
ed off" an allowance OF 100000
was made for depreciation" another
/ of $500 900 for reserve" and so on,
until the old surplus of s1S.S67. .OOg
came down TO S5,136,OOe
It required courage, the publication
/ of this statement to stockholders, say.
ing in effect: THE property OF
your company has been reval
ued; the surplus isn't nineteen mill
ions, as you have been led TO be
| lieve, but five millions" but II was
| the truth. and President Vail did not
| finch. Accuracy and publicity" he
| declared, was essential. The stock
| holder has right to know The
shares of this company are scatter
| ed from one end of the Union to the
/ other. This is more than private
corporation, II is a great national
enterprise The public is entitled "a
/ the facts"
The report was ordered published
/ forthwith. Fiuanciers OF the old
school and spectators generally were
aghast. What would happene Would
/ the bottom drop out OF Western
/ Union when the shareholders realiz
ed that their property was worth
/ sl3,0O0O00 less than they had sup
/ posed' But the amazing thing
happened The stock went up and
stayed up. The public had respond
ed to this remarkable display OF
frankne5s ana confidence. % the new
/ motto, Accuracy and Publicity"
The fun significance of the action
+ ~ the new board Is stated couciseIy
By lIarpcr's Weekly IN those words.
IT'S this policy ut publicity ANA ol
open handed dealing with sbarchuld
ers and public the furvrunuer of d
similar movement au the part of oth
er bE corporations Certainly It i-