Kingsbury County independent. (DeSmet, Kingsbury County, S.D.) 1894-1929, 1910-12-16
ERA|N FINANCE
ACCURACY AND PU1LIcITH
PROVES TO BE A POPULAR
MOTTO.
Prompt Response to Bold Move 81
President vsii-"Accuracy Heducsd
Western Unions Surplus tf3.oo0.o0o
Publicity" Restored Condolences
and Its Stock Went Up.

Are the great f~nanciers OF the coun-
try beginning to see q new nghtx
Time was, until recently In fact, when
the men at the head of the big corpor-
atoms kept their business TO them-
selves" as far as the law would ale
low. Capable men at the head OF the
big concerns long realized h weak
ness Of their positions, but what wae
needed obviously, as in all great re-
forms, was an unmistakable occasion
and a courageous man. The occasion
arose IN the purchase OF n Western
Union Telegraph company by the
| American Telephone and Telegraph
company, n the man appeared II
Theodore N. Vail, president Of the pur-
chasing corporation.
IT was last December when public
announcement was made that the
been taken over by the telephone conn
pany.
On account Of the high esteem In
which the management OF the tele-
phone company Is 80 generally held,
great things were predicted as q result
OF the absorption OF Western Unfon.
BY the press OF the country the 'sdeal'
was most favorably commented on, IL
being widely pointed out that under
the direction OF such men as Theodore
N. Vail and his associates, the tele-
graph company was bound o to
work Itself into a position where nj
could offer the public far more efficient
service than 1t had aver before been
able to offer.
But q very few months had elapsed
when * became apparent To the new
management that a modern and up-to-t
date appraisal OF the company's assets
would make possible a far greater de-
gree OF efficiency OF operation. Here
they said TO themselves, we've bought
control of this nrcne-tsy ..a 70 knew
It's immensely valuable. but we don't
know just how valuable. These ap-
praisals OF real estate and securities
owned were mad a long time ago. IL
we have a complete inventory made OF
everything we've got we announces
the facts to the public, start a new set
of books, n begin u responsibility
to stockholders right there"
How inventory Mas Taken.
The most expert accountants n APP
praisers to be had were put ct the task.
Their labors lasted over eight mnnths
Their report and its publication by the
company marks an epoch In inance.
1t began by recommending an ad-
justment of the difference between the
appraised n book values by a charge
of $685., 0S9 against surplus. Book
values of securities held were reduced
10 market values, bad and doubtful ac-
counts were Charged Off," an allow
n ce Of 81, 1000, 900 was made for "depre-
ciation,' another Of $500, 900 for "re-
serve" n SO on, until the old sur
plus Of $18,867, 900 came down to So
| 1885, 900.
1t required courage, the publication
Of this statement to stockholders, say
Ing In effect: THE property OF your
company has been revalued: the sur
lead to believe, but SIS, 900, 000," but IL
was the truth, and President Vail ia
NOT riInch- ~"Accc-acy and publicity
he declared, was essential. THE
stakeholder has a right to know. Tie
! shares ee4 thss are scattered
from one end of the union to the other.
This is more than q private corpora
ton. 1t IL a great national enterprise.
The public is entitled to the facts"
The report was ordered published
forthwith. Financiers OF the old
school and speculators generally were
aghast. What would happen? Would
the bottom drop out OF Western Union
when the shareholders realized that
their property was worth s13, 600, 900
less than they had supposed2 But the
amazing thing happened. The stock
went up and stayed up. The public
had responded to this remarkable dis
play OF f~rankness and confidence: to
the no" motto. accuracy and Pub
Icity.'
The full significance of the action Of
the new board is stated corcisely by
Harper's Weekly In these words:
lis this policy OF publicity and OF
open-handed dealing with sharehoId-
ers and public the forerunner.of a sim
liar movement on the part brother big
corporations7 Certainly It Is to be
hoped that 1t Is. In the case OF these
big companies, dependent upon public
patronage and doing business under
public franchise, can there be any
question OF the right OF the uaonle 10
riIUW !.
That right is being recognized. 10
is recognized now I'm this epochai act
or the part OF the telephone and tele-
graph interests. It Is the dawn OF n
new era In cornnratfnn hnanca y