The Thibodaux sentinel. (Thibodaux, La.) 1905-1912, 1910-12-10

| prompt Response to Bold move o
President vaiI.-"Accuracy" Reduc
ed Western Unions Surplus $f3,
coo, oo0.-"PubIicity" Restored Con
fidence and 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 unmistakable 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 m
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 IDEAL" 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 it had
ever before been able to offer.
But a very few months had elapsed
when it became apparent to the new
management that modern and up
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
how valuable. These appraisals of
real estate and securities owned were
made 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 its publ
cation by the company marks an ep-
och in finance.
1t began by recommending an adj
|ustment of the difference between
he appraised and book values by a
charge of $5,595.OSs against sur
plus. Book values Of securities held
we've reduced to market values, bad
Ind doubtful accounts were "charg-
I'd off," an allowance of $4,000, 600
vas made for depreciation" another
# 100000 for reserve" and SO on,
Until the old surplus OF $1s,867 900
anne down to $5,136,O0O.
1t required courage, the publication
i this statement to stockholders, say
ng in effect: "The property of
our company has been reval-
led: the surplus isn't nineteen mill
ons, as you have been led to be-
ieve, but five Millions" but it was
he truth, and President Vail did not
Inch. Accuracy ana publicity" he
eclared, was essential "The stock
lolder has a right to know. The
hares Of this company are scatter
d from one end Of the Union to the
ther. This is more than a private
orporation. 1t is a great national
Enterprise. The public is entitled to
be facts"
The report was ordered published
orthw1th. Financiers of the old
chool and spectators generally were
ghast. What would happen? Would
he bottom drop out of Western
jnlon when the shareholders realiz-
d that their property was worth
100000 less than they had sup
osed? But the amazing thing
The stock went I'D and
tayed up. The public had respond
d to this remarkable display of
rankness and confidence; to the new
aotto, Accuracy and Publicity
The full significance of the action
I the new board is stated concisely
y Harper's Weekly in these words:
Is this policy of publicity and of
pen-handed dealing with sharehold. !,
rs and public the forerunner of a
lmilar movement on the part of 9th. {
r big corporations? Certainly it is !
, be hoped that it is. In the case {
t these big companies, dependent |
pom public patronage and doing bust. {
ess under public franchise, can 6
1ere be any question of the right OF I
lie people to know? i
That right is being recognized.
is recognized now in this epochal 6
ct on the part of the telephone and t
elegraph interests 1t is the dawn 1
new era in corporation finance" /