The Holly chieftain., 1910-12-09
new ERA IN FINANCE
ACCURACY AND PUBLICITY
PROVES TO 0E A POPULAR
MOTTO.

prempt RssesWss - Deid a1eve -
Presidsnt vsil-~Aeeuraey' RsdUe.
- Wsstsen URlea's Surplus ef3-
oooooo-"PvbiIelty" Rsstersd Con
6dsnes and ~ Stock Went Up.
Are the great Ananciers OF the
country beginning to SEQ . new light?
Time was. until recently In fact. vhsa
the men at the head Of the big cor
porstioos kept their business to
themselves" ~ far - the law would
allow. Capable men At the head of the
big concerns. long realized the weak
nsss OF their position. but what WAS
needed obviouSly, - In al great ~
forms. was an unmistakable occasion
and courageous man. The occasioa
arose n 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 tho
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 tho high esteem in
which the management Of the tele-
phone company IL 10 generally held,
great things were predicted a. re-
suit Of the absorption of Western
Union. By the press Of the country
tho 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 A.
sociates. the telegraph company was
bound soon to work itself into = po-
sition where It could offer the public
Tar more enicient service than 1t had
ever before been able to offer.
But very few months had elapsed
when 1t became apparent to the new
management that = modern and up
to-date appraisal Of the company's
assets would make possible q 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 vers
made long time ago. II We have
complete Inventory made Of every
thing wsve got We can announce tho
facts to tho public, start 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 tho
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 ad-
Justment Of the difference between
the appraised and book values by
charge Of 35.6s5.0ss against sur
plus. Book values of securities held
were reduced to market values, bad
and doubtful accounts were "chark-
ed on" an allowance of $4,000, 900
was made for depreciation" another
Of $6oo.o0o for reserve" and so on,
until the old surplus Of $1s,se7. 900
came down to $3.50, 900.
It required courage. the publication
OF this statement to stockholders, say
ing In effect: THE property Of
your company has been reyal-
ued: the surplus isn't nineteen mill.
Ions. ~ you have been led to be-
Heve, but five Millions" but It was
the truth. and President vail did not
finch. Accuracy ana publicity. he
declared. was essential. "The stock
holder has . right to know. The
shares Of this company are scatter
cd from one end Of the Union to the
other. This Is more than q private
corporation. It Is 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
ashast What would happen? Would
the bottom drop out Of Western
Union when the shareholders realiz-
ed that their property was worth
@1S,o0o,o00 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
frankness and confidence; to the new
motto. Accuracy and Publicity"
The full significance Of the action
1 -