The pioneer express. [volume] (Pembina, Dakota [N.D.]) 1883-1928, 1910-12-09
new ERA
ACCURACY AND PuBLlcIrts
PROVES 70 BE a POPULAR
MOTTO.
Prompt Response 70 Bold Move o.
President vail-"Aecuracy" Reduo
Cd Western Unions Surplus 91ss
0,00o-"Publlcity" Restored Con.
fdencs and lie Stock Went Up.

\ porat1ons kept their business to
themselves" AZ 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 rel
forms, was an unmistakable occaspnl
and q courageous man. The occasions
arose In the purchase Of the Western
Union Telegraph company by the!
American Telephone and Telegraph
company. and the man appeared mi
Theodore N. Vail, President of the
purchasing corporation.
It was last December swhen 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 is so generally held,
great things were predicted as a re-
suit OK the absorption of Western
Union. By the press of the country
the "dea" was most favorably COM
mented on. 1t being widely pointed
out that under the direction Of such
men as Theodore N. Vail and his a.
soctates. the telegraph company was
bound soon to work itself into 3 no
sition where it could offer the public
far more efficient service than it had
ever before been able to offer.
But 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 new set of
books, and begin our responsibility
to stockholders right there"
How Inventory Was Taken.
Inc most expert accountants and
appraisers to be had were put at the
task. Their labors lasted over eight
months. Their report and it's publ
cation by the company marks an en-.
och in finance.
It began by recommending an ad.
justment Of the difference between
the appraised and book values by a
charge Of $5,595.0S9 against sur.
plus. Book values of securities held
were reduced to market values. bad
and doubtful accounts were "charg-
ed on" an allowance of $4,000. 900
was made for depreciation" another
OF 100000 for reserve" and SO on.
until the old surplus of $1s,867 900
came down to $5.136,O00.
1t 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 it was
the truth. and President Vail did not
finch. Accuracy ana publicity" he
declared, was essential. 1.-THE stock
holder has a right to know. Tie
shares Of this company are scatter.
ed from one end of the Union to the
other. This is more than a private
corporation. It is a great national
enterprise. The public is entitled 70
the facts"
The report was ordered published
forthwith. Financiers of the old
school and spectators generally were
aghast. What would happen! Would
the bottom drop out Of Western
Union when the shareholders realiz.
ed that their property was worth
$13.O00,000 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
Of the new board 10 stated concisely
by Harper's Weekly In these words:
lis this policy Of publicity and Of
open-handed dealing with sharehold.
ers and public the forerunner Of .
SeeAAAAssA A4ASy0AA03AS VQ SU0 V6II OF OC0s
or big corporationsf Certainly it il
to be hoped that, Il ID. In the case
OF these big companies. dependent
upon public patronage and doing bust
ness under public franchise, can
there be any question Of the right Of
the people to know?
THAT right IL being recognized.
1t is recognized now in this epochal
act on the part Of the telephone and
telegraph interests. It is the dawn
of new era in corporation finance"
, TJmeliness. ~
All measures Of reformation are a.
fective 70 exact proportion to their
timeliness; partial decay may be- cut
away and cleaned incipient error
corrected: but there u point &
which corruption can no moro Is
stayed. nor .vanderina racaIlad 4. n