The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1910-07-20
MICHIGAN PHONE
co. IS ABSORBED
American Telephone & Telegraph
Co. To Exchange Stock, Four
Shares for Five.

CHICAGO, July 20.-Control of the
Michigan State Telephone Co. is about
to pass to the American Telephone Il
Telegraph Co.. which absorbed the
Western Union Telegraph Co. some
time ago. The American company
now controls practically all the other
Bell telephone lines In the United
States.
Announcement was made yesterday
that the holders OF a maioritw of the
common stock OF the Michigan com
pany had agreed 10 exchange their
holdings for .he stock OF American
Telephone on the basis OF five shares
OF the Michigan stock for four shares
OF the stock Of the big company. All
holders of common stock in the Mich.
igan company will have the privilege
of exchanging on the same basis.
The Harris Trust and Savings bank,
macy of whose customers hold stock
in the Michigan company, has sent In a
letter advising the exchange OF stock.
N. w Harris Is chairman OF the board
of directors OF the telephone company,
and has been active in It's manage
ment since the reorganization.
Michigan State Telephone has out.
standing $500, 900 OF common stock,
on which II now pays dividends at
the rate Of Z per cent. Ii has also
$2,2S5,00 of 6 per cent preferred
stock and $S.666.000 of bonds. The
common stock is quoted in the local
market around LOG. giving to Ave
shares value of $3.50, as against 1929
as The value OF four shares OF Amer
lean Telephone at 1872 IA, the price
Of the stock in the local market to-
day.
In the matter of dividends the ex-
change Is not quite so even. Five
shares of Michigan Telephone now
draw $35 year in dividends, and four
shares OF American Telephone only
$32. There has been considerable COS
sip, however, OF an increase In the
American company's dividend rate.
The passing OF the Michigan State
Telephone Co. TO the control OF the
big holding company is the result of
a long series OF negotiations. The
Michigan Telephone Co, which pre-
coded the present corporation, default.
ed on its bond interest in 1902. The
physical property was bought in at
his associates In order to protect the
bondholders, the firm OF n. w. Harris
q Co. having placed the original bonds.
Then the Michigan State Telephone
Co. was forced 10 take over the old
company and its business and fran
chises and the old bondholders were
given the privilege OF taking the bonds
or preferred and common stocks OF
the new corporation. Nearly all OF
them did so, and they have realized Q
handsome profit on the transaction.
From a system embracing the use
of less than $4,000 instruments the
Michigan State Telephone Co. has
grown into system connecting with
nearly 10000 telephones, located IN
every section throughout the state.
N. c. Kingsbury, of the Harris Trust
is president OF the company.
The directors are: n. w. Harris,
Chicago; Isaac Sprague,
Boston; ID. w. Briggs, Boston; Dudley
E. Waters, Grand Rapids; Russell A.
Alger, Detroit; Henry Russell, Detroit;
William Judson, Grand Rapids: Philip
H. Mcmillan, Detroit; A, w. Harris,
Detroit; John T. Shaw, Detroit; Allen
b. Forbes, Boston; A. f. F. White, De,
troit; N. c. Kingsbury; B. w. Trafford
Detroit; Truman II. Newberry, Detroit
Walter |. Miner. secretary Of the
Michigan State Telephone Co. when
asked to confirm the story, said that
he knew nothing more than has ap.
peared in the dispatches from Chicago
The matter has not been brought be-
fore the directors of the company, he
said
"Of course there is nothing to pre-
vent the stockholders from selling out
their holdings to the American Tele
phone & Telegraph If they see At, but
we have no knowledge of any such