Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1911-04-03
TELEPHONE PROFITS.
Local connnittee Investigates Sioux
City and Omaha Companies.

Local COMMITTEES investigates sioux
City and Omaha Companies.
ITO the officers and stockholders OF
the Merchants, Mechanics and Far
NETS Telephone Co.: We your COM
mittee appointed to investigate the
earnings Of the Sioux City Telephone
Company, and to ASCERTAIN II the tele-
phone business Is q; desirable business
from an investors standpoint. beg to
report as follows:
1--WE found at Sioux City an auto
matte telephone plant that has been
in operation about I'VE years and has
grown from 5000 to $500 telephones,
that they added to their number 736
telephones last, year and now have
more than two phones to the Bell
Company's ore.
I'VE were given. their annual report
made by the auditing firm Of Laurence
A. Jones & Co., Or Chicago, which
shows that their Income for 1910 was
s127607, and Incorporating and main
tenance expense 355.T77, or $7.O5 per
phone, leaving a net earning of ST.
$50 for the year. We also found that
they have createdsa Surplus or reserve
fund of s73,92S. u III cash, and that they
have added s25zsAeBssto the value of
their plant Ssoutas9a sthe earnings and
their stock. with ~ par, value of $40
per share and sold fofss320 per share
five years ago now has a market value
of $50 per share and we found people
on the outside who were trying to buy
this stock at the, pxamium Of $50 per
cent and could not find any for sale.
The company paid a dividend of 50 per
share last year, or Is per cent on the
par value of the stock. We called upon
many business firms and found them
unanimous in their preference for the
autOm attic telephone. The company is
popular. and every one seemed well
satisfied.
we visited Omaha, where we found
a company that has been placed at
great disadvantage from the time Of it's
organization. We We're told that the
stock Of the company is all water,
having been given with the bonds as
bonus. And that some of the bonds
were sold as low as so cents on the
dollar, and even with this great amount
Of water In the securitiesS thatsa large
per cent Of the money received for the
bonds was not used in the construction
Of that plant. We were told or two
items, amounting to ss50.0O0. that was
spent elsewhere. We do not believe
that the present condition of the Oma-
ha company is due to any fault Of
the telephone business or the automat-
ic apparatus, but due wholly to the
methods pursued by the promoters of
that company.
I'm conclusion we find that the tele-
phone business Is a good. permanent,
business and when honestly financed,
practically built and managed, yields a
good return on the money invested. al
SO that the automatic telephone equip
ment Is satisfactory to both the COM
pany and the subscribers.
WARREN NICHOLS,
civilian SHIPTON,
FRANKLIN BUTLER,
WILLIAM HANDORF, ~
Committee"
Mr.. ~ D. Smith, secretary of the
Merchants. Mechanics and Farmers
Telephone Company, adds that the
committee ascertained that the Omaha
company was netting $4,000 per month
under the management Of receiver.
and was evidently coveted by the Bell
people. since q bill was pending in the
Nebraska legislature which would per-
NIT them to purchase the independent
company.