The Meeker herald., 1911-03-18
TuRNI|NG on LIGHT
PREsioENT WALLS SOLD MOVE
Marks EPOCH IN FINANCE.
Accuracy" Reduced Western union's
Surplus ef3,ooo. ooo-"Publieity"
Inspired Such Confidence Thas
lts Stock Went Up.


Inspired Such Confidence Thas
lts Stock Went Up.
Are the great Ananciers Of the
country beginning to SEQ new lightf
Time was. until recently in fact. when
the mon at the head Of the big cor
porations kept their business to
themselves" ~ far - 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. ~ in all great re-
forms. was an unmistakable occasion
and = 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 in
Theodore N. Vail. President Of the
purchasing corporation.
II was last December whom 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 IL 70 generally held.
great things were predicted As q re-
suit Of the Absorption Of Western
Union. By the press Of the country
the deal" was most favorabiy COM
mented on, 1t being widely pointed
out that under the direction Of such
men ~ Theodore N. Vail and his a.
sociates. the telegraph company was
bound soon to work itself into q po-
sition where 1t could offer tho 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 tho company's
assets would make possible 4 far
greater degree Of smcisncy 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. II 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,
The most expert accountants and
appraisers to be had were put at the
task. Their labors lasted over eight
months. Their report and it, publ
cation By tho company marks an ep-
och In finance.
It began ~ feoonmending IN ~.
1ntmsnt u the difference bstvssn
the appraised and book values By
charge Of es.sss.oss against sur
plus. Book values Of securities held
were reduced to market values, bad
and doubtful accounts were "charx-
cd on" An allowance Of $1,000, 900
was made for depreciation" another
Of 100000 for reserve" and 30 on.
until the old surplus Of s1s,ss7, 900
came down to S5.136.000.
It required courage, the publication
OF this statement to stockholders, say
ing In eject: THE property Of
your company has been reyal-
ued: tho surplus isn't nineteen min.
ions. y you have been led to be-
lieve. but I'VE millions" but II was
the truth. and President Vail did not
finch. Accuracy and publicity" he
declared. was essential. THE stock
holder has . right to know. The
shares Of this company are scatter
ed from one end Of the Union to the
other. This Is more than q private
corporation. 1t IL Z great nationaI
enterprise. The public 10 entitled 70
the facts"
Tho report was ordered published
forthwith. Fiuanciers Of the old
school and spectators generally were
ashast. What would happen! Would
the bottom drop out Of Western
Union whom the shareholders realis-
ed that their property was worth
31s 100000 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 concfsely
by Harper's Weekly IA these words:
rs this policy Of publicity and Of
open-handed dealing with sharehold-
ers and public the forerunner of
similar movement on the part Of 9TH
er big corporations? Certainly It II
to be hoped that 1t is. 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 10 being recognised
1t 10 recognized now in this epochal
act ON the part Of the telephone and
telegraph interests. 1t 10 the dawn
OF new era In corporation finance"