The Detroit times., 1912-07-12
Merger Forced on BOM
COMPANIES, says Jackson

The upbuilding OF the Home Tele-
phone Co was an uphill proposition,
said w. A Jackson, OF the Home
Telephone Co. OF Michigan, today
1T required the covering Of the ELI
tire city with plant. which, by rea-
son OF the investment already made
and to he made, and of other factors
Of difference. could not readily be
made profitable at the low rates
charged by the Home company Tele-
phone competition. under present cor
ditions of the law and OF the pubic
desire for universal service. has been
made 10 a large extent. impractlCablc
and impossible, by recent turns OF
events. Like the railroads. telephone
companies are now subject TO the con
troll OF the interstate commerce com
mission and the state railroad com
mission, and constitute regulated!
industry. Under these conditions
competition must give way TO resula
ton. III this respect. il is believed
by all interests that IL is for the bene-
1T OF the pubiic-at.large that the
change come. The investors in the
Home company have received no prof
it's, and are accepting a very large
loss in maEng the change, but there
is no qUestoin that il will prove tie
best solution OF the problem in the
long run"
After five years of competition, the
latter ones bringing the Independent
properties nearer and nearer success,
continued President Jackson, "the op-
orators of both the Michigan state
and the Independent properties were
confronted by set of conditions vast.
ly different from those under which
competition was initiated large
additional investment for the extern
son Of the duplicate plant on the part
OF the Home company was necessary,
The Michigan State company was
also seeing the limit OF its facilities
being rapidly reached. and heavy adj
ditional investments In underground
conduits. cable and pole facilities and
exchange buildings were rapidly pres
sing for consideration
A change in the states system OF
taxation, imposing much heavier bur.
dens tor tax purposes than We're for
merly imposed. has entailed heavier
operating costs and caused managers
OF properties To think twice before in
dulgng in further destructive COM
petition Increased construction costs
in Detroit. growing out of the promul-
cation of new rules for Increased pub
lie safety and municipal convenience,
coupled with the enhanced prices of
labor and materials have also con.
tributed new and unexpected factors
TO the pre- which managers oi
telephone Tylerties are called upon
TO solve
As climax the new law enforcing
the physical connection OF competing
plants where such connection Is or
dered by the state railroad commits
sion as incident % the ptlS,c conven
ienca or necessity, makes competition
under the old terms practically i'm.
possible, and merger. under the pub
lie regulation provided by the law The
only feasible course 10 be taken, 10
conserve the capital involved, and 70
prevent further waste by destructive
competitive methods.
Luckily. there is no likelihood OF
injury to the public interests result.
ing from this merger. The one com
pany needs the facilities which the
other has. and by the addition of the
same can perfect its service to a point
surpassed by none in the country"