The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1913-12-20
Points Out That Plant Bought In
1903 for S4.1O0.000 Has Now
Outstanding Securities of
Nearly s20.000,0O0
COUNCIL COMMITTEE
HOLDS FIRST MEETING
Begins Arrangement for Meter
ed Service Probe-F. +. In
gram Analyses Situation

ten letter 70 Mayor Marx, calling
attention TO the evident ract that the
present Michigan State Telephone Co
Is paying dividends on $4,000 GOO Of
water. which Is one good reason why
the company Is anxious rs boost It's
profits BY installing met cred service
Mr.. Moore, IN his letter. intimates
that the proper kind OF an investtga.
ion might disclose the fact that while
he company has sold approximate
S6, 800 600 worth OF bonds ostensi bis
% pay for extensions and hetteFment
af the service the principal purpose
was TO enable the company 10 pay
dividends on It's watered stock
Mayor Marx will turn the letter over
10 the special council committee for
The letter follows:
Dear Mr.. Mayor:
Apropos OF the telephone con
troversy, | take the liberty OF
calling your attention TO the fol.
lowing facts
On or about Nov. 4. 1903, Nor.
man W. Harris, OF Chicago. pur.
chased the entire Michigan tele-
phone plant for s4,lQ0,000 at a
foreclosure sale, made by the fed.
eral court in Detroit Between
that time and Feb. /, 1904, the
present Michigan State Tele-
phone Co. was organized and paid
for this property 100000 in
preferred stock, 100000 in com.
mon stock, and s4,100Oe0 Ia
bonds
The total authorized bond issue
was $4,000 900 and I have been
told that the balance or nearly
all the balance of these bonds
has been sold by the company. SO
that its liability at the present
time in stock and bonds reaches
approximately s20,000.000.
II Is also quite eevident from
this that while approximately So.
100000 has been nominally sold
TO pay for extensions and better
ments, the fact could probably be
brought out that the principal
purpose was TO enable the com
pany 10 pay dividends on this
$i0.000000 of common and pre-
ferred stock all OF which Is ab-
solutely water.
Hoping that this information
may be OF use. remain,
Yours very truly.
GEORGE WILLIAM MOORE.
The special committee, OF which
Aid Lodge is chairman met with the
mayor, the corporation counsel and
other interested city officials. Friday
afternoon, In the executive Office, to
make preliminary arrangements for
the telephone Investigation which IS
TO follow to determine If there is a
necessity. as the telephone company
alleges, for metered service.
The mayor has requested the two
telephone operators In the city hall
TO check up the number OF outgoing
calls per day This will be included
u the data which the mayor will turn
over TO the committee, showing what
the cost would be according 70 the
proposed new schedule TO maintain
the telephone service In the city hall.
Charter Commissioner +. f. Ingram
gave out the following statement. Fri.
DAY, on the Michigan Telephone 90 5
proposal to install metered service.
There are always three governing
factors In all business UNDERTAKINGS.
wages. capital, prices.
The going wage must be paid or
lnefnciency results.
The going interest for earnings 10
capital must be paid or capital with.
draws
In competitive industry going
prices must be met, therefore. neither
capital or labor can reward them.
selves at the expense OF prices Ef
nciency must. therefore, exist in the
business sufficient 10 pay both labor
and capital their average earnings or
he business falls For 10 raise prices
would stop business A monopoly like
the telephone owned by private CAP
tai. will naturally seek to reward us
capital Tin which its owners are alone
Interested at the expense OF both
abor and prices, or. in other words al
The expense OF It's employees and the
public. and being without competition
IAN do SO unless restrained bv Law
Investors in the telephone securi
les became so knowing The proper
les OF the old Peoples. Detroit Home
and other telephone eompanies
bought by the Bell at millions In cos,
,ould not be all available as honee'
capital: much OF Il was only
unk or duplication OF antiquated and
equipment that in com.
,etitive business would be charged m
,rofit and loss Such investors should
lot be permitted 10 recoup themselves
L the expense OF the public by Ok.
'rbitant prices or OF labor by made
Inate wages
Since the competition cannot reia.
ate prices, the law must aud the
mount OF water IN the stock and the
OF capital by the cor
'oration's managers should ,b, ascer.
aimed and eliminated.
Measured service may tt "a fl
nethod OF assessing charges for scr.
ice rendered. but It's installation
hpnld not be permitted as AN ex.
use for raising the charges for ser
ice.
Nv new tuoittt W De voted upon
FEB. 10 has a provision fpage 500
hat gives the city In accordance with
he home rule chapter OF the new
the right 10. regulate the
Ieryice OF and charges made by any
'n5lic service corporation This In.
dudes the telephone company
II Is very important that Anal &C.
Ton on the telephone compRny's pro.
loanI h. deferred until after Fan 10