Evening journal., 1913-08-27


carry on such scientific and expert /
mental research and inventions as 10
apparatus and methods as TO insure /
the highest standards. and 10 carry =
to reserve and depreciation such ,
amounts as will enable the company |
at any time to replace old plant and /
old methods with new plant and new /
methods as fast as they may be de-
veloped and found TO be to the adj
vantage of the service. We believe /
that in addition, such fair charges |
should be paid upon the investment /
in plant as will enable the company |
at any time to obtain money neces- !
sary to provide the plant required TO
meet the continuing demands OF the !
public; and I'm order that waste and /
duplication Of effort may be avoided |
and uniformity Of purpose and com
mon control be enforced, that there
should be a centralized general adj
Iministration in close communication
with aud having general authority
over the whole on matters common
to all or matters of general policy.
We believe that any surplus beyond
that necessary to equalize dividends
on fair basis should be used by the
company for the benefit OF the public
and should be inalienable for any
other purpose, and should be either
invested fl, ,revenue-earning plant un-
til necessary to substitute plant which
may become inadequate or obsolete,
or should be used 10 make the service
cheaper OF better.
We believe that under proper gov
lernmental control and regulation the
profits from promotion or operation
allowed to be distributed should not
| be so large as to warrant or tempt
complete duplication Of plant and or
ganization, with its duplication Of its
capital charges and its organization,
Operating, maintenance and deprecia-
tion expenses; and we do not believe
that utilities giving at fair rates an
leficient and sufficiently comprehen-
lsive universal service should be sub
lject to limited competition, not Civ
ing such service. Competition which
Ignores the obligation TO furnish a
lcomplete and comprehensive service
is not competition. 10 not for the bene-
At of the public in that II does not
reach the whole public interested.
II, therefore. complete duplication,
with its dual exchange connection and
dual bills for service. is a prerequisite
to complete competition. government
control and regulation cannot go hand
in hand with competition.
We believe that the record Of the
Bell System will be accepted by the
public as fully in accord with these
declarations. Consistent adherence TO
this policy has given the public of the
UNITED States the best. most compre-
hensive and cheapest telephone ser
vice in the world and made the Bell
standards the standards of all ma
tons.
To remove any possible excuse for
misapprehension on account of the
many misleading statements which
have been circulated as to the alleged
unnecessary and overcapitalization
and excessive charges of the Bell Sys-
TEN, the following statistics are given
! Except where stated, the figures are
for the Bell System; that is, the
American Telephone and Telegraph
I and its Associated Companies.
The entire Bell System on June 80
|, 1913. had outstanding in the hands
OF the public obligations q. e., notes,
open accounts, bonds and shares) 20
the par value of S776 100000
The book value Of the total tangible
assets, which IS considerably less than
their replacement value, amounted 10
$3.50, 600 000 Many appraisals of
property included in these assets have
been made, and most of them under
the direction of public authorities. In
no case has the value as Il stands on
the books failed TO be sustained, and
in most cases Il has been very largely
exceeded.
The total dividends and interest
paid during the year 1912 amounted
to only 81 per cent. on the average
Of its outstanding obligations, and 10
less than per cent. on the average
value of its assets.
The actual cash which has been
paid into the treasury of the Ameri-
can Telephone and Telegraph Com
pany on account of the capital obliga-
tions now outstanding amounts 10
s22. 100000 more than the par of such
outstanding obligations.
The Associated Companies collected
from the public and paid back in
taxes over S10,000,000 during the year
1872
The steadily increasing necessities
of the public not only for additional
but for new telephone service can
only be met by new construction, in
yolving capital outlay To meet these
demands during the six and one-half
years from 1907 to June. 1918, inclu-
sive, the. increase in telephone plant
was as follows: Toll line wire in
creased from 146O.000 miles to 2,242,-
600 miles; exchange wire increased
from 100000 miles to 100000;
the number of exchange stations in
creased from 2.730,0O0 to 100000 (:
the number of stations of independent
, companies connected with the Bell
System increased from 343.000 to p
100000. The number of independent
. companies connected with the Bell
System is about 25,000 The number
Of employees in the Bell System, not
| including the employees of connected
companies. on December 81, 1912. was
! 141, 900.
! During this same period the num-
Der of shareholders of the American
= Telephone and Telegraph Company
not including either the associated OF
. connected companies, increased from
= 1900 to about $4,000. About $4,000
shareholders hold less than 10C
I shares each; 6,500 shareholders hold
from 100 to 1000 shares each; 347
: shareholders hold from 1000 TO 5000
, shares each, while there are only 1e
> shareholders of 5000 shares or over
( in their own right. A majority oi
= the shareholders are women.
, American Telephone and Telegraph Co
THE0. n. VAIL, Presldent-AdY.
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