The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1913-12-19
PROF. M. E. COOLEY WILL BE
CITY'S EXPERT IN FIGHT
AGAINST METERED PHONES


organization" he said. We are able
to have supplies made according "a
our own specifications, and delivered
when We want them. The union OF
many telephone companies has made
It possible to standardize most OF the
equipment, so that San Francisco and
Dayton were able to secure deliveries
OF big orders after the disasters
which overlook them. and any conf
pany may take advantage OF the situa-
ton. The Western Electric equip
ment is superior to any other. II is
being ordered by foreign cities--Paris,
for instance. and Constantinople."
He also denied that the American
Telephone d Telegraph Co. receives
80 per cent Of the long distance earn
ings OF the Michigan State.
THE A. T. a. T. handles the inter
state traffic out OF Detroit over It's
own lines" he said. THE Michigan
State handles the state traffic on its
own lines. The A. 7. & T. owns it's
own switchboard in this building, from
which II operates through lines to
Toledo and Chicago. Our only con-
nection II TO turn over the calls to
them. They pay us rent for the use
Of the space. Our long distance earn.
ings go to us, and theirs go to them.
The interstate business ia absolutely
apart from the intrastate business.
In fact, this IL the only way In which
the service could be operated. for we
could not make quick connection
with Chicago by picking up our lines
through the state,
The Postal campaign ia being
handled from New York by vice
president who Is sore at the success
OF Mr.. Walls schemes for night let
ter, day letter and cable letter. The
Postal said that these schemes were
impossible. but 1t had TO follow and
adopt them.
las q matter of fact, the Postal
and Western Union are joint owners
of a great many lines, and much al
Western Union"
One very good reason why the
Michigan State Telephone Co. wants
to install meters and thereby increase
its rates, Is that 1t had deficit at
the close OF 1912, and deficit 10 un-
welcome to the American Telephone
& Telegraph Co., which owns 80 per
cent OF the stock of the Michigan
State.
The company's statement for 1912
shows q gross income of 35,17S,395
and expenses OF $4,246,4SS; net in.
come of $947. 4S5, from which was paid
interest amounting to 3593,929, divi
dends on preferred stock Of $136,996
and on common stock o. $28S,331. In
addition, $4,000 was set aside to
begin benefit fund for employees and
$4,000 to start an insurance reserve
These payments left the company
$173.4lo on the wrong side OF the
| ledger
During 1912, the Michigan State
Telephone Co. acquired by purchase
I, the Home Telephone Co.. OF Detroit
thereby boosting its plant and PROF.
erty" account about $4,000, 900. 1t IL
evident, from the company's state
ment that the Home Telephone Co.'S
property was bought neither with
stocks or bonds, but with cash. and
that a large part OF this money Was
borrowed for the purpose, probably
from the parent company. the
| notes and accounts to pay" account
jumped from $319,422 In 1911 to 81,
S59,652, and the interest" account
from $516,O26 TO $593,929. Inasmuch
as the company has only $40 ,OOO0Ol
In Ave per cent bonds, on which II
must pay 100000 interest year, II
appears that $93,929 10 interest on
other debts, probably on the money
borrowed to pay for the Home Tele
phone Co.
The company claims that Its plant
and properties are worth &2S,67S.646
This item includes not only property
In Detroit, but In other parts OF the
state. The securities which repre-
sent this property amount to $lo,
| $4,000, as follows: First mortgage
bonds. paying Ave per cent interest
$9,7l5,OOO Michigan Telephone Cos
IS, payable 1917, $286.000: preferred
stock, $2.286,000. drawing Six pei
cent: common stock issued 20, 5000
on which six per cent dividends are
being paid.
The American Telephone & Tele
graph Co., which owns 80 per cent
of the stock, receives six per cent
dividends on that amount. In add
ton. it receives AZ per cent OF the
gross earnings, amounting In 1912, tc
$233.027, for certain patent rights, and
other items, which It controls. Ar
thur Won Schlegell, general manager
OF the Michigan State company. says
that this payment IL justifiable, and
that II means . big saving to the com
pany.
The American Telephone & Tele
graph Co., which practically controls
the telephone business as far ives,
as Denver, and owns the Western
| Union Telegraph Co.. and the West
ern Electric Co., manufacturers OF
electrical fixtures. has capital stock
Of 1894, 806.375, and bonds amounting
to over 500 10000 Its ofices are
| In New York. The Michigan State
Telephone Co. 10 run In conjunction
with the Central Union and two OF
three other companies, from Chicago
The subsidiary companies are very
close to the parent company. The
American Telephone & Telegraph Co
has had experts in Detroit, studying
the service problem, and II 10 on
their figures. according to Mr.. vor
Schlegell. that the company's metered
service tariffs are based.
Lawton T. Hemans, chairman OF the
state railroad commission, has an
nounced that public hearings will be
held In Detroit ~ soon az the city
signifies its readiness. The commits
sion, he says. will employ experts OF
Its own to look into the situation.
\ Frederick r. Austin, editor Of the
American Legal News, has written
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