Arizona republican., 1913-02-12

holders of Rocky Mountain Bel shares. (which they exchanged tol Mountain State5 stock), and also tC those who have invested in our shares since lh1 merger was affected.
 There was outstanding, December 31 1911, as shown by my last annual re- port. 0.364 .30O.O0 of Mountain States sto k Though the average of outstand- ing capital stock for the year was $f5. 96O S50.00. For payment of dividends duding 1911 there was available $1,S67, 2"372. against an actual dividend pay ment of $1,022, ,59845, leaving for 1911 $S4I,G9J.27 for surplus and reserves.
 4 will be noted that December 3l 1912 there was outstanding $26,994. 100000 in stock. representing an in crease of s6. c29, 90U.00 from figures in my last annual report ( f this increase t4.3JS.7O0.00 was issued in December 1912 with dividendl obligations against it commencing January 1, 1913.
 The average capital stock outstand ing during the year 1912 was $22,739, 354.00 Turing that year there was available S2.5l3.37O.77 for payment o! dividend obligations which reached the actual rmcunt of s1.587. .334.00. leaving for 1q1Z a baIaace of S926.03e.77 to re- serves and surplus.
 Ili tHe report of Tie Mountain States company, as of December 31. 1911, our statement showed payments on ac count of capital stock subscriptions am bunting to more than 1,350,000.00 he StllVS for which wee not to be issued and deivered until January 1912. The Mountain States System re- pet for 1912, coming at a time when TO such itc1 of cash subscriptions to capital sfOcl appears on our books, our cash and CepC Sits neces sarilH SioT a large reduction, amounting to more than $75O.000O0.
 Our real estate holdings show an in- crease during 1912 nearly s500.000 00 our telephone plant. practically s4,25o. 0O0.0, our supplies. furniture and tools more than s35OO0O.00, and our stocks and bonds in connecting companies from which we derive business, almost S1000 100000
 With the growth of the company. anG pldIlS uHueE NdN lO COllllIlue lllC DOil cy of diffusion to which I have abov@ referred our bills payable show an in. crease of something more than s225, 000.00. Accrued liabilities not due some S65O.00OOO. includes dividend. payable January 15. 1913, amounting ( approximately s4OO.O0O.GO. There was ; transfer of s175.000.00 from surplus t' the employees benefit fund.
 It has never been my thought to in sist upon a large surplus. which migh readily have been accumulated had m, | invariablc policy not been to keep th, i cOmpany's rates at the lowest possible l level commensurate with good service 1 but an analysis of the annual report of The Colorado Telephone conpan. and the Mountain States cOmpan | (sinCa it's inception) will show that tn 1 policy of carrying to reserves an ade 1 quate sum for the ample protection O
 stockholders has been eminently satis 1 factory. and has worked out extremei 1 adVantageously. Any variations in tn surplus account from year to year wi be found to be represented in our re 1 placement reserves. our surplus an reserves have now reached S3,996, ,943 C. | A comparison of our financial opera 1 tion between the years 1912 and 1911 manifestIy difficult, if not almost i'm possible. without entering into grea detail. The statement for the year 19l was made up by combining the indi vidual earnings of the three merge companies prior to their consolidation and adding to this total the actu; gross earnings of The Mountain State
 company for the period of it's existenC
 in 1911. With the rapid growth of ti
 entire system. during 1912, andl the a:
 cOmpanying necessary increase in u amount of capital stock outstandir
 through issue on account of enlarge
 ments, it is difficult to arrive at . statement showing gross earnings f, twelve months, in comparison with t.
 tai capital stock issued, unless arb trarily the amount of stock outstandfr