The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-01-21
WESTERN UNION NOT
MIXED, SAYS VAIL
PrOfitcd by Control Of Amcri-
can Telephone and Tcle-
graph, He Asserts.
SYSTEM VASTLY BETTER
Patient Stockholders to Reap
Benefits Of Recent Sur
plus Spending.

Theodore y. Vail. president Of the
American Telephone and Telegraph Com
pany yesterday answered the charges made
against the telephone company In connec-
tion with the American Telephone West
ern Union dissolution by Representative
Lewis OF Maryla to the effect that the
telephone company had taken all the
cream from its former subsidiary. MIR.
Vail asserted that the telegraph company
had profted by tho cooperation. He added
that unless conditions changed greatly FOR
the worse shareholders of the West
ern Union are on the eve of getting a
return for their patient waiting and that
their rewards should he increasing and
continuous.
81 cannot believe that Mr. Lewis made
or repeated any such statement" Mr..
Vail said. at has nothing to Ito for ar
against Government ownership: II is on
a par with such statements as have been
made that the Government intended buy
ing the telephone lines to destroy the telc-
graph properties. in which mono but few
timid shareholders took any credcncc. and
which, we believe. would not be supported
BY the Administration"
When the American Telephone and Tele-
the Western Union the telegraph com
pany, according to Mr.. Vail. had passed
through strenuous times, its earnings had
been impaired, It's operating force had
been demoralized and its dividends re-
duced. In the preceding fifteen years its
capitalization had been increased $780,
600, 900 without increase in the net reve-
nue.. While 1t was found that the COM
pany's earnings had been impaired, ne
said, Its outstanding capital was well rep
resented by property. which. however. was
not in az good condition as n should be.
II was decided that the per cent. divi-
dend could be continued and largely
increased amount put into Improvements.
As result the showing for the three
years ended October 81. 1913. contrasted
with the three years ended June 80. 1910.
follows:
Gross cable and land line revenue,
S125.lSO, 900. an increase of S3S.S0j.OOO.
or As per cent wages paid. not includ-
ing cable maintenance. construction or
reconstruction wages. s4S.OoO.OO0. an In
crease Of SIC. 900. or over so per cent.
amount set aside out OF earnings for main
tenance. improvement. renovation. con-
struction, &c. s22.624 200. an increase of
sS.200.000, or 81 per cent. There were
also other items rejecting 70 the credit
Of the MANAGEMENT of the American Tele-
phone and Telegraph Company. Mr.. Vail
said.
1t 10 estimated that the abnormal ex-
penditures will be completed in from two
and q half to three wears. when the good
going condition OF the company can be
maintained by normal expenditures, and
Il In expected that Sl.000.O00 a year can
BE- saved in operation. Mr.. Vail states
that the financial condition OF the West
en Union was never better. and then
adds:
"Whatever decrease there has been In
the Western Union revenue from private
line leases has come from the discon-
tinuance OF leasing lines to those who
put them to questionable uses. and to the
fact that in case OF a general Interrupt
tion the Western Union WAS compelled
when such lines were restored to use
them for It's commercial business and thus
deprive tho lessees Of their use for
time.
THE results have demonstrated that
there was field for them. that with
equally available facilities for both the
telephone and telegraph are not competi-
tive, but each has it's own field. IL the
telephone and telegraph facilities are
equally available the public will use that
which il best adapted for the purpose for
which IL In used In care OF uneQually
available facilities II will use one or the
ether as an alternative"