Bridgeton pioneer., 1914-01-08

L
In 1909 just after the American Tele-
phone and Telegraph company absorb
ed the Western Union Telegraph COM
pany, from which alliance it now Of
fers to divorce itself, President Vail of
the latter company said:
| There is much to gain by the joint
| construction and maintenance of plant
| and by its common use to the greatest
| possible. extent. But the greatest ad-
vantage, would follow the placing OF
millions Of telephone subscribers In
close and reliable connection with the,
receiving and dispatching of the tele-
graph Offices"
1 The vigorous fight Of the Postal Tele-
graph company on this very connections
Of the telephone and the telegraph
service OF the American company and
the Western Union was the first big
blow at the combination Of the two.
The telephone company instructed it's
operators, it was alleged, to switch all,
subscribers wishing to send telegram
on to the wires and o4aces Of the West.
ern Union.
Then ths. Postal alleged discrimina.
ton against the telephone company
and brought complaints in several
states.
Its. complaint in New York was sus-
tanned by the public service commits
sion, and the telephone company dis
continued the use Of the code word and.
instructed its operators to make sub
scribers state their preference Of tele-
graph companies.
History of tha American Company.
The American company dates from
1885, incorporated in New York, and
until 1900 owning and operating only
the long distance lines of the American
Bell Telephone company, In that year.
the local lines. owned by local compa-
MES of the American Bell, which were
scattered throughout the United States
and Canada, bot did not comprise all
the local companies, were taken over
by the American Telephone and Tele-
graph.
One of the points of attack by the
Postal company was overcapitalizatfon
by which higher rates for service were
necessitated. s's
The system Of telephone companies
thus comprised grew by the organizas
ton of new companies and the alb
sorption of others until the cent1al
company now owns, either in whole
or in part, local and state companies
In every state of the Union and some
In Canada. The central company per-
forms central administration for all
the companies and furnishes tele-
phones, for which it receives from the
subsidiaries Az per cent of their gross
yearly receipts.
The territory Of the United States Is
divided into eight parts-the New Eng
land, eastern. southern. central, north
western, southwestern, mountain and
Pacific The total wire exchange and
toll service Is 14,610,S13 miles. The
number of exchange stations is 5,2OO,-
600 and the stations of Independents
connected with the system 2,620oOO.
The number Of Independents connected
with the system is 25,O0O.
The company, besides its telephone
| and telegraph subsidiaries, owns the
Western Electric company, which Is
practically the manufacturing plant for
| the system.
The control Of the Western Union
was gained in the purchase Of about
| $20.OO0,O00 to $25.OO0OOO par value
Of the 500, 1877 900 stock of the Western
| Union. In 1911 the American Tele-
| phones ownership of Western Union
stock amounted to $29, 1857 200. This
was acquired, it is understood, at
about $85 share.
The property had been run down
sadly. and its earnings in the seven
years preceding its purchase had
steadily declined until they approach
ed deficit at the time the company
was taken into the telephone system.
Scrip instead of cash was being paid
in dividends in 1908.
Western Union Earnings Increased.
The purchase by the American Tele-
phone company was a distinct advan-
tage to it and its earnings have stead
lily increased from a gross of $50
600 in 1908 to $41O00.000 in 1912,
with large surpluses yearly, though
dividends have been reduced from
to per cent
The attitude of the department Of
justice toward the telephone company
was first actually revealed in the fl
ing of suit last July at Portland.
Ore, aimed at the company operating
in Oregon, Washington, Montana and
Idaho. 1t was an antitrust suit and
alleged that the subsidiary companies
had been Illegally acquired.
All financial experts who have ex-
amined the American properties sag
that the $4,000 stockholders, of whom
majority are women, have nothing
to fear financially in the voluntary
dissolution.
The movement of the stock since il
became so much a focus of govern
ment attention, both for prospective
dissolution and for government own
ership, has been nervous. The highest
The stock has been in recent yeara was
fQR fr, 1000