The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-02-17
WESTERN UNION CAN
BUY BACK CONTROL
American Telephone Company
Will Sell Holdings to
Stockholders.
MEANS 100000 LOSS
Buyers ut SO Will Virtually
Get Present Of 81 or
More a Share.


An important step In fuidlmcnt Of the
agreement with the Government last De-
cember to bring about the voluntary dis
solution OF the union between the Ameri-
can Telephone and Telegraph Company
and the. Western Union Ii about to be
taken. Western Union stockholders will
be offered the 32e.s67.20o stock OF their
company held by the telephone company.
A syndicate to underwrite the Offering
Is to be formed by Kuhn. Loeb 4 Co.
Early announcement OF the Offering is
expected. The price. II Is understood.
figures Of GO to the stockholders and 81
for any stock that Is taken BY the under
writer's are those generally heard In the
financial district
II Is authoritatively learned that tile
dividend rate on the stock Of the Western
Union will be raised from to 4 per cent.
This action. IL Is expected. Will bu taken
we'll before the end OF the year. 1t 10
confidently asserted In influential quar-
tiers that the rate Will be. further IN
creased TO g per cent within reasonable
time.
The stock OF the Western Union ad-
vanced sharply yesterday on rumorD OF
the forthcoming dividend rate Increase
and the offering Of the stock to the
stockholders. The closing price OF 6e%
was an advance Of IN points on the day.
II the stock is offered 10 the stockholders
at 63 a right to subscribe to 80 per cent.
OF their holdings. worth from 81 to &l.25,
vii! accrue 10 them at the present price OF
the stock.
II was said yesterday that the tele-
phone company had taken hold OF the
Western Union In 1909 as a "sen!le, de-
crepi. old man and had reirearnated Il
through the magic of ef'icient manage.
ment In It's present strength as a robust
and vigorous boy The company has
been pu. into strong physical and oper-
at!ns condition through the turning back
OF profits into the improvements and ad-
ditons TO property.
President Vail recently told what the
American Telephone management had
done In rehab.litating the Western Union.
showing that in the three years OF Its
operation ended October 81. 1913. gross
revenues had increased s3s.0o0.o00. or 40
per cent. The amount paid from earnings
for improvements had been increased
IS. 2oO, 900. or 81 per cent over the three
year period before the telephone company
took control.
The Western Union Is now In excellent
condition and has <.000.oO0 cash and
ca sh assets now on hand. according to
high authority yesterday. Its surplus on
June 80. as shown In the annual report.
was 39.532.626.
1t is understood that the Department Of
Justice has tacitly approved the plan TO
offer the stock to Western Union stock.
holders for subscription.
Financial experts Say that an offering
Of the stock to the company's own stock
holders Is the most thorough method OF
bringing about n bonahde ending Of the
dominance OF the American Telephone
Company.
The Western Union stock that In TO be
sold Is held free and unpledged In the
treasury of the telephone company. There
will therefore be no difficulty In releasing
Il for sale. The telephone company. how
ever. sold In 1910, sstensibly TO pay for
the Western Union stock II bought In 1909.
SOS. 100000 OF It's per cent collateral
trust bonds.
The question WAS raised in Wall Street
yesterday whether this amount OF the COL
lateral trust bonds would be paid of on
the ground that the stock for which the
debt had been created had been resold.
II was learned that the company Is not
considering reduction Of this bond Issue
as result OF the sale. officials OF the
company said last night that the method
OF using the proceeds OF the Western
Union stock sale had not yet been decided.
The. sale OF the stock will represent a
loss 20 the American Telephone and Tele-
graph Company on the transaction Of
about 81, 900. 900, II II gets 81 for the stock
In the present sale. The stock cost II
about 75.
President Vail said BY telephone from
Boston last night that he felt that the
arrangement entered into FOR the sale OF
the stock was one that merited approval.
"The Western Union company Is In bet
ter condition now than It was when our
company took hold OF II. II has been put
into splendid working condition and all
Indications are that under It's individual
, management. with the organization II now
has, Il should continue to strengthen"