Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1919-03-10
BELL SENDS $4,000
INTO WAR SERVICE
President Vail Advocates Gov
ernment Control. of Wire
Monopoly in His Report

The fundamental soundness of the
Bell system, the competent way it
has met the requirements of the
war, its fair and open way of deal
ing with the problems of govern
mental control, and its clear under
standing of the responsibilities of
the future, are set forth by Theo-
dore n. Vail in the report of the
American Telephone and Telegraph
Company.
The year 1918 has been from ev-
cry standpoint the most strenuous
and difficult year in the whole his
tory of the telephone, says Mr.. Vail.
1t has been impossible TO maintain
standards and difficult to meet the
increasing demands for service,
greatly augmented at all centers
where war industries and activities
concentrated. About Ia, 900 employees
of the telephone system entered mil
itary service. Over twenty per cent.
of the expert staff were taken over
by the government for special or ac-
tive war service.
OF particular interest is q letter
to Mr.. Vail from the Secretary of
War, appreciative OF the splendid
spirit of cooperation" of the Bell
engineers, which was indispensable
in the development of the airplane
wireless telephone set and other i'm
portant apparatus used in the war.
Facts About the Bell System
At the end of the year there were
1O,992,325 telephones connected
with the Bell system, which owned
10000 and connected with about
3,SOO,000 owned by connecting COM
panies and rural associations.
The wire mileage owned by the
Bell companies was 23, ,281, $50 miles,
"a per cent. copper and 60 per cent.
underground. The next amount add
ed to plant and real estate was $77,-
922,631. The total provision for
depreciation of plant during the
year was $54,O0O,0OO.
The capital obligations of the Bell
system outstanding in the hands of
the public at the close of the year
were 1891, ,074,264, of which the out
standing obligations of the American
Telephone and Telegraph Company
represent S676,2S3,362 and those of
the associated companies. $314,790,-
9O2. The telephone plants stand on
the books of the companies at ST.
142,S15,341, and appraisals by pub
lie authorities indicate a greater ac-
tual value. The surplus and reserve
aggregate $340, 100000, an increase
of over $36 100000.
In six years the expenditures from
employees benefit funds have
amounted to $10,534,594.
The next earnings of the Ameri-
can Telephone and Telegraph Com
pany for the year were $54,293,0 ,016.
The interest charges were $10,391,-
694, and the dividends at the regu-
lar rate of eight per cent. per an
mum were $35,229,69S. OF the re-
sulting balance $5,000,o00 were ap-
propriated for contingencies and $3,-
671,622 added to surplus.
The number of stockholders in
creased over $4,000 during 1918, and
now exceeds 10000, the majority
being women. The average holding
is thirty-nine shares.
Government Control
The terms of the contract with
the government are presented for
the information of the stockholders.
The provisions include emergency
compensation. efficient operation,
full provision for maintenance,
depreciation and obsolescence, the
investment of uneXpended balances
in the plant. continuance of en-
ployes' pensions, disability and
utdLH D0H0lllS, anu Oh COnLTaCIS WITH
the associated companies.
These provisions are for the pro-
lection of the property, the service
and the art. The security holders
are assured of the payment of in
terest and dividends on existing Sc
curities and securities hereafter au-
thorized, and compensation by the
Postmaster General for such extern
sions as he may require to meet
abnormal conditions.
Combination and Regulation
Mr.. Vail says that it would be ex-
tremely unfortunate if, with q very
pronounced public sentiment in IA
vor of it, wire system with nation
wide, universal, comprehensive
service and complete utilization of
all the facilities cannot be evolved
from the existing conditions.
1t seems paradoxical that the in
depreciation and application of ex-
listing laws against restraint of trade
should be an obstacle in the way.
There is little doubt, he says. re-
naming in the minds of the public,
but that regulated monopoly is bet
ter than unregulated government
ownership, and there is no longer
any extensive conviction that there
can be effective competition in the
electric transmission of intelligence
Changes in the existing laws con-
cerning control and regulation,
competition and combination are
shown to be necessary, and Mr.. Vail
cloYes with a few basic principles
upon which such changes should be
Quilt. The conclusion is that SIM
liar utilities, in territories economi-
cally determined, should be COM
bined; should have an operating or
ganization shown to be efficient and
economical; and with their admn-
stration there should be somehow
combined by legislation, the power
freed as far as possible from po-
litical and class influence, and sub
ject to reasonable review. ito equili-
brate capital charges, operating