Americus times-recorder. [volume] (Americus, Ga.) 1891-current, 1920-10-29
Municipal League, Presenting
Figures, Says Reduction Is Due
In Phone Rates In Georgia
Bulletin Shows How Two Concerns Pour Their
Cash Into Holding Concern Which Owns
Them Both Outright

pany was $21, 100000 on July 81,
1918. On December 81, 1919, this
stock had become $27, 100000, an in
crease of $6,100,000. The total cap
ital stock is owned by the American
Bell Telephane & Telegraph Com
pany.
SIN 1916 the Southern Bells re-
serve for depreciation was $3,857,-
/ 461. In 1919, three yearter later the
company had placed in its reserve
$6,860,405, an increase of $3,002,-
944. or more than $1,000,000 per an
mum. In addition the company had a
corporate Surplus unappropriated"
of $2,923,910. In other words, De-
cember 81, 1919, the company had in
its reserves and surplus $9,784,315,
after having paid its regular annual
dividends for years,
'The Southern Bell has paid divi-.
dends upon its stock since 1890. Since
1906 the dividends have been paid at
the rate of SO per annum. These di-
vidends go to the American Tele-
phane & Telegraph Co.
Where Money Goes.
"The Southern Bell also pays to
the American Telephone & Telegraph
Company 4 1-2@o of its gross tele-
phone receipts for the use of patents
owned by the American Telephone &
Telegraph Company, for telephones,
central administration, engineering
and other services. This 1920 is in
addition to the dividends which the
American Telephone & Telegraph
Company receives as the owner of the
stock of the Southern Bell. This
1-2%o, we estimate, amounts to
more than $360,423, ,000 per annum.
Added to the 6@6 dividend upon the
$21 100000 of stock, it amounts to
81 ,664,423 per annum.
'To pay the dividend upon the in
crease in capital stock of SIS, 1"0000
will require an additional expendi-
ture of $396,000.00 per annum.
''The recent increases authorized in
the capital stock of the Western Elec-
trio Company from 10000 shares to
100000, no par value expressed, and
of the American Telephone & Tele-
graph Company from $500,00O.00
to $3.50, 100000, and of the Southern
Bell Telephone from $21 100000 to
$27,500,000 naturally causes the
question to rise-did these increases
in capital stock have any connection
with the decision of the Supreme
Court of the United States exempting
stock dividends from the income tax?
'It will be noted that the lat in
creases in capital stock, if the rate
of dividend paid upon previous issues
is paid upon the increase in capital
stock, will require an additional eX-
penditure of $23, 1856, 900 per annum,
which sum must come from the pock-
cts of the public. To justify the in
creases, the companies should be
made to show that the new stock rep
resents not dividends or money earn
ed by excessive rates, but new capi-
tai actually paid into the company
by persons other than the public to
! meet an imperative demand for capi-
tai in addition to the huge surplus
and reserve already in the hands of
the Bell system.
Our Golden Egg.
| "Another increase in expenditure
must result from this-the $30,000,-
900 of 6%o preferred stock of the
| Western Electric was called for pay
ment on March 9, 1920, at $4,000
and dividends, as noted above. On
March 18th, 1920, three days later,
a new issue of $50,000,000 of cumu-
lative preferred stock at 10 was au-
thorized. Paying premium of $6,-
100000 in order to retire $30,000,-
900 of go stock, and voting three
days later to issue $50,000,000 of
the same class stock at 10 higher
rate, meaning an increase in expendi-
ture on the $30.000,000 retired Of
100000 per annum in addition to
the $6,000,00O premium paid, ap-
pears on the surface strange financ-
ing. This additional 100000 will
be, when preferred stock is issued
added to the additions set forth in
the preceding paragraph. It must
be remembered that practically all OF