The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-01
NEW TELEPHONE BOND
ISSUE OVERSUBSCRIBED
S25, 900, 900 of Bell Co. of Pa.
Taken in Three Hours.

The So, 900. 900 of twenty-five year I
per cent, first and refunding mortgage
=--zding fund gold bonds Of the Bell
Telephone Company Of Pennsylvania.
offered yesterday for subscription by
syndicate headed by j. p. Morgan &
Co.. was disposed of within three hours.
and at l o'clock the subscription books
for this issue were closed and it was
announced that it had been oversub-
scribed.
The bonds were offered to subscribers
at 80 and interest. to yield about 7.45
per cent They are redeemable at the
company's option as whole or in part
on ATTY interest date, after sixty days
notice. at 1071s and accrued interest.
The proceeds OF the bond issue will
be used to fund current indebtedness
incurred for construction purposes and
provide funds for construction through
1920 and 1921
The bonds were issued under a mort
gage to the Bankers Trust Company
as trustee and cover. as first lien,
the company's physical property in
Pennsylvania, subject as to a portion
of the property to the existing 9,543,-
900 of Central District Telephone Com
pany first mortgage 8 per cent. bonds,
due in 1913. Additional bonds may be
Issued, but for not more than per
cent. of the cash cost OF additional
property. provided that the company's
total bonded debt shall not exceed the
fully paid capital stock and surplus
and provided also that net earnings
available for interest charges shall be
not less than one and three-quarter
times on the company's bonded debt.
The syndicate which offered the bonds
for subscription comprised ]. p. Morgan
& Co., Kuhn, Loeb & Co. Kidder. Pea
body & Co., the First National Bank.
the National City Bank. the Bankers
Trust Company. the Guaranty Trust
Company, Harris. Forbes & Co. and
Lee. Higginson & Co.
The Bell Telephone Company of
Pennsylvania was organized In 1879 I'M
der the laws Of Pennsylvania as the
Bell Telephone Company of Philadelphia,
the name being changed In 1907 Its
capital stock of $50 000, 900 is substan-
TALLY owned, directly or indirectly, by
the American Telephone and Telegraph
Company. Dividends at the rate of at
least per cent. year have been
paid since 1880 At the close of last
year the company owned and operated
G17Sis telephone stations.
The company's net earnings during
the last seven years have averaged S.
056.0 29 a year. The interest on its debt
including the new issue, will aggregate
50, 227 900. On May the company put
into effect throughout Pennsylvania a
new schedule of rates which. with a
few indications, was approved by the
Public Service Commission on Septenl-
Der IA. The results from the new sched-
ule of rates and the company's earn
ings from investments is expected by
its officials to provide net earnings at
a rate about equivalent to the average
for the last seven years.
During the last ten years,"'L H.
Kinnard. president OF the company.
said in letter to the bankers handling
the issue, "the funds required by the
company for the necessary increase OF
plant facilities have been obtained from
the sale of capital stock, supplemented
by cash from the conversion of certain
of its investments in securities of COM
panies located outside of the State
Adequate charges against earnings have
been made for depreciation and obso-
lescence. During the last seven years
sums aggregating over $12.700.000 have
been added to depreciation reserves. In
addition, undivided profits amounting to
s6,ec0,000 have been added to surplus
Thus a total of over $40, 600 900 from
earnings has been invested in the COM
pany's property in the last seven years
over and above expenditures for cur
rent maintenance"