Capital journal. (Salem, Or.) 1919-1980, 1922-03-03
Phone Prosperity

Following the of the Oregon Public Service Com
mission to readust reduce telephone rates. the
annual financial report of the American Telephone and Tele-
graph Company parent company and of the Pacific
Telephone and Telegraph Company The report shows that
the year 1921 the year of financial and industrial depres-
on to have been the most in the Companys
history.
The Company earnings net per share available for dv-
lends the stock, $l11O which with the exception
,f 1920 when they $112 the greatest history
This that for every dollar of stock whether paid
n cash. promotion water" there was over eleven per
ent profit paid by the phone of the nation This in
Itself shows that phone rates too high, for money
vested in public utilities is not entitle to usury
The combined surplus and reserve of the Company
which has been accumulated from earnings after excluding
Ill intangible assets $685. 12326 increase Of $6208
J3 the corresponding figure for 1920 1t represents
approximately 27 percent of the total assets the
humiliation of profits above dividends and obsoles
In other words the people have paid over half
billion dollars in telephone charges than the stock
holders entitled to receive above their high of
dividends
The Company in 1921 after meeting all operating charges
and making adequate provision for depression and obsos
and for federal and other taxes chargeabe against
1921 earnings but payable in 1922 had available interest
and dividends $73523812.77. Interest charges were
and dividends paid to stockholders at the
rate of So per year for the first quarter and SO per
for the three last quarters amounted to $43,6744O3 OIL
the resulting balance there appropriated for contn
gencies 1000 and the remainder $8328 carried
into surplus account.
The report boasts that the Company and its predecessor
have paid dividends upon stock at the rate of at least
$3.50 per share each year for the past 40 years during the
past Is years. through the first quarter of 1921 the rae
SO per share and since then So per share.
The phenomi>l prosperity of the Company in year
when all other business is losing money due to the fact
that is monopoly that controls through subsidiaries
patents and the manufacture of equipment and thereby
enabled to exact royalties and rentals from other subsd
aries whose stock it 1t cevery organized that
only the subsidiaries operating in various states under
the jurisdiction of public service commissions 1t manpu
ates figures make appear that each subsidiary
losing money and demands necessarily made for in
creased rates.
The Company has made a business of scientifically |
securing these increases and has installed machinery to this
end consisting of skilled high saared experts, to swamp
commissions with floods of figures to confuse and bambooze
10Th commissions and the amateur representatives of the
public who appear protest with the result that obectors
ougenered and worsted higher and higher rates order
and greater and greater wealth accumulated by the trust
Public regulation of public utilities has proved good
thing for the utilities but of protection to the
public has broken down. The theory that the
public under obligation to provide prosperity for investors
public utilities regardless of economic and industrial
dtons responsible for the breakdown. Railroad and
other have been sweed out of all proportion to the
value of the services rendered to keep the stockholders
prosperous with interest inflated capitalization and as
result the public is pauperzed and industry oppressed
All such efforts to perpuate initiation violations OF
the nexorabe economic law that governs business and
eventually itself and forces liquidation despite efforts
arfcay restrain its operation through state and govern
ment assistance