Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1922-10-09
New Source
Capital Found by
Utility Companies

new l oIkf otI. 81 NO fNIrr'rc
OF public utilities by tho users ~ tbs
commodity supplied. an experiment
born of wartime cxiEcucics. has
grown so flst in the post war period
that today customer ownership" O,
telephone, electric. E1s. water and
power plants has created a class @.
investors in the United States only
cquallcd in numbers by the owners
~ Liberty Bonds. 4 source ~ raw
investment capital especially fur the
development If public utilities. un-
touched 10y financing campaigns to
use before the war, has been t1ppci
and combinations ~ companies SOW.
ing the public with daily utilities aga
being organized to sell thor syDuri-
ties direct To- customers. A. thn re-
suit of this customer ownership
movement. more than 10000 persons
in THO State of Illinois uiour are now
owners Of securities ~ ihD.r local
utilities. and new capital is h.HE
sought by this method in nearly oy.
cry state IN lilt mon.
Foremost in the movement are 'ha
Bell Telephone Securities CuN.gN
handling the securities 81 the s0h-
sidiary telephone companies ~ the
American Telephone and T,l graph
Company. tie Henry l.. pnlrrtv and
Company combination ot electric rls
and power companies. the American
L I'l.at f.f. ts..f,as.aF.4r
with water works and street railway
companies throughout the country,
and the Untility Securities COMPANY.
recently organized by n large group
of Middle Western utilities 80 dis
pose Of their securities direct To- GUS
toners.
Although the method ~ financing
was employed To some extent before
the war hy public utilities locally
ana on n small scale, the results
achieved recently have encouraged
tho companies To organize their u.
FORTS on a national basis, ana TIE
new customer ownership" movement
, bids fair TO establish itself as an
accepted and important branch Of
the investment banking machinery q
the United States.
The American Telephone Company
alone has 100000 security holders TO-.
day, an increase Of more than 80
per cent. in the past five years, due
In large men sure 10 the use Of direct
selling methods to customers. btheI
large combinations Of public utilities
have increased their numbers Of Sc
| curity holders by tho same method
| and it is asserted that the numbeH
are daily growing larger.
one group of electric light an,
power companies scattered Through.
| out tho United States has sccUr&
| moro than 2OO.O00 customer owners
| by this method in the past eight,
years. Nearly half of the new stock
holders were obtained in 1921. Nor
| than six per cent of the customcnI
| served by the 81 companies are nOvI
| stockholders.
Money available for invcstmer,
purposes In the usual quarters would
| have cost the companies more than
they could afford To pay, and many
of the companies turned 10 their Gus.
toners and employees for aid in new
financing. The results during the
war period were encouraging and
more and more securities were placed
in the hands Of customers, most d,
whom never before had owned a
security of any kind.
The cost of distributing now Sc
curtics by this method hls been
greater In som" instances than rs
the prc-wIr methods, but satisflc-
!, ton has been expressed with the
results attained. Most Of the issues.
whose total value is many millions
OF dollars. are preferred stock bear-
ing good rate Of interest. and mlry
Of them are sold on the partial pay
mcnt basis. Tho directors 81 these
various sales organizations are uu1n-
imous in warning the public ~ 'Nt:-
else caution IN buying securities ~
this character, and 20 become fIuH-
lar with tho financial ba"i,rulri
and possibilities of "a public u.H'y
before investing IN lta SECURITIES.