Evening star., 1923-11-04
Local Bond Houses Interested IN
+ Tel. & Tel. 500, 900, 900 Issue
Offering already Taken-Ne'O Fina1'c'
ing to Help Expand Seruice-Prices
of Unlisted Secuities-NOtes.

The American Telephone and Tefe-
graph Company has sold 800, 900
twenty-year 5h per cent sinking
fund gold debentures to a powerful
New York banking syndicate. which
will offer them at 9S1a, to yield about
5.63 per cent. The syndicate will be
participated In by practically every
local bond house. The books will he
opened at 10 am, and. it Is expected,
will close simultaneously, owing to
the unusual attractiveness of the
issue.
The new financing will provide the
Bell Telephone system with funds for
additions and betterments to meet the
steady demands Of the public for in
creased telephone service and to re-
tire $4,000. 900 five-year per cent
notes due February 1: 1924; With
the company will be $37,090.000 less
than it was in 1920, while the capital
stock since that date has increased
by over 100000, 900.
For the last ten years the COM
pany's net earnings averaged over
four and one-half times interest
charges. and for the current year 1t
Is estimated that the net earnings for
interest will be nearly seven times
the annual interest charges after this
financing is fully effecti e.
At this time the American Tele-
phone and Telegraph Company has
S747,o00.000 stock outstanding and
S226. .604 500 funded debt. or ratio Of
stocks to bonds of about three and
half to one. This is exclusive Of the
new. issue. There is sl.ooo.ooo,ooo
stock authorized.
The Bell system as a whole has
$3.50 435,01S stock outstanding and
$662,2 1.525 funded debt.
The American Telephone and Tele-
graph Company has made available
the greater part of the capital which
has been used to buy materials and
pay for labor to build the properties
of the Bell system.
The American company. therefore,
while operating the long distance
lines throughout the country and
ices for the twenty-five associated
companies. is also the principal
financing agency of the Bell system.
investing the proceeds arising from
the sale of its own securities in the
stocks, bonds and notes Of these
operating companies.
The American company owns. d.
rectly or Indirectly, about 80 per cent
OF the voting stock of associated COM
panies.
Herr Pleads for Railroads.
Expansion of the nations transpor-
tation facilities at a rate correspond
ing with traffic demands, which
double about every twelve years, was
urged In a statement last week by
E. M. Herr. president of the West
1nghouse Electric and Manufacturing
Company. The present transporta-
tion situation was described as
"menacing." despite heroic efforts on
the part of railroad managements.
In order to effect the developments
and Improvements necessary to ade-
quate growth railroads must be able
to obtain ample capital-many hun
dreds of millions Of dollars a year
TO construct new lines, electrify,
straighten curves, build heavier
bridges. buy new locomotives and
cars and modernize terminals, de-
clares Mr.. Herr. But, due to the
present restrictions. the margin be-
tween railroad revenues and expenses
has become SO small that the needed
money cannot be readily borrowed.
In other words, the credit Of the rail-
roads has been Injured to such an