The Waterbury Democrat., 1938-02-02

New Haven, Feb. 2-Net earnings of The Southern New England Tel ephone company in 1887 were $3.- 3S0,569 or $8.45 per share of com- mon stock, as compared with $3,- 073,370 or $7.68 per share in 1o36, President Harry c. Knight reported at the annual meeting of stockhold- CTS here yesterday afternoon.
 "The business of the company for 1887 was sharply divided between two periods" MT. Knight reported. For the first three quarters the ad- vance over 1036 was definite and encouraging. The fourth quarter directly reflected the general busi- ness recession in both volume and earnings. Ordinarily telephone ac- tivity holds up longer than average business at the beginning of re- cession and lags at the beginning of recovery. In the present instance the reaction was immediateand still prevails"
 New Peak Sealed
 Telephones in service increased 17,929 to new peak of 337, 7,474 and toll revenues were larger by nine per cent. Total operating revenues were $17,936,33s, as compared with $16, ,774,2 in 1886.
 The increase in revenues over 1886 was 6.9 per cent, while expenses, ex- cluding interest, increased 7.8 per cent. The outstanding expenses in creases were in wages and taxes. Operating taxes in 1887 were $l, ,442,- o0l, 6 marked increase over $1,034,- 0l4 in 1936.
 Dividends totaling $3,100,000 or SITS per share, were declared dur ing the year, an increase of $500, ,000 over 1936 when the amount per share was $6.25. The income bal ance transferred to surplus was $e.25. The income balance trans ferred to surplus was $280,569. The company'S surplus (unappropriated) as of December 31, 1897 was $3,548,- 669.
 Reductions in charges last year saved the company's customers $l5O,0O0 on an annual basis, MT. Knight estimated. This does not include savings to Connecticut toll users of $25O.O00 as a result of re- ductions by The American Telephone and Telegraph company in rates for long distance service.
 Replacements
 Additions and replacements of poles, cable lines and other plant equipment were larger than for the past few years, since spare facilities resulting from loss of telephones in service in 1892 and 1883 have been largely utilized. Gross additions of $7,556,546 resulted in a net plant in- crease of $4.0l7,535 after retirements and transfers amounting to $3,539,- OH.
 Dial exchanges tying into fun damental plan for Speedier toll service were placed in operation in new fireproof buildings in Nauga- tuck, Glastonbury and Orange. Sim- liar buildings were erected in Darien, Old Greenwich, Deep River and Thompsonville, where dial ex- changes are being installed this year.
 The volume of telephone traffic exceeded that of any previous year, MT. Knight pointed out. Local trafflc or calls between customers within the same exchange numbered 526 million or 26 million more than in 1936," he said. Toll or out ct town calls increased by two million to a total of 26 and one-half million. Our technical observations and measurements indicate that 99.6 per cent of the local traflc and 985 per cent of the total traffic was handled without error, while the average time involved in the com- pletion of toll or out of town calls was 54 seconds. More than 90 per cent of this latter traffic is handled by the first operator reached and is completed while the calling sub scriber remains at the telephone.
 Assets
 The company's total assets at the