companies. The chief manufacturer of a small city or town is naturally a director of the local bank or trust company, of the local public service corporations and of other local interests. He may be almost the only man in the community who is really competent for such service. Is there any real reason why this should not continue? In a large city the conditions are often such that a number of corporations need the services of a particularly able man which can be given without the slightest harm to any one, without the least effect upon monopoly or restraint of trade, and to the very great advantage of each of the corporations. There is no doubt that some individuals have served as directors on too many corporations although it is by no means clear that there has been any substantial harm because of this condition. If this bill became a law, it seems certain that a greater evil than the one just referred to would result, namely, not enough men of the proper type for directors could anywhere be found. The large corporations would undoubtedly have the preference and the smaller ones might not be able to get any directors who were at all fitted for the work. It is doubtful if even the large corporations could find enough men of the right type. The question as to whether such legislation as is proposed on this subject is required should certainly receive most careful consideration from the people at large, who are quite competent to pass upon many phases of this particular matter after they have studied it, even if expert knowledge, not common in the community, is necessary to form a sound judgment on many other matters of proposed legislation relating to our industries. I cannot help thinking that if these bills, in their present form, were enacted into law, the conduct of our business would suffer irreparably, with disastrous results. But back of all these suggestions as to detailed legislation is the broad question of whether we are approaching the subject of the proper control and development of our industries in the right way. I believe that it would be greatly to our advantage if that underlying question could be studied and we could be sure that it was settled on a sound basis before we advance further into the regions of the unknown by adopting speculative suggestions based on unproved and at least doubtful theories rather than on the facts and necessities of our business situation. The Power of Humor Cousin Bill Taft tells this one on himself: "I was en route to Philadelphia one day this week and had about twenty minutes to wait until train time. Consequently, I went into a neighboring drug store to buy a shaving stick. The clerk stared at me as he wrapped it up and then remarked: "You're the dead image of Taft. "Please don't emphasize the dead part of it so," was the reply. I feel very much alive.' The story leads an eastern paper to remark that "but for the saving grace of a sense of humor, Taft might be a morose old man, withdrawn from the world and wrapped up in dreams of the past." It is Cousin Bill's pronounced good nature that has kept him fat and happy and unsophisticated through a long career of political jobholding. It is the fellow who can see the humorous in the hard scramble for wealth who lasts longest. Perpetual seriousness begets chronic moroseness, narrowness and egotism. A laugh softens disaster and a joke takes the sting out of defeat. There's nothing much sadder than a big man gone stale.-The Cleveland Press. Mrs. Murphy was getting the supper for the children on Saturday night when a young woman came to her door. "I'm a collector for the Drunkards' Home," she said. "Could you help us?" "Come around tonight and I'll give you Murphy," said the housewife as she went about her work.-The Garment Worker. IN AUSTRALIA Some Conditions Caused by Labor Domination Tersely Described For twenty years the people of Australasia have comforted themselves with the delusion that they could smash strikes by regulating wages. For fifteen years or so they have regulated wages with a vengeance, and the result is that the striker stalks abroad in the land. It is true that there is little to strike for. Wages are so high and hours are so short, as a rule, that strikes under these heads seldom occur. Other reasons have, therefore, to be found. When these are not obtainable locally, the unions may even look a thousand miles away to find trouble. For years past the unions have been pampered by Parliament and supported by the public, but all the thanks they give is to create as much industrial turmoil as possible. They are now over-stepping all limits, and the time has arrived when employers will have to take energetic steps to protect themselves. They have yielded peacefully to every kind of industrial affliction imposed upon them by Parliament. They have adjusted themselves to the false economic basis upon which industry has now to be carried on. They have probably had some fond hope, with the rest of the public, that while their interests were being sacrificed right and left by Parliament, industrial peace would at least be secured; but while they have been patient, and hoping for the best, unionism has only grown aggressive and turbulent. It is devoting itself to linking up all its interests in one big organization, so that, while ninety-nine one-hundredths of industry may be in peace, yet any little disturbance that may occur in the remaining fraction might be immediately and forcibly spread throughout the whole. This is the great scheme it has been sedulously building up. while the community, through its Parliaments, has been placing one burden after another upon the backs of the employers, believing that it was suppressing strikes and creating industrial peace. The employers must, therefore, prepare for what is before them and build up a huge fund with which militant unionism can be fought and suppressed. In West Australia, South Australia and New South Wales, a beginning has already been made in the estab lishment of strike defense insurance funds, so that, when the unions begin their war, money will be immediately available. To be effective, however, the movement requires to be established in all the states, and afterwards to be federalized in the way the unions themselves are federalizing, so that, in whatever part of Australia the trouble arises, the whole of Australia will be immediately concerned in its suppression. The future danger of Australia is not the alleged land hunger of Japan, or of any other country, but militant, strike-creating unionism, and, as Parliament and the community have done nothing but build up this great curse to the country, employers must stir themselves to combat it before it is too late. From Liberty and Progress, Melbourne. Organization Wins Walter McQueen, a person of color, faced Justice Howard in the police court at Jackson, Tenn, the charge against him being assault and battery on the person of Lily Belle Hopper. In addition to the battered complainant three of her friends appeared as witnesses against him. The clerk read the warrant, beginning: "City of Jackson, Tenn., against Walter McQueenTM and so on. The prisoner scratched his head, meantime contemplating the glowering faces of the chief witnesses for the prosecution. "Please, suh, read dat fust part over agin to me." he requested. "City of Jackson, Tenn., against Walter McQueen," obliged the clerk. "Well, Jedge," said Walter, "ef de whole city of Jackson an' dese foah cullid ladies is organized ag'inst one nigger, whut chance has he got? I's guilty!"-The Argonaut. Bell Telephone System's Report President Vail's Views as to Government Ownership; Its The continued growth of the Bell System, its earnings and expenses and general financial prosperity, its attitude as to government ownership, its agreement with the Department of Justice, the sale of its Western Union holdings and its relations with the general public are all set forth in detail in the annual report of the American Telephone & Telegraph Company, just issued. President Theodore N. Vail has something very definite to say in regard to the government ownership of telephones and his frank discussion of this question is perhaps the most interesting feature of the report. GOVERNMENT OWNERSHIP AND OPERATION In summing up the attitude of the company towards this subject, Mr. Vail says: "Our opposition to government operation and ownership is not based on pecuniary, partisan, prejudiced or personal reasons. It is because of our interest in the upbuilding of a great public utility and its preservation. "We are opposed to government ownership because we know that no government-owned telephone system in the world is giving as cheap and efficient service as the American public is getting from all its telephone companies. We do not believe that our government would be any exception to the rule." He states that the common impression that the Postmaster General has made a report favoring the acquisition of the wire lines is erroneous. It is not a departmental report, he says, but merely the conclusions of three officers of the Post Office Department, transmitted without comment by the Postmaster General. As to possible government purchase, Mr. Vail quotes Congressman Lewis, the Congressional exponent of government ownership, to the effect that there is no water in the Bell capitalization; and urges the stockholders not to be induced to part with their holdings through fear of confiscation. He shows that there is a deficit in all government-owned systems and says that every telephone system in the world adopts the Bell System as a standard, uses the Bell operating methods and either uses Bell apparatus or copies it. And yet there is not one, he continues, that gives an approximation to the facilities that the Bell System gives or gives as good or as cheap service, all past prophecies to the contrary notwithstanding. "These deficits are not the result of a definite policy to give a cheap service to individuals at the cost of all, but are due to errors in management such as underestimates of values and cost of new construction; disregard of maintenance, depreciation and particularly of obsolescence; impossible theories of operation, and a mistaken policy founded on promises, prophecies and assertions exactly the same in character as those now being used to bring about government ownership in this country, and upon a failure to understand and appreciate the advantages of private as distinguished from government organization. "There are no sound reasons given," says the report, "or real advantages promised for government ownership and operation which do not apply to or cannot be secured by government regulation." risk, spurred on by the incentive of re "Private initiative, invention, enterprise, ward, have changed the face of the world, and the resulting unearned increment largely constitutes the wealth of nations; without it many of the great scientific industrial developments would have remained scientific curiosities, even if they had been evolved at all." The advantages of one telephone system are clearly set forth, as are the differences between the exact technical knowledge required for operation and the judicial ability necessary for regulation. "Government administration," the report says, "is more or less a game of politics, and while with government operation it may sometimes be possible to have efficiency, it will always be impossible to have economy. a "The government-owned European telephone plants, notwithstanding the low price of foreign labor, are carried at much higher cost than those of the Bell System and yet every one of them uses the Bell System as a model. The book value of the plant of the Bell System per station is less than 60 per cent that of Belgium; less than 75 per cent that of Austria; about 85 per cent that of Germany, Great Britain and Switzerland; and all of them government-owned." Mr. Vail brings out the fact that Americans are better supplied with telephone facilities than any other people, having six times as many telephones per capita as Great Britain and thirteen times as many as France, and that the rates here are as popular as those of any government-owned plant. In showing the inability of the post office to operate the telephone business efficiently, he says: "The success of the parcel post has been set up as a reason for the government operation of the telephone and telegraph. Why it should be is hard to understand. The two services have nothing in common and are in no way comparable. The parcel post is not in any sense a new service; it has merely increased the volume of the mails by removing some limitations as to size and weight of packages mailed, and making some reduction in rates of postage for merchandise. "It would not be a question of capacity; the experiment would be disastrous principally because the postmasters are not fitted by experience or training for the telegraph or telephone business, but also because it would be secondary to their grocery-drygoods-notion shop, their principal business." Another reason is that the telephone already reaches more places than there are post offices. He concludes his remarks on this subject by saying that, "The American public has been educated to depend on the most efficient, most extended telephone service in the world. The relative number of the people reached is the largest and the average cost to each is the lowest of any important service in the world. "Government ownership would be an unregulated monopoly. "Regulation by commissions of high standing composed of individuals of ability and integrity, and good impartial judgment, is the greatest protection to the public interests as against private exactions that ever was devised; its effectiveness depends upon the standing with the public of the Commission as a whole and the Commissioners as individuals.' GROWTH OF THE BELL SYSTEM During the past year subscribers` telephone stations have increased until now there are 8.133.017, a gain of 676,943. These stations reach 70,000 localities or 10,000 more than the number of post offices. The total wire mileage is 16,111,011, of which 92 per cent is copper. More than half the wire mileage is underground, the total underground plant representing a cost of $181.500,000. The number of daily telephone connections showed a growth of nearly two million, reaching an average of 27,237,000 a day. 27,237,000 a day. Europe has only two-fifths of the telephone traffic of the United States. The extension of the telephone plant during the year amounted to $54,871,856, making a total for fourteen years of $646,915,200. According to present estimates the construction for the current year will cost in the neighborhood of $56,000,000, of which the local resources of the companies will supply $25,000,000. Large reserves have been made for maintenance, reconstruction and depreciation, and a steady improvement of service is reported to have been achieved. The report says: "The gross revenue in 1913 of the Bell System-not including the connected independent companies-was $215,600,000; an increase of over $16,000,000 over last year. Of this, operation consumed $75,400,000; taxes $11,300,000 or one and onehalf per cent on the outstanding capital obligations; current maintenance, $32,500,000; and provision for depreciation. $37,700,000. "The surplus available for charges, etc., was $58,700,000, of which $16,700,000 was paid in interest and over $30,300,000 was paid in dividends. "The total capitalization, including inter-company items and duplications but excluding reacquired securities of the companies of the Bell System, is $1,390,242,470. Of this, $620,127,086 is owned and in the treasury of the companies of the Bell System. The capital stock, bonds and notes payable outstanding in the hands of the public at the close of the year were $770,115,384. If to this be added the current accounts payable, $26,471,681, the total outstanding obligations of every kind were $796,587,065 as against which there were liquid assets, cash and current accounts receivable, of $72,237,885, leaving $724,349,180 as the net permanent capital obligations of the whole sys tem outstanding in the hands of the pub lic. plant and other assets. . . .4.92 In other words, the property employed earned less than 6 per cent per annum, and the dividends and interest paid were less than 5 per cent upon the value of the property, which could not be considered unreasonable. Taken by itself the American Telephone & Telegraph Company shows net earnings of $40,576,746.19, an increase of $2,669,101.93 over 1912. The total outstanding capital stock and bonds were $504,207,300, which represent payments into the treasury of over $24,500,000 more than the par value of the capital obligations. The number of shareholders, 55,983, showed an increase of 5,686 during the year. ENGINEERING The engineering evolution of the telephone which has been accomplished by the engineers, is reviewed with special reference to the marked improvement of telephone exchange equipment and methods of operation, and the extension of transmission in the underground circuits between Boston and Washington, and in the work of connecting the Atlantic and the Pacific for telephone communication. At headquarters the Bell System has a force of 550 engineers and scientists, a staff unequaled in the world, wholly engaged on studies of these subjects. LEGAL In describing the work of the legal department, the co-operation of the Bell System with the Interstate Commerce Commission is shown, and the correspondence is given setting forth the agreement with the Department. of Justice. Mr. Vail shows how the disposal of some $30,000,000 of Western Union stock was brought about so as to separate completely the two companies. During the three years of association the gross revenue of the Western Union increased 45 per cent, the wages of operators were increased 55 per cent and large sums were set aside for revenue and reconstruction. The report says that the financial condition of the Western Union with some $15,000,000 net of liquid assets was never better. EMPLOYES' BENEFITS The report shows that under the pensions, disability benefits and insurance plan, in 16,054 cases employes of the Bell companies had participated in the benefits and the payments have aggregated over one million dollars. An Instance The telephone system of Australia is carried on at a loss of £178,812 for the year; yet Mr. Justice Higgins felt no compunction in increasing the pay of the electrical mechanics to a rate far in excess of what is paid in private employment.-From Liberty and Progress, Melbourne. |