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Show ACCURACY AND PUBLICITY PROVES TO DE A POPULAR MOTTO. Prompt Response to Bold Move of President Vail. "Accuracy" Reduced Reduc-ed Western Union's Surpluo $13,-000,000. $13,-000,000. -"Publicity" Restored Con-fldence Con-fldence and Its Stock Went Up. Are tho groat financiers of tho country beginning to seo a now light? Tlmo was, until recently in fact, whon tho men nt tho head of tho big corporations cor-porations "kept their business to thomsolvos," as for as tho law would allow. Capable men nt tho head of tho big concerns, long realized tho weakness weak-ness of their position, but what was needed obviously, as In nil great reforms, re-forms, was an unmlstnkablo occasion and a courageous man. Tho occasion nroso In tho purchnso of tho Wostorn Union Telegraph compnny by tho American Telcphono and Telegraph compnny, and tho man appeared tn Theodore N. Vail, President of tho purchasing corporation. It was last December whon public nnnouncomont was mado that tho Gould holdings of Western Union had boon tnkon over by tho Telephone company. On account of tho high esteom In which tho management of the tolo-phono tolo-phono company Is so generally hold, great things wero predicted ns a ro-suit ro-suit of tho absorption of Wostorn Union. By tho press of tho country tho "deal" was most favorably commented com-mented on, it being widely pointed out that under tho direction of such men as Theodore N. Vail and his associates, as-sociates, tho tolegraph company was bound soon to work Itself into a position po-sition whero it could offer tho public far moro efficient sorvlco than It had over boforo boon able to offer. Dut n very few months had olapsed when It boenmo apparent to the now management thnt a modern and up-to-dato appraisal of tho company's assets would mako posslblo n far greater degrco of efficiency of operation. oper-ation. "Here," they said to them selves, "wo'vo bought control of this proporty and wo know It's Immensely valuable but wo don't know just how valuable These appraisals of real estate and securities owned wore mndo a long tlmo ngo. If wo have a complete Inventory made of ovorj thing wo'vo got wo can announce th. facts to tho public, stnrt a now sot of books, and begin our responsibility to stockholders right there." How Inventory Was Taken. Tho most export accountants nnd appraisers to bo had wore put at the task. Their labors lasted ovor eight months. Their report and Its publication publi-cation by tho company marks an epoch ep-och In finance It began by recommending nn adjustment ad-justment of the difference between tho appraised and book values by a chargo of $5,595,089 against surplus. sur-plus. Book values of securities hold wero reduced to market values, bad and doubtful accounts wero "charged "charg-ed off," an allowance of $2,000,000 was mado for "depreciation," nnother of $500,000 for "roservo," nnd so on, until tho old surplus of $18,807,000 camo down to $5,136,000. It required courage, tho publication of this statement to stockholders, saying say-ing In effect: "Tho property of your company has been revnl- ed: tho surplus Isn't nlnoteen millions, mill-ions, as you havo beon led to believe, be-lieve, but flvo millions." hut. it wnn tho truth, nnd President Vail did not flinch. "Accuracy ana publicity," he declared, wns essential. "Tho stockholder stock-holder has n right to know. The shares of this company nro scattered scatter-ed from ono end of tho Union to the other. This Is moro than a private corporation. It Is n great national enterprise Tho public- is ontltlod to tho fncts." Tho report wns ordered published forthwith. Financiers of tho old school nnd speculators gonerally were aghast. What would happen? Would tho bottom drop out of Western Union whon tho shareholders realized realiz-ed that tholr propotry was worth $13,000,000 loss than they had supposed? sup-posed? t But tho amazing thing happoned. Tho stock went up and stayed up. Tho public had responded respond-ed to this remnrkablo display of frankness nnd confidence; to tho new motto, "Accuracy and Publicity." Tho full slgnlflcanco of tho action of tho now board Is stated concisely by Harper's Weekly In theso words: "Is this policy of publicity and of open-handed dealing with shareholders sharehold-ers and public tho fororunncr of & similar movement on tho part of other oth-er big corporations? Cortnlnly It Is to be hopod that It Is. In tho chbo of theso big companies, dopendont upon public patronage nnd doing business busi-ness under public franchise, can thoro bo any quostion of tho right of tho peoplo to know? "That right is bolng recognized, tt is recognized now In this opochal let on the part of the telephone and telegraph Interests. It is tho dawn of a new era In corporation finance." |