OCR Text |
Show MEMIFKKE: ACCURACY AND PUBLICITY PROVES TO BE A POPULAR MOTTO. Prompt Response to Bold Move of President Vail "Accuracy" Reduced Reduc-ed Western Union's Surplus $13,-OC0.0CO. $13,-OC0.0CO. "Publicity" Restored Con-fidence Con-fidence and Its Stock Went Up. Are the great financiers of the country beginning to see a uew light? Timo was, until recently In fact, when the men at the head of the big corporations cor-porations "kept their business to themselves," as far as the law would allow. Capable men at the head of the big concerns, long realized the weakness weak-ness of their position, but what was Deeded obviously, as In all great reforms, re-forms, was an unmlstakablo occasion and a courageous man. Tho occasion arose In the purchase of the Western Union Telegraph company by the American Telephone and Telegraph company, and the man appeared m Theodore N. Vail, President of the purchasing corporation. It was last Iecember when public announcement was made that the Gould holdings of Western Union had been taken over by the Telephone company. On account of the high esteem In which the management of the tele-phono tele-phono company is bo generally held, great things were predicted as a result re-sult of the absorption of Western Union. Ily the press of the country the "deal" was most favorably commented com-mented on, It being widely pointed out that under the direction of such men as Theodore N. Vail and hia associates, as-sociates, the telegraph company was bound soon to work Itself Into a position po-sition where It could offer the public far more efficient service than It had ever before been able to offer. Hut a very few months had elapsed when It became apparent to the new management that a modern and up-to-date appraisal of the company's assets would make possible a far ( greater degree of efficiency of operation. oper-ation. "Here," they Bald to themselves, them-selves, "we've bought control of this property aad we know It's Immensely valuable, but we don't know Just ! how valuable. These appraisals of , real estate and securities owned were made a long time ago. If we hava s complete Inventory made of every , thing; we've gotwe can announce the , Facta to the publr, start a new set of , booke, and begin Npur responsibility to stockholders right' there." How Inventory Was Taken. jT The most expert accountants appraisers to be had wereut a task. Their labors lasted otw months. Their report and Its l cation by the company marks 1 och In finance. It began by recommending any lustment of the difference betwV the appraised and book values by charge of $5,595,089 against But plus. Rook values of securities hell were reduced to market values, bad ind doubtful accounts were "chargj td off," an allowance of $2,000,001 waa made for "depreciation." anothf of- $500,000 for "reserve," and so f until the old surplus of $18,867 came down to $5,136,000. It required courage, the publlcnj Df this statement to stockholder fnyw Ing In effect: "The propert, 0f Cl rour company has been ; eval- A nod: the surplus Isn't nlneteer mill- w loos, as you have been led t0 be- Si lleve, but five millions," but it was Ihe truth, and President Vail nd not Blnch. "Accuracy and publlaty,- he t leclared. was essential. "Th. stock- rr bolder has a right to knov. The n (hares of this company are scattered scatter-ed from one end of the Un'on to the ' ather. This Is more than a private tl corporation. It Is a gtcat national fi enterprise. The public Is entitled to the facts." The report was ordered published forthwith. Financiers of the old chool and speculators generally were aghast What would happen? Would the bottom drop out of Western Union when the shareholders realised realis-ed that their propetry was worth $13,000,000 less than they bad bud- b posed? Hut the amazing thing d happened. The stock went up and 1 stayed up. The public bad respond c ed to this remarkable display cl frankness and confidence; to the new motto. "Accuracy and Publicity." The full significance of the action 1 of the new board Is stated concisely by Harper's Weekly la these words: 1 "Is this rollcy of publicity and ol 1 Dpen handed dealing w ith sharehold- 4 era and public the forerunner of i 1 similar movement on the part of oth- ' er big corporations? Certainly It Is I to be hoped that It Is. la the rase 1 of these big companies, dependent ' upon public patronage and doing bust Dens under public franchise, can there be any question of the right ol ' the people to know? 1 "That right Is being lecognlxed I It Is recognized now In this epochal ' act on the part of the telephone and telegraph Interests. It Is the dawn of a new era In corporation finance." ' |