m New
York to Philadelphia, for instance, costs seventy-five cents, while
the railway fare would be four dollars. From New York to Chicago a talk
costs five dollars as against seventy dollars by rail. As Harriman once
said, "I can't get from my home to the depot for the price of a talk to
Omaha."

To say what the net profits have been, to the entire body of people who
have invested money in the telephone, will always be more or less of a
guess. The general belief that immense fortunes were made by the lucky
holders of Bell stock, is an exaggeration that has been kept alive by
the promoters of wildcat companies. No such fortunes were made. "I do
not believe," says Theodore Vail, "that any one man ever made a
clear million out of the telephone." There are not apt to be any
get-rich-quick for-tunes made in corporations that issue no watered
stock and do not capitalize their franchises. On the contrary, up
to 1897, the holders of stock in the Bell Companies had paid in four
million, seven hundred thousand dollars more than the par value; and in
the recent consolidation of Eastern companies, under the presidency of
Union N. Bethell, the new stock was actually eight millions less than
the stock that was retired.

Few telephone companies paid any profits at first. They had undervalued
the cost of building and maintenance. Denver expected the cost to be two
thousand, five hundred dollars and spent sixty thousand dollars. Buffalo
expected to pay three thousand dollars and had to pay one hundred and
fifty thousand dollars. Also, they made the unwelcome discovery that an
exchange of two hundred costs more than twice as much as an exchange of
one hundred, because of the greater amount of traffic. Usually a dollar
that is paid to a telephone company is divided as follows:

Rent............ 4c
Taxes........... 4c
Interest........ 6c
Surplus......... 8c
Maintenance.... 16c
Dividends...... 18c
Labor.......... 44c
---- $1.00

Most of the rate troubles (and their name has been legion) have arisen
because the telephone business was not understood. In fact, until
recently, it did not understand itself. It persisted in holding to
a local and individualistic view of its business. It was slow to put
telephones in unprofitable places. It expected every instrument to
pay its way. In many States, both the telephone men and the public
overlooked the most vital fa