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THE DEVELOPMENT OF TELEPHONE SERVICE

of $306,900, for $6,500 cash in treasury, and for all the stock of the Bell Telephone Company, $450,000, and of the New England Company, $200,000, valued at $536,600. Within five months after its organization, the headquarters of the National Company was moved from Reade Street, New York, to 95 Milk Street, Boston.

Under the wise and liberal guidance of President William H. Forbes, the practical progressive policy of the National developed a volume of business so large and of so varied a character as to make clear the need of a still broader parent organization able ultimately to assist in carrying the financial burdens of any or all of its operating companies, and to extend substantial encouragement for extended development. Then the successful outcome of the bitter contest with its competitive opponent, the Western Union Telegraph interests with a total of seven thousand established telegraph offices, had drawn to the National company the thoughtful interest of capital seeking productive fields for investment, and soon investors began to overrun the telephone field.

Thus, after a very strenuous life of fifteen months, the National was absorbed by the fourth of the parent companies, the American Bell Telephone Company. This fourth organization was granted a special charter by the commonwealth of Massachusetts, on March 19, 1880, which was slightly amended as of May 21, 1883, in so far as it relates to the holding of stock in the operating companies. The American company desired to have an authorized capitalization of $15,000,000, but the legislature limited the amount to $10,000,000.

At a special meeting of the stockholders of the National Bell Telephone Company, held on Monday evening, March 29, 1880, it was voted unanimously to sell all the property of the company to the American and to transfer the same as of May 1, in return for payment in the form of six shares of the capital stock of the American Bell for each share of the National. This was a reasonable price to pay, as shares of the National had sold as high as $960, according to a statement in the Boston Herald, though the par value was only $100, while the last sale of 500 shares had brought $600 a share in December, 1879.

Two days later the National stockholders received a printed notification reading in part:

The American Bell Telephone Company has been organized with a capital of $7,350,000, divided into 73,500 shares of $100 each. This new company has voted to purchase all the property and assets of the National Bell Telephone Company for the sum of $6,500,000, payable in stock at par (05,000 shares) and to offer the remaining 8,500 ($850,000) at par to the stockholders of the National Bell Telephone Company as of date of April 1, 1880.

Of the 65,000 shares transferred to the National Company in return for all its property, patents, etc., 51,000 shares, or $5,100,000 were distributed among the national stockholders according to their respective