age number of subscribers connected was only 93. And as there were many exchanges having more than 300 subscribers, it is obvious that many others had less than 30, and thus were being operated and maintained at a continuing loss.
What were the financial conditions of the country during these four years, 1880-1883? What was the character of the sentiment prevailing among investors that enabled such anomalous conditions to continue?
The year 1880, notwithstanding that a presidential election occurred, proved to be an admirable period for the promotion of industrial as well as speculative enterprises, and telephone projects of every character appeared to meet a hearty welcome at the hands of the investing public. To the older licensees, enriched by the wisdom gained in a whole years experience, it soon became evident that many of the new exchanges were being built and operated only for speculative purposes by local promoters, in anticipation of profitable consolidations, rather than as a permanent investment for local capital. For the question of equitable rates yielding a fair return on a legitimate investment, or the unpleasant results in lowering the character of the service by giving unlimited calls at an unprofitable rate, thus loading the lines with gossip and frivolous conversation, to the detriment of rapid, legitimate service, did not concern the speculator. Where the older licensees endeavored to warn local investors against accepting the speculator's statements without substantial proof, the latter felt justified in agitating a public denunciation of what he termed the extortionate rates of the older licensees. The natural result was that the speculative exchanges had a big list of subscribers at unprofitable rates, until consolidation brought a new management that proposed to take care of the shareholders first and then give the best service possible to the subscribers. This meant an increase in rates to an amount that would insure a fair return on the investment; and then fully one half the subscribers who had been reaping the advantage of unprofitable rates promptly displayed their gratitude by giving up the service rather than pay the increased price.
On January 21, 1881, many of the telephone companies in the east suffered from the most destructive sleet storm that had visited that section in a long period. So great was the weight of the sleet frozen on the wires attached to roof-fixtures that in numerous cases the roofs were wrecked and walls were damaged. Miles of the pole lines went down, and in the main thoroughfares of the larger cities telephone wires were inseparably entangled with telegraph and electric light circuits. By reason of modern methods of construction, a disaster of such a character could not now occur, though greater losses have occurred in several sleet storms. But this was the first serious wreck
