Page:Popular Science Monthly Volume 71.djvu/320

construction of new railroad lines practically ceased, less than one fifth the amount being expended for this purpose in 1884, that was expended in 1882. The bank clearances, which had exceeded forty billions of dollars in 1883, fell to twenty-four billions in 1884, and, as a distressing industrial depression prevailed in several foreign countries, there was only a slight export demand for our products.

Quite naturally all these grave disturbances in financial, industrial and commercial circles seriously affected the growth of the telephone industry. Thousands of subscribers were compelled to dispense with the telephone through inability to pay for its use, or by reason of the closing of places of business, while hundreds who had expected to subscribe were compelled to postpone the adoption of this serviceable utility. Nevertheless, nearly all the larger exchanges reported a moderate growth, and the net gain in subscribers reported by all the Bell companies was 11,222 for the year, making a net increase of 9 per cent., a remarkable growth considering the times and conditions. The gross earnings of all the licensee companies in 1884 exceeded $9,500,000, or 18 per cent, on a total capitalization of $53,000,000, not including the capitalization of the parent company, which was $9,602,000.

On January 1, 1884, there were 1,325 Bell exchanges in operation. During the year 1884 there were 61 new Bell exchanges opened, which, added to the 1,325 exchanges in operation, should have made a total of 1,386 when the year closed. But of 133 small exchanges, "kitten exchanges," as they were called, that had been absorbed in the consolidation of local companies, 63 were converted by the new owners into toll stations, while 70 were closed for the time being, owing to an almost total lack of support. Thus there were only 1,253 exchanges in operation on December 31, 1884, or 72 less than a year previous. Referring to these exchanges, the parent company stated in its annual report:

As a rule, all the larger exchanges have had a steady growth, and there seems no reason to doubt that this will continue for some time to come. On the other hand, there is a pause in building exchanges in small places, and some 78 of those already started have been for the present given up, while 61 new ones have been established. The establishment of these systems in small towns was probably pushed too rapidly, in view of the stagnation of general business which followed. Many of these now abandoned will be restored upon a revival of business, and others can be put into operation under a system which is being worked out for small exchanges without a central office, and which, if as successful as we hope, will carry the telephone into a large number of towns and villages w-here it is now impossible to place them upon a paying basis.

In this connection it is interesting to compare the foregoing statistics with the following tabulated statement showing the average