UNITED WIRELESS TELEGRAPH CO.
In view of the wide publicity which has been given to the charges made against certain officers of this company, and the spectacular, misleading and untrue manner in which the matter was exploited, the management deems it a duty to the stockholders of this company to inform them of the exact facts of the situation.
On June 15 the President and 1st Vice President of the company were arrested. The gist of the charges against the officers arrested, is that they have been using the United States mails to promote a scheme to defraud, in that fictitious and inflated value was placed upon the patents and patent rights of the company and that the selling price of the company's stock was advanced without justification.
Early in May of the present year, a personal representative of the Chief Post Office Inspector at Washington called at the offices of the company and stated that he desired to make a general investigation of the affairs of the company. The Executive Committee, by unanimous resolution, promptly authorized the Treasurer of the company to submit for examination all books, papers and records of the company, and in pursuance of such direction, the Treasurer and his assistants afforded every possible assistance to enable this officer to make a thorough investigation. This officer repeatedly expressed his complete satisfaction with the manner in which he had been received and his investigation expedited by the officials of the company. While the investigation was still in progress and without the slightest intimation from any source that the result of the examination was otherwise than satisfactory, the warrants were issued and the arrests made.
In order that the stockholders' may see how unusual was the action of the Government in singling out the United Company for attack, we deem it appropriate to call attention to the standing of other wireless companies and their methods of doing business.
On January 1, 1910, there were in existence 10 wireless telegraph and telephone companies, doing or claiming to do business in this country. These companies were:
The first four companies mentioned, namely, The Collins, Clark, Pacific and Massie Companies, have been merged into The Continental Wireless Telegraph and Telephone Co., with an authorized capitalization of $5,000,000.00.
The original authorized capital of the American Marconi Company was $6,650,000.00. Recently its capitalization was reduced to $1,442,500. The total authorized capital of the companies above enumerated is $16,442,500. The total authorized capital of the United Company is $20,000,000.00, of which less than $12,000,000.00 has been issued. It should be noted that the American Marconi Co., the original authorized capital of which was over $6,000,000.00, was limited to the operation of business in the United States. It will thus be seen that the capitalization of the United Company is not only not excessive, but exceedingly conservative.
The official list of wireless telegraph stations of the world, published by the United States Navy Department, Sept. 1, 1909, shows the number of stations open for public service in this country credited to all companies other than the United Company, does not exceed 27 stations. The number of stations credited to the Marconi Co., is 4, and the number credited to the United Wireless Telegraph Co., is 74, since which time the United has installed 26 new stations, making the total number in active commercial operation today 100. The same official list shows total number of merchant ships and yachts equipped with wireless apparatus to be 465. The United Company has more ships equipped than all other companies combined, and, since the publication of said list, the United has equipped and under contract other ships, sufficient to bring the total list up-to-date to 340 ships.
In view of the foregoing, it will readily be seen that the valuation placed upon the patents and patent rights of the United Co., are extremely conservative and the advances in market price of the stock authorized by the Executive Committee were amply justified by the increase in business.
We firmly believe that with the support and confidence of our stockholders this company will not only come out of this trouble triumphantly, but will continue to grow and expand to what we have always believed it would, the largest and most successful wireless company in the world. We would, therefore, ask the stockholders to not only suspend judgment, but give us their hearty and active cooperation and enthusiastic support.
Inasmuch as certain charges have been preferred against certain officers of this company, the management would prefer to have judgment in this matter passed upon by such directors of the company as are not officers and to that end a special meeting of the directors has been called to appoint a special committee to institute a thorough investigation of the company's affairs to ascertain whether there is any basis in fact for the charges in question, and to make their report to the stockholders and to the public.
In order that the directors may be unhampered in the choice of the investigating committee, none of the directors who are officers in the company will take any part in the selection of said committee.