The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-12-23

4 W tOtu tip WOiA vi tut lNtW ctn RLh
Brooklyn Bridge Company. There is no doabt
that this SUN win be forthcoming; for although
the city Of Brooklyn may be the gamer TO the
largest extent by the construction of the
bridge, the interests of New York will be
materially subserved also. We hope now to
see the work set on foot without delay. II is
presumable that the opposition OF the Union
Ferry Company to the bridge enterprise has
been overcome SO far. and IL il to be hoped
that no further distractions will be placed in
the way of this most valuable undertaking.
Tushbrrno's Bell In Congress on the Gov
ernment Telegraph.
The bill for the establishment of govern
ment telegraph introduced in Congress by f.
3. Washburne starts out with the one vital
principle of economy in construction. 1t pro-
yides that the materials shall be supplied and
the work done by the lowest responsible bid
ders, it new lines are to be built, and that in
no case shall an offer for the sale to the gov
eminent Of any existing lines owned by pri-
vate corporations be accepted unless the
twenty-five per cent less than the lowest ag-
gregate bid for the construction and equipment
Of the new lines. 1t is evident from this sim
pie and just proposition that Congressman
Washburne thoroughly understands the sub
iect upon which he has entered with such
commendable zeal, and that he will carefully
guard against the swamping of this popular
reform at the outset and the destruction of the
real object it seeks TO accomplish. Low tele-
graphic rates and ample telegraphic facilities
are what the people demand, and these adj
vantages cannot be secured if new lines are to
be constructed at the prices paid by corpora
ton rings, or if old lines are to be foisted on
the government at anything like the amount
of their watered and fictitious stock.
The telegraph business has always paid
under the most adverse circumstances In
spite of stock manipulations by which the
companies have been burdened with mil
lions Of debt and false capital repre-
senting no actual value; notwithstanding
the most wasteful expenditure in. con-
struction, repairs and working expenses
under the exorbitant rates consequent
upon non-competiion and with necessarily
limited facilities, telegrarhic enterprises have
secured large receipts and realized large
profits. The Western Union Company, in
1867, showed gross receipts to the amount of
seven million dollars and net profit of two
and a half millions. From this we can readily
understand what the receipts and profits
would have been had the capital of the COM
pany only represented its actual value on the
basis of the honest construction Of its lines,
had the working expenses been controlled by
economy and had the business been quad
rupled under the impetus Of rates fifty per cent
lower than those which then prevailed
The present fictitious capital Of the Western
Union Company, compared with what it's
actual capital-with its requirements of
other lines-would have been without the
stock manipulations. will forcibly illustrate
the Importance of the points made in the
Washburne bill -
The original capital Of the Western Union
(This Was Yatered in 1885 ana 1866 to
twice the amount each tlme.)
The capital in 1867 was.,. ......... 100000
This was watered In 1858 to.............. 100000
the amount, making. .......e........... 100000
creased $1,000, 900, making -. .+...... 1900 600
In May 1864, by o grand watering vrucess
it was more than doubled making 49,. 81, $50 100
IL was further Increased by stock dividend
OF two and hail per cent instead OF cash
and by purchase OF stock in other lines In
1865, up 10 April, 1866, to. ......... 2l,95,,7oo
In 1866, BY the purchase Of the United States
telegraph for "a 100000, the Pacific lines
for s3,333 900, and the American for
s2,ooOoOo II was increased to........ Al, 40 700
Making deductions for unconveried stock,
&C, the capital now represents 4l0.0ss
shares the par OF which makes the
present capital oi....... 4l.09s,so0
Thus the company stands at the present
time, and upon this fictitious capital it has to
make earnings and pay dividends. Had the
capital from the early organization Of the com
pany been exempt from the watering process,
and the purchases and consultations Of other
lines been upon fair conditions, the amount Of
stock outstanding at the present time would
have been as follows -
No. or shares.
Original capital OF the company. ............ 1900
Increased from March, 1862 to May 1854 by
the acquisition OF about 800 miles OF route,
the stock then selling at i50. ............. 1000
Consolidation of the United states Companys
lines when the stock was selling at 50. 49,. 10000
tonSOluAllON Ol Inc tnlteu Sbalcs fdCiNc
lines when the stock was selling III To-. 5000
Consolidation OF the American Company's
lines when the stock selling at ~. 900
Stock dividend and fractions. .............. 5000
Purchase VI securities Of other lines. 4s9i
Right 10 Issue stock for extension and improve
menfs paid out OF the earnings and other
resources OF the company ................. L. 500
Making the total number OF shares. ...... $4,000
These eighty-ive thousand shares at par
would make capital Of eight millions and
half, which is all that is honestly represented
by the company, exclusive Of the watering
processes and stock bargains on consultations
and purchases by which some Of the managers
and manipulators have become millonnaires.
These facts show at glance the Importance to
the people Of securing Geographic liues hon
estly constructed. and prove the great impor-
lance of the provisions in Washburnes bill to