, 1881-01-16

| wiped out by an equal number Of non-Yoters,
who do not understand our laws OF language,
and do not care to assume the responsibilities
Of citizenship. = :.
THE NEW TELEGRAPH MONOPOLY.
a Chicago newspaper has advanced the re-
markabie opinion. In Quasl-defense OF the
amaignmat1on OF the Western Union and
American Union Telegraph Companies re,
Gently announced, that. the interests Of the
| public are not affected whether the telegraph
business be uone by one company or more.
| II this view be correct, it can only be based
upon the theory promulgated some years
ago by Mr.. Charles Francis Adams In regard
to the railroads ds-yiz.: that competition in the
telegraph business means combination. In
such case the logic Of the situation and the
principle of self-preservation require that
the Government shall step in and furnish
| the people the protection against extor-
| ton, injustice, and oppression which 1t
| is the duty Of Government to pro-
vide whenever such oppression is practiced
| through the agency of public privileges and
franchises. This is the view whictFis rap
idly forcing ftsQn upon the American people,
and which the new monopoly, If managed as
monopolies always have been heretofore,
will bring to practical and aggressive mani
festatiou. It is safe to assume that Messrs.
Jay Gould, Vanderbilt. and the other bened-
ciaries OF the recent combination will agree
upon the uniform policy Of monopolies.
which is to exact from the public the largest
amount of money for the smallest amount OF
service. If it shall be found that more money
can be earned by doubling the rates.-or. In
other words, that business will not fall OIL
nproportion,-thent the rates will be doubled.
The maximum OF profit At the minimum OF
service will always be the rule Of every cor
poration which has neither competition nor
Government regulation to restrain the greed
Of lis managers and owners. 1t is not to be
expected that a vast monopoly like the West
ern Union Company, in the absence Of all re-
straint, will depart from this rule.
Another reason why the new telegraph
monopoly will be tempted 10 place the high
est collectible rates upon Its service IS, that
it will undertake to pay dividends upon $780,
GOO Of stock, though its ''plant" does not
represent an investment Of more than $20,-
100000. In ether words, it will undertake to
earn four times as much as would be repre-
sentcd in legitimate and prevailing Interest
Oil the capital invested. That thisstatenlent
Of the case is not exaggerated may
be shown from a cursory review OF the
frequent watering Of Western Union stock.
The story was told some three years ago,
when the people were urged to subscribe
their money and give their support to the
establishment and maintenance Of the oppo-
I'll ;ot, oil fc
has now been absorbed into the old monop-
oily, and has thus afforded another oppor-
tunitY for increasing the capital stock. The
present Western Union Company started in
1851 under the name Of the New York &
Mississippi Valley Printing Telegraph Com
pany," and built some 600 miles Of line at a
cost of $3.50, GOO. Two years later 500 miles
Of additional line were secured by purchase
from the Lake Erie Telegraph Company, and
paid for in bonds which were subsequently
provided for out of the earnings. Other
lines were secured from time to time in the
same way, and the stock Of the Company in
creased on the basis of the price paid in
stock, aud not upon the actual cost or value
Of the property obtained. Stock watering
began in 1855, when stock dividend was de-
clared OF 414 per cent, and thus Quadrupled
over the amount Of the actual Investment.
Tie stock, now Increased to 81, ,5as, 500, was
again watercd q per cent in 1869. which
brought it up to s., 97o, 800. Less than year
later another stock dividend Of 100 per cent
was made, thus doubling the nominal capital,
and making it nearly S6,0C0,000. Another
stock dividend of 33H per cent was added be-
fore the close OF 1868, and the nominal cap
ital thus became $4,000, 600. Not long after
$1,000 600 were added to represent purchased
lines. In 1sG4 the capital was doubled again
by stock dividend, and during that year in
creased to So, 000, 600. From that point it
was run up gradually till it amounted to
over S4l, 900, COO in 1878, from the small be-
ginning Of s3G0,C0 The cash dividends
we're enormous during all this time In 1858
they amounted to n per cent, in addition to
the Ala per cent stock dividend. From 1855
to 1856 they averaged Z per cent on the entire
capital stock, water and all. Between 1866
and 1877 the net profits were stated to be |
So, 59, 1896, Of which over Sl2 600 COO were de-
clared in dividends. The recent arrange
ment for the consolidation Of the telegraph |
companies is stated to be on a stock basis Of |
$50, ,Ooo, GOO for the Western Union, S17.ooo.ooo
for the American Union, and S1o,0oo,o 900 for
the Atlantic 4 Pacttic,--or the enormous sum
of sSo, 600 600 capital stock, which represents
the addition Of no. material or facilities that
were needed by the old company.
The peculiar significance of this history |
Of unparalleled stock watering will be found |
In the additional statement that Jay Gould is |
now likely to change his policy, and, instead
of organizing new companies to force ulti-
mate purchase and amalgamation, heis likely
to control the management Of the CONSOLE
dated companies in such way as to arouse
public indignation, ard with the deliberate
purpose Of forcing upon the Government the
purchase Of the lines at the nu1ninal Unlue
of the cdpitll stock. It has been reported
more than once that Jay Gould has declared
that he will pinch, and squeeze, and twist
tile public until it sQueals, and that then Con-
gress will buy out the telegraph companies
at their own nricn This nurnOSh of Mr.. Jaw |