New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1881-01-16
THE TELEGRAPH UNION.


DISADVANTAGES OF THE PLAN--wBAT. MEMBERs
| "F THE COTTON EXCHANGE MEAN 10 Do =, !
Full details of the plan for q union of the
telegr pm companies will not be made public
until they have been approved by the
of the Boards of the Western Union
end Atlantic and Pacific have been
] c lied for Wednesday. No meeting of the
DIR ctors or stockholders of the American
. UnOn Company had been called yesterday.
A meeting was held at the Cotton Exchange
tn protest against the consolidation. Il was
stat'd that rival companies would soon he in
aciIve operation.
DIR. NoRvIN GREEN'S STATEMENT.
| President Green, of the Western Union Telegraph
Company, yesterday admitted TRIBUNE reporter.
in search OF details of the proposed consolidation, to
his Office, the express condition that questions
snond be asked. He began by saying:
| "A treaty has been signed between tho different
telegraph companies. do not wish to say anything
about he terms of the agreement for do not think
tnst the public entitled to information In regard
TO the details before they have been submitted to
directors. 1t is sufficient Tor this course
t.,at the agreement already made is merely recon-
mandatory it was made by representatives Of tho
| coup pinies in an Unofficial capacity"
e do not understand the meaning Of that expres-
sin. said the reporter without the highest accent
I VI interrogation.
II mean that the committees Of the different
were not appointed for the special purpose Of
con idering this agreement. On the part of the
| Wcs ern Union Company the committee was the
regular Law Committee; the subject properly camo
tore that committee because there are many legal
controversies between the companies. great deal
OF IN ,ney has been spent in counsel fees and in the
consul a ION recently was asked by director Of
tie American Union Company how many lawyers
iii company had employed. ! replied that the
W stern Union Company had engaged all the law
yers that the American Union had not previously
employed.
$50 far as am personally concerned" DIR. Green
20 tinued, 81 shall advocate the making public the
conditions of the treaty after the approval of them
| by The boards at their meeting next Wednesday.
| The Ockhoders of this company are widely scat
tered and to publish the terms in yonr paper the
| b 81 way of reaching them. OF course, we shall
send out circulars to each of them, but they will
naturally look to the public prints for the earliest
| information 10 regard to the matter. This is all I
wish TO say the subject but think 1T proper to take
notce Of the attacks recently made by the New
York papers on the capitalization OF the new
company. 1t is asserted by The Herald that tho
| entire llueS Oh Inc CuiOn Nompahy SJu'u oo
duplicated for $17, 100000. By my last annual re-
port 1t is shown that 6.9G9003 55 has been eI-
D .nded on the plant of the company since 1866.
Ipls sum has never been capitalized. In fact, tho
capital stock of the company has not been increased
| IN fourteen wears. The distribution OF stock made
a while ago was not an increase of capital; the
! stock had been bought and was held ia the COM
pany's treasury.
| ADVANTAGES OF THE PLAN.
| But the proposed capitalization of the new com
pany at $50 600 600 does not contain one. half the
water which the stocks of some of the mammoth
railroad corporations of the country have received.
OF coulse do not like to throw bricks, but am
sure that the plant of OF the trunk lines OF
railroads which have $s0.00O,OO0 in stock and
$50 600. 900 in bonds can be replaced at from 10
TO 10 per cent of their present capital And in re-
gard to the earnings of the consolidated companies,
experience and figures prove that the
united companies can earn respectable
dividends. The gross earnings Of tins
| company last year were $l27SZ.Sof o3.
Those of tho Atlantic and Pacific Company were
about $3.50 OOO-which makes the gross receipts oi
the two companies about S13,5000OO. suppose
now that estimate the earnings of the Americana
| I'm on Company az $50OOOO, the gross earnings OF
unite uni "a are, d in round NUM- bars, $il,OO0OoO.
eaTnns' a cOmDetns rtes The expenses
of ms company last wear were So 9lS 9j3 n, and
it is believed that without the expensive uxury OF
competition the united companies can DC operdIeo
Bnt let us suppose that there shall be an addi-
tiona cost of operation OF $o0OO0O or Soo0'00vV
The expenses will amount then to about ", ,oOO,O0
| which viii lelye net earnings or aoout
$4,000 00O and that too, on the basis OF last years
| business. The chances. certainly, are very great
thai the earnings will lie increased at least $500 600.
| which will make the ret earnings OF the united conl-
panies fully $700O00O OF thls,it @ili not I.quIfs
| IN
! sinking funds, and therefore the net earnings Will
be more than per cent Oh tue capitalizi ition."
| There wcra large payments last year for con-
structon account and Tor the purchase Of patent
| rights" was the statement of the reporter
''Oh, yes but these charges were larger on ac-
| count of the competition. It is impossible that q
lik. amount will be required for construction tor
many years, and for the purchase OIL patents the
expenditure will be much less naturally, for there
Ii has been this rivalry that bas tended 10 ncreaso
! the charges on this account ., ,,..,,
| New companies have been already cstaDisneo''
| CHANCES OF OPPOSITION.
"Well we must take our chances of competition
| i'm the future. There il not much to dread in this
| wav Those who were engaged in the vigorous
| competition of the American Union Company have
| since confessed that il was exceedingly hard
| road to travel. Why! 1t has taken the company q
wear TO get to Philadelphia In fact there is very
htte room Tor more telegraph lines IN this country.
The Western Union did not begin to feel the effect
of the recent competition until December, although
| the American Union Company had been established
! ahont two wears And the present earnings warrant
heallhy dividends; We earned nearly 20 pei cene y"
wy For the last fourteen years." DR.. Green con-
tinued this company has eadiiy reduced its rates
The reduction has been accelerated at times Dy COM
netItlon. but in the contest with the American
| tJnon Company rates have never been reduced 70
| what We call war rates. In consequences Oh this
thrre IA no one who now favors increase IN rates.
| Indeed It Is more likely that further reduc-
| ton will be made at competitive points. lners
| will be an increase in che 10 cent rates,