, 1881-01-16

Stcdtd1o VIII Oe 1ufn1aneQ TO the PUBIC 1ue
capital of the new Company is to be s8,0o0,0oo,
and 1t is to issue $8,0oao0o Of bonds. 1t has
partly closed contract for laying two cables OF
phosphor- bronze, guaranteed TO transmit twen-
ty words Per minute euch, and to cost
Sa,oo0.0oo. Tho intention Is to charge 20
cents word to the general public
and less rate to the press FOR
this service TAT first the Company will build
land lincs to connect only the prlncipal cities
with New York. nnd will seek the patronage Of
business men and Of tho press only. No tariff
has been settled upon for that aerrfcc. but it
will be arranged on the basis OF
i FAIR PROFIT
on the. actual investment Arrangements had
been made with the Dominion authorities to
connect the land lines with the cables, which will
have their American terminus at or near Cape
Sable 4 clause in the Company S charter forhids
it to cotnbine with any other company in regard
to rates. or to sell out to consolidate with any
other company under penalty Of forfeiture.
There is fourth opposition telegraph COM
pany under way, under the title Of the Mutual
Union Telegraph Company. 1t is duly lncorpor.
atcd with capital Of $5,00o,0oo, and has as its
al Bank It has line now under construction
between New York und Boston.
PRESIDENT GREEN,
Of the Western Union Telegraph Company, sa1d
to-day: "A treaty has been signed between
the different telegraph companies I do not
wish to say anything about the terms
OF the agreement for do not think thnt
the public is entitled to information In regard
to tho details before they have been submitted
to our Directors. So fur rs am personally con-
cerned, shall advocate the making public the
conditions Of the treaty after tho approval OF
them by the Boards at their meeting next
Wednesday, This Is all wish to say on the SUBJ
ject, but think 1t proper to take notice OF
THE ATTACKS RECENTLY MADE
by the New York papers on the capitalization Of
the new company. 1t Is Inserted that the entire
lines OF the Western Union Company could be
duplicated for $l',oo0.ool BY my iast
annual report it Is shown that
$16,9o9 000+55 has been expended on the
plnnt Of the Company since 1sGG. This sum has
never been capitalized. 1n fact, tho capital
stock of the Company has not been increased In
fourteen years. The distribution OF stock made
while ago was not an increase of capital. Tho
stock had been bought aud was held in the Com
pany's treasury.
But THE PROPOSED CAPITALIZATION
Of the new Company at $so,0 100 does not con-
tain one-haf the water which the stocks OF
somo Of the mammoth railroad corporations
Of the country have received. OF
course. I do not like to throw
bricks, but am sure that the
plant OF some OF the trunk lines Of railroads,
which have $50, co., GOO In stock and s60 00D In
bonds can bo replaced at from 10 to Is per cent
Of their present capital. and in regard
to the earnings Of tho consolidated CON-
pauies. experience and figures prove that
the united companies cnn earn respectable
dividends. The gross earnings OF this Company
last year were $12,762, ,sD4.53- Those Of the At
lantic s. Pacific Company we're about $75o,0oo
which makes tho gross receipts Of the two conf
panies about S13,50o,00o.
SUPPOSE, NOW.
that re estimate the earnings of tho American
Union Company at $5o0,00o, the gross earnings Of
tho three companies which it is pro-
posed to unite arc, In round NUM-
bers, $l4,00o,0O0. These earnings we're
made, It must be remembered, at competing
ratos. The expenses Of this Company last year
were 1864 s95 674, and it is believed that, without
the expensive luxury Of competition, the
united companies can be operated at the same
expense. But let us suppose that thero shall be
an additional cost of operation OF $50o,0D or
100000. The expouseswill amount then to about
s5o0, 900, which will leave net earnings Of about
1850 ,0U0 and that, too, on tho basis Of last
years business-
THE CHANCES,
certainty, are rerJ great that the earnings will
be Increased at least S50D,000 which will make
the net earnings Of the united companies fully
$4,000 OF this 1t will not require
moro than s50O,o00 to provide for interest
ana sinking fund, and, therefore, tho net earn
tugs will be moro than : per cent on the capi-
talizahon. I can see nothing Mt present which
Ia likely to prevent the mplishment OF the
plan Of consolidation. Still it is impossible to
say what complications may arise before tho
legal approval Of the unIon.'