National Republican. (Washington City (D.C.)) 1872-1888, 1884-05-23
THE POSTAL TELEGRAPH.
Report Of the Senate Committee in Favor
Of It.
How the Water in Western Union
Increases Telegraph Tolls,
Some Interesting Estimates Of the Probable Cost Of
Reproducing Its System.
The Several Advantages OF the Postal
Plan Reviewed.

state that the capital of tho Western Union
company is Ss0,OOO,0OO; its bonded debt is
S177S,000 bearing an annual interest Of
$l06,011, and tho annual rentals which IL has
assume obligations to pay for leased lines in
this country arc $525000, which leases capt.
talizod on the basis Of an annual interest of
O per cent, arc equal to a debt Of $3,S00000.
Its total share, debt, and rental capital is
therefore $780, 900, and its dividends, at
the rate of 6 per cent, require 1t to earn $5,-
| T0i,011.
| 1t is also under obligations to pay annual
rentals Of 100000 for Atlantic cables, and of
S3Ol,OOO for Cuban cables and for the gold
and stoc k company, being total of 81, lOO,-
900, which if capitalized at 0 per cent. in
tercst Is equal to debt of $16,6S3,000. But
| IL this leased property as O whole yields on
income equal to the rentals paid for it, it will
not be necessary for tho Western Union
company to impose tax upon the internal
! Geographic business of the company in order
to make good n deficiency. How much in
come IL does yiold does not clearly appear.
| The stock capital of tho company has nearly
all arisen from stock dividends and from
purchases made of the lines of other COM
panies. which were paid for by issues Of
stock.
Tho report here contains a history of the
successive leases, consultations of the COM
| pany from 1863, when its stock capital was
| $4,000, 900 to the present time
1t is evident the report continues, without
pursuing this branch of tho subject further,
that the price which the Western Union paid
in its stock for competing lines we're vastly
in excess of other the cost or earning capa-
city of the property acquired.
1t was claimed before the committee, by
tho president of the Western Union, that it
had expended out of its current earnings,
considerable money on construction account;
| that Ia IN In addition IN ifa l,naa nd
equipments, over and above their mainte-
II ance This may be true to some extent but
| cannot be true to the extent of justifying the
enormous stock dividends which the COM
pany mas made, nor was tho appropriation Of
current income to construction accounts
sufficient to prevent tho payment of muni6-
cient cash dividends to observation-disclosures, who
received, in that way, from 1867 to 1888,
(both incusive) S3l,00O,000 in addition to
stock dividends of $25,S07.1 100.
As tho prices paid by tho Western Union
in its own stock do not furnish even an
approximate idea Of tho actual cost of the
lines which it has purchased from other
companies, and as the representatives of tho
Western Union, which alone possesses the in
formation, have given no definite or detailed
account Of tho amounts of money 1t has
itself expended in tho construction of lines,
tho committee have underworld to ascertain
what it would now cost to reproduce lines
equal in oil respects to those of tho Western
Union. amounting In all to 43l 1913 miles.
Deducting wires leased to newspapers and in
other ways out of service to the company
the rentals not appearing in tho company's
receipts for kilograms, tho committee think
tho number of mills of wire would be re-
ducod to 100000. They believe the actual
cost of materials would not exceed $40 per
mile, which would mako total cost Of $24,-
100000 The exact oxcess of tho capitaiza-
ton of the Western Union, beyond tho
t..,I 800 ia, 1..,a, n..I had
would now cost to reproduce similar lines,
cannot BIO determined. That it is enormous
is entirely plain and undisputed. In refer
once to the inquiry whether this excess of
capitalization has operated injuriously in tho
way of increasing tho charges of the Western
committee deem it sufficient to
say that their own conclusions
correspond with tho opinion of the
country, that its effect in that direction can
not be q matter of doubt, and that it has
been very great. The swollen capitalization
of the Western Union has created ut one and
the same time q cover a. inducoment, and
in tho Same senses necessity for excessive
charges for kilograms So long az, and so far
as the public have been made to believe that
tho nominal capital was q real one 1t has
tended to cause an acquiescence in excessive
charges, whilo the exposure of the actual
nature of tho nominal capital does not
impel the managers of the company to keep
up charges which are essential to the main
tenanco of the present dividends upon the
immense mass of its watered stock.
For the purposes of relieving the country
of the burden of charges for kilograms which
are too high, of making those charges more
equal as between different localities. and
different classes of kilograms, and of guarding
, against tho mischief and dangers OF leaving the
control of the Geographic business of tho coun.
try in the hands of private company which
enjoys practical monopoly. the committee
have reported the accompanying bill (S 2022)
} The constitutional right Of this government
to establish n postal telegraph, under its
power to establish postotlices and postroad5
seems too clear to require argument. 1t has
always been recognized and tho first tele-
graphic line in this country was constructed
and operated and owned by the United
States.
The advantages to be expected from the
passage of the bill, the report asserts, are as
follows:
l. 1t largely reduces the average charges
now paid by the public for telegraph serv-
J ices. u Taking all the evidence to-
} gether, it must be very near tho fact to say
that the reduction made by tho bill in the
} average charge per telegram will be from IS
cents TO 25 cents Immediately, and to 20 cents
at the end of five years
Q. The plan inaugurated by the first ten
| beCLlOnS OIL Unb Dill bcGuTtb during luD HTSl
five years an absolute Uniformity of charges
for day kilograms within all distances not
exceeding 1000 miles, and for night tele.
grams within all distances not exceeding
1000 miles.
3. Tho plan provided in this bill secures,
from tho commencement Of its operation, O
uniformity of charges irrespective of the
amount of business in different places fol-
kilograms to newspapers and to commercial
news associations.
A, Tho bill, while it may not wholly re-
move, does, to an important degree, lesson
the danger that the puryoyng and prepara'
ton of the intelligence sent to newspapers
, and TO commercial news associations will be
subjected TO concealed censorship, whereby
IL may DO colored and distorted SO rs to sub
servo political purposes to mislead public
opinion as TO tho merits or dement's of mon
and measures, TO prevent legislation, and to
favor schemes of private gain. Under the
present telegraphic system tho possibility oil
= such species Of censorship which is one OF
the most alarming dangers which menace
= tho country, arises in two distinct ways
each of which requires n separate cOnsidera.
ton. The first Is tho power which the
telegraph companies themselves have oil
manipulating news for sinister purposes and
, the second is the same power possessed by thC
Associated Press, and other similar associa
; tions, not themselves owning telegraph lines
but making special compaCts for transmission
of kilograms over lines owned and managed
by others. 1t will appear that the power Of
4 II IN ha