The Iola register. [volume] (Iola, Allen County, Kansas) 1875-1902, 1884-05-30
POSTAL TELEGRAPH.

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Report or the Senate Committss--A Re.
view Of the Present Telegraph system-
Extraordinary Powers of the Western
Union. ftetI f.'t #t.
WAsHINaroN, May 23.-The report Of
the Senate Committee on Postoffices and
Post-roads ON the, subject Of postal tele-
graph has been completed by Senator Hill.
It gives history Of the increase of debts,
rentals and capital stock Of the Western
Union Company and the value of its prop
erty, leased and otherwise, and says the cap
ital stock of $50. 0OO, 900 has arisen to nearly
the whole of it from stocks, dividends and
from purchases made of lines Of other CONF
panies, which were paid for by issues OF
stock. 1t is evident, the report continues,
the prices which the Western Union paid in
its stocks for competing lines were vastly in
excess of either cost or earnings. 1t was
claimed before the committee by the West
ern Union that it had from time to time ex-
pended out of its current earnings consider
able money on construction account; that is
to say, in addition to its lines and equip
ments over and above their maintenance.
This may be true to some extent but cannot
be true to an extent justifying the enormous
stock dividends which the company has
made, nor was the appropriation of the cur
rent income to the construction account suf-
ficient to prevent the payment of
munificent cash dividends to share
holders, who received i'm that way from
1867 to 1885, both inclusive, S34,000.000
in addition to stock dividends of $40, S07, 100.
As the process paid by the Western Union
in its own stock do not furnish even an APP
prOXimate idea of the actual cost of the
lines which it has purchased from other
companies and as representatives of the
Western Union, which alone possesses the
information, have given no definite or de-
tailed account of the amounts of money it
has itself expended in the construction of
lines, the committee have endeavOred to
ascertain what 1t would now cost to repro
duce lines equal III every respect to those
which the Western Union have acquired on
all ways. The committee believes it to be a
large estimate to assume that the number of
miles of wire actually used and necessary
to its business of transmitting kilograms is
5000. The committee believe also that
the average cost of the wire, in
Guiding poles, construction and i'm.
struments for telcgraphing would not
exceed seventy dollars per mile, which
would make the total cost S24, 5000 The
exact excess of capitalization of the Western
Union beyond the actual cost of its lines,
and beyond what it would now cost to re-
produce similar lines cannot be determined.
That it is enormous is entirely plain and
undisputed. In reference to inquiry whether
this excess of capitalization. arising from
stock dividends and from purchases of other
lines at inflated prices paid in stock, has
operated injuriously i'm the way of incfeas-
ing the charges of the Western Union for
the transmission of kilograms, the com
mittee deem it sufficient to say their own
conclusions correspond with the opinions of
the country that its effect in that direction
cannot be matter of doubt, and that it has
been very great. The swollen capitalization
of the Western Union has created at one
and the same time cover, an inducement,
and in some senses necessity for excessive
charges for kilograms. So long and SO far
as the public has been made to believe the
nominal capital was real one, it has ten
ded to induce acquiescence in excessive
charges, while the exposure of the actual
nature of tile nominal capital does not di.
minish the pressure of the motives which
impel the manager of the company to KEEP
up the charges which are essential to the
maintenance Of the present dividends upon
the immense mass of its watered stock. Fol
the purpose of relieving the country of the
burden Of the charges for kilograms, which
are too high, of making their charges more
equal as between different localities and
different classes of kilograms, and of guard
ing against the mischief and dangers of
having the control of the telegraph business
of the country in the hands of pri.
vate company which enjoys practical mo
nOpOly the committee have reported the ac-
companying bill. The report says the con-
stitutional right of the Government to
establish a postal telegraph is undoubted
and that there are obvious and sufficient |
answers to the objection that such line will
operate injuriOusly upon private telegraphs. |
The report asserts that the passage of the |
postal telegraph bill will reduce the average !
charge per telegram from thirty-nine cents |
to twenty-five cents Immediately and to |
twenty cents in five years and secure uni
form charges irrespective of the amount of
business in different places for kilograms to
and to commercial news asso
and continues as follows: Under |
the present telegraphic system the DOS
sibility of a species of censorship which is
one of the most alarming dangers which
menace the country arises in two dis
tnct ways, each of which requires a sep
arate consideration. The first is the power
which telegraph companies themselves have
in manipulating news ''for sinister pur.
poses," and second is the same power pos
SeSsed by the Associated Press and other
similar associations, not themselves owning
telegraph lines, but making special COM
pactS for the transmission of kilograms oveI
lines owned and managed by others. 1t will
appear that the power of the telegraph com.
many fhiS racnaof will ba apfiraI1- TO -a,,
away by the pending bill, and that the power
of the Associated Press and similar associa-
toni will be greatly reduced. For the pur-
pose, the report says, of giving fabulous for
tunes to its inside managers and their
friends, the Western Union need not send
untrue marked quotations. 1t has only
to give true quotations single hour,
or less than that, in advance to
those whom it means to favor ana
the work is effectually accomplished. No
such power should be allowed to exist in
this country. If no past abuses can be
shown to have occurred, or even if believed
there have been, in fact, no abuses of it,
the temptation to abuse it is enormous, and
will sooner or later prove irresistible. The
bill will effectually take the power away
from the Western Union or any other pri.
sate telegraph company by the low rates
which it secures to everybody, and by still
lower rates which it secures to commercial
Competition in furnishing
commercial and financial news to all points
and places is not to be expected under this
bill, but it will be sufficient if it insures as IL
s sure to do, competition i'm furnishing
'uch news to more important places whereby
he field for profitable tampering with pub
ic intelligence will be so narrow that the
emptation will no longer constitute SEN
ible danger. HrrI