The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1884-02-09
THE TELEGRAPH MONOPOLY.
Argument of Gardiner G. Hubbard Before
the Senate Committee.

made argument before the Senate committee on
postofices and post-roads, to-day, upon the gem
eral subject of postal telegraph, and particularly
in answer to the recent argument of DR.. Norvin
Green. He said under the pressure of discus
sion, the Western Union company, according to
the admission Of its president, had been forced
to begin the work of reducing rates and improv-
ing its methods. Between the years of 1868 and
1878, the average rates had been reduced from
ST.. Oh to 80 cents per message Under this re-
duction the number of kilograms increased from
5000 900 to "a, 900, 900 per annum and the profits
from $3.50, 900 to So, 500, 600. Then a change had
taken place in the policy of the Western Union
company by which other lines had been alb
sorbed, and the reduction of rates ceased.
From 1873 to the present time the reduction of
rates only nine mills per message.
Was this the way to treat the publicl
Did not the Western Union company know that
new competition would be bought out! The
whole history of the company, with the eXcep-
ton of the period from 1868 to 1878, would teach
this. 1t was this course of the Western Union
that had led the public to ask if the stockholders
had not Jared well enough, and if now the pub
lie had some rights in the premises Telegraph
business was bound to be a monopoly, whether
carried on by the Western Union company or
not. 1t was true we now had new companies.
Garrett would come before the committee to-
morrow, and say he does not propose to be
bought out. So he said in 1873 when he had
built another set of competing lines, at cost of
81, 100000, and subsequently sold them to the
Western Union for $15, 600, 600.
j. G. Reffny, interrupting, statedthis was in
correct Garrett allied his lines with the Ameri-
can Union, but when the American Union was
sold to the Western Union, Garrett refused to
allow the Baltimore g. Ohio lines to be trans
ferred, and they remain intact to-day.
Mr. NH apd cai6 thp
were built and managed as proposed in the bill
by the chairman of the committee (Senator Hlll)
there would be annual deficit, which the
Treasury would pay, and private lines would be
swept away.
Mr.. Evarts had maintained that the govern
ment should not go into this matter unless it
purchased the existing lines. This he (Hubbard)
would agree to, if the Western Union lines had
been built by the contribution of stockholders,
but this was not the case. In 1866 the Western
Union had $4,000 miles of wire In 1883
it had 432, 900 miles, and not dollar of money
had been so contributed. All was paid for by
the public in addition to the dividends to the
stockholders In answer to an inquiry by Sen
ator Palmer, Mr. Hubbard said he supposed the
stockholders of the Western Union had actually
contributed in money about $500, 900; that the
contributions of Western Union stockholders
and others who had built competing lines, now
a part of the Western Union, was altogether
about $4,000, 900.
Senator Hill asked what grounds the speaker
there would be an annual deficit.
Mr.. Hubbard said in reply that the average
cost of sending telegram was twenty-five cents.
Fourteen cents of this was for operators,
which proportional in some
way to distance, while the remaining
eleven cents was for messengers and office ex-
penses, in respect to which distance was not
material The average distance for kilograms
was 300 miles message sent a shorter dis
tance was handled at smaller expense, while
for distance of more than 300 miles the expense
of handling it was above the sum named Now
the uniform rate wouldn't increase the volume
of business for a short distance because rates
were already below the proposed rate. The in
crease would be entirely on messages for long
distances. The true policy under such bill
would be to have two rates. one each for short
and long distances.
Senator Palmer referred to what might be
termed the moral aspect of the question The
most difficult feature, he said, of the whole ques-
ton was innocent purchasers had invested their
money in this stock He asked how should that
matter be dealt with.
Mr. Hubbard said in reply, that when the in
nocent lie down with the guilty they must suf-
fer the consequences These purchasers had as
ISOLATED themselves with the guilty. The West
ern Union, fifteen years ago had said neither the
capital stock nor the bonded debt should be in
creased except by the consent of wo-thirds of
the stockholders This pledge to the coun-
try. They kept that pledge for time and rates
were reduced. They changed their policy in
1881 No one would object to pay for this stock
before these consultations. Was it supposed
these innocent stockholders" didn't get their
share of this watered stockl There were no Gin
nocent stockholders. "
Senator Hill remarked that no one would ven
tllre to assert that Congress- in the interest of
the public, could not disregard these stockhGld-
ers and establish a telegraph system for the con
venience of the whole people. There were only
about 2, 800 stockholders of the Western Union,
and one man owned more than half the stock
H1bb said too
high for the general public. The business com
munity were well served, but the people at large
reaped no benefits from the telegraph. Mr..
Evarts had said that the Western Union for
warded messages in the order in which they were
received. This was only theoretically true. But
there was something of more vital Importance
than anything yet presented What were the
relations of the Western Union to the people of
the country in their social and political nterestsY
The Western Union was controlled by three or
four gentlemen in New York 1t controlled the
market prices and all political and general news
sent over its wires-every single important per
sonal communication sent in the country.
This company was controlled by no law except
the interests of its owners. No State could
pass a law which would have any effect
this corporation. Was there any other like pow
er in the world} 1t would handle 100, 900. 900
messages ten years hence Through its agency
it collected market news in London and Paris.
4 fraction of penny on pound of cotton
fortune to any man They admitted no partner
in this business. He made no charges, but he
believed this was too large power to intrust to
any man any company. How was it with the
pressl The Western Union Telegraph Company
and the Associated Press made close corpora
ton. He did not mean to say there was any
fault to be found in the present management.
Some time ago two papers in San Francisco
advocated postal telegraph. The rates to these
papers were increased. One paper died in con
sequence, and the other ceased to discuss the
matter A paper which once criticised Orton's
course found its rates doubled. the next day.
This was the power this corporation held. DR..
Green had said the Western Union would be
glad to come in and bid for service. He Hub
bardl would favor the Introduction of provision