Helena weekly herald. [volume] (Helena, Mont.) 1867-1900, 1884-05-29
POST TELEGRAPH.
Interesting Report from the Senate
Committee on POstOfiices.

nroperty leased and otherwise, and says the
capital stock, $SO,000,O00, has arisen, nearly
the whole of it, from stock dividends and
from purchases made of lines of other COM
panies which were paid for by issues of
stock 1t is evident, the report continues,
that the prices which the Western Union
paid in stock for competing lines were vast
ly in excess of either the cost or earning
capacity Of the property acquired. t was
claimed before the committee by the Presi-
dent of the Western Union that it had from
time to time expended out of its current
earnings considerable money on cOnstruc-
ton accounts, that is to say in addition to
it's lines and equipment over and above
their maintainence. This may be true to
some extent, but it cannot be true to the
extent of fjustifying the enormous dividends
which the company has made, nor was the
appropriation of the current income to the
construction account sufficient to prevent
the payment of munifcient cash dividends
to share holders, who received in that way
from '67 to S3 both inclusive) S34, 100000
in addition to the stock dividends of S25,-
SO7, 100. AS the prices paid by the Western
Union in its own stock do not furnish even
an approximate idea of the actual cost OF
the lines which it has purchased from other
companies, and as the representatives OF
the Western Union, who alone are In pos
session of the information, have gwen no
definite or detailed account of the amounts
of money it has itself expended Id the con-
struction of lines, the committee have en-
deayOred to ascertain what it would now
cost to produce lines in every respect equal
to those which the Western Union has ac-
uuired in all ways The committee believe
it no large estimate to assume that the
number of miles of wire actually used In
and necessary for the business of trans
mitting telegrams is 100000. The COM
mittee believe also that the average cost of
wires, including poles, construction and
instruments for telegraphing, would not
exceed so per mile, which would make
total cost of S24 100000. The exact excess
of Capitalization of the Western Union
beyond what it would now cost to repro
duce similar lines cannot be determined.
That it is enormous is entirely plain and
undisputed In reference to the inquiry OF
whether this excess Of capitalization, arls-
ing from stock dividends and from pur-
chases of other lines at inflated prices, paid
in stock, has operated injuriOusly IN the
way of increasing the charges OF the
Western Union for the transmission OF tele-
grams. the committee deem it sufficient to
saw that their own conclusions correspond
with the opinion 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 covert inducement, and In some
senses the necessity for excessive charges
for kilograms. So long as, and SO far as the
public has been made to believe the noml-
nal capital was a real one, it has tended to
cause an acquiescence in excessive charges,
while the exposure of the actual nature OF
the nominal capital does not diminish the
pressure of the motives which lmpel the
managers of the company to keep up char
yes which are essential to the maintenance
of the present dividends upon an immense
mass of its watered stock. For thepurpose
of relieving the country of the burden of
charges for teiegIams which are too high,
of making these charges more equal as
between different localities and differ
classes of telegrams, and Ofguarding against
mischief and the dangers OF leaving the
control of the telegraph business OF the
country in the hands of private COM
pany, which enjoys practical monopoly,
the committee have reported the ac-
companying bill.
The report says the constitutional right
of the government to, establish postal
telegraph is undoubted and that there are
obvious and sufficient answers to the OBJ
lection that such line will operate in
iuriously upon private telegraphs. The
report asserts that the passage of the
postal telegraph bill will reduce the aver
age charge per telegram from 80 cents to
% cents Immediately and 20 cents in five
wears and secure a uniformity of charges
irrespective of the amount of business in
the different places for kilograms to news
papers and to commercial news associations,
and continues as follows: Under the
present telegraphic system the possibility of
a species of censorship, which is one of the
most dangerous to commerce ,and the country
arises in two distinct ways, each of which
requires a separate consideration. The
first is the power which telegraph COM
panies themselves have OF manipulating
news for sinister purposes, and the second is
the same power possessed by the Assocl-
ated Press and other similar associations
not themselves owning telegraph lines, but
making special contracts for the trans
mission of kilograms over the lines
owned and managed by others.
1t will appear that the power of the tele-
graph company in this respect Will be en-
tirely taken away by the pending bill, and
that the power of the Associated Press
and similar associations will be greatly re-
duced for the purpose OF reporting sales,
giving fortunes to its managers and their
friends The Western Union did not have
to send untrue market quotations. 1t has
only to give the true quotations a single
hour. or less than that, in advance to those
whom it means to favor and the work is
effectually accomplished. No such power
should be allowed to exist In this country,
even If its abuse can be shown not TO nave
occurred. or even if it is believed that
there has been no abuse of it. The tempta-
ton to abuse is enormous, and will sooner
or later prove irresistible. The bill Will
effectually take the power away from the
Western Union or any other private COM
pany by lower rates which it secures TO
everybody. and by the still lower rates
which it secures to commercial assocla-
tions. Competition in furnishing CONNER
cial and financial news to all points and
places is not to be expected under this OIL,
but it will be sufficient if it insures, as 1t
is sure to do, competition in furnishing
such news to the more important places,
whereby the field for profitable tamperlng
with public business will be SO small tha'