St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1884-05-23
WESTERN UNION.
The Great Telegraph Monopoly De-
scribed, With Some Errors,

SCflUGu, WlUn SOIlG EfIOrS,
By Senator Hill for Committee Report to
the Senate.
| WASHINGTON, May 22.-The report of senate
| committee on postof1ces and post roads, the
| subject of postal telegraph, has been completed
| by Senator Hill. 1t gives q summary of the his
tory of the increase of debts, rentals and capital
stock OF the Western Union Telegraph company,
and the value of its property leased and other
wise, and says the capital stock of $780, 900 has
arisen, nearly the whole of it, from stock divi-
dends and from purchases made of the lines of
other companies, whice were paid for by the is
sue of stock. 1t is evident, the report continues
the price which the Western Union paid in its
stock for competing lines were vastly in excess
of either the cost or earning capacity of the
| property acquired. 1t was claimed before the
| committee by the president of Western Union
company, that it had from time to time expended
out ofits current earnings considerable money on
construction account, that Is to say, in addition
| to the lines and Improvements over and above
their maintenance. This may be true to some
extent, but it cannot be true to an extent justi-
flying the enormous stock dividends which the
company has made, nor was the appropriation of
the current income to construction account suf
| fcient to prevent the payment of munifcent cash
dividends to its shareholders, who received in
| that way from 1867 to 1884, both inclusive, S34,-
600, 600, in addition to stock dividends, S25 S07-
| 100. AS the prices paid by the Western Union
| company on its stock do not furnish even
approximate idea of the actual cost of the lines
which 1t has purchased from other
panes, and as the representatives of the
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 it
would now cost to reproduce lines equal in every
respect to those which the Western Union has
acquired in all ways.
| The committee believe it to be a large estimate
| to assume the number of miles of wire actually
used in, and necessary to its business for trans
mitting kilograms, is 100000. The committee
believe, also, that the average cost of the wire,
including poles, construction and instruments
| for telegraphy would not exceed $40 per mile,
which would make the total cost S24,-
100000. The exact excess in the capi
talization of Western Union beyond the actual
cost of its lines, and beyond what it would now
cost to reproduce similar lines cannot be de-
termined. That it is enormous, is entirely plain
and undisputed. The reference to the inquiry
whether this excess of capitalization, arising
from stock dividends, and from purchases of
other lines at inflated prices paid in stock, has
operated injurously in the way Of increasing
charges by the Western Union for the trans
mission of kilograms, the committee deem it suf-
ficient, to say their own conclusions correspond
with the opinion of the country that its effect in
that direction cannot be a matter of doubt. and
HOO,
ton of the Western Union Co., has created at
one and the time a cover and
inducement, and in some senses the necessity
for excessive charges for kilograms. So long as
and so far as the public have been made to be-
lieve the nominal capital was the real one it has
tended to acquiesence in excessive
charges, while the exposure of the actual nature
of the nominal capital does not diminish
the pressure. The motives which
mpel the managers of the company are
to keep up charges which are essential
to the maintenance of the present dividends up
on its immense of watered stock For
the purposes of relieving the country from the
burden of charges for kilograms which are too
high, and of making those charges more equal
as between different localities and different clas
ses of kilograms, and of guarding against the
mischief and dangers of leaving the CO ntrol of
the telegraphic business of the country in the
hands of a private. company, which enjoys a
practical monopoly, the committee have reported
the accompanying bill. S. 2,022.
The report says, the constitutional right of the
government to establish postal telegraph is un-
doubted, and that there obvious and sufficient
answers to the objection that such a line will
operate injuriously upon private telegraphs
The report asserts, that the passage of postal
telegraph bill will reduce the average charge per
telegram from 80 to 25 cents Immediately, and to
90 cents in five years, and secure uniformity of
charges irrespective of the amount of the bust
ness in different places for kilograms to news
papers and to commercial news associations, and
continues as follows: Under the
present telegraphic SYSTEM the pos
sibility of a species of censorship, which
is one of the most alarming dangers which menace
the country arises in two distinct ways each of
which requires separate consideration The first
is, the power which the telegraph companies
themselves have in manipulating news for sin
lister purposes, and the second is, the same
power is possessed by the Associated Press and
other similar associations, not themselves
owning the telegraph lines, but making special
compacts for the transmission of kilograms over
the lines owned and managed by Others 1t will
appear that the power of the telegraph company
in this respect will be entirely taken away by the
pending bill, and that the power of the Associat-
ed Press and similar associations will be greatly
reduced. For the purpose, the report says, of
giving fabulous fortunes to its in
side managers and their friends. The
Western Union need not send
untrue market quotations. 1t has only to give
true quotations for single hour, or less than
thau that, in advance to those whom it means to
favor, and the work is effectully accomplished
No such power should be allowed to exist in
this county, even if past abuses can be
shown to have occurred, or even if it is believed
there have been 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 private telegraph company, by the low rates
which it to everybody, and the still lower
rates which it secures to commercial news asso-
Citations. Competitionin furnishing commercial
and financial news to all points and places
is not to be expected under this BILL but will be
sufficient if it insures as it is sure to do
competition in furnishing such news to more
important places, whereby the field for profitable
tampering with the public intelligence will be so
narrowed that the temptation will no longer con-
stitute a sensible danger The report has not
yet been made the subject of formal vote. but
it is given out for publication to-day as express
sive of the views of the majority of the com
mittee.
A Large Mortgage.
NEW YORK, May 15.-Amos S. Emo mortgaged
| tho Fifth ayaT1ua hnta1 rropartr