The Red Cloud chief., 1884-05-30
POSTAL TELEGRAPH.

Report Of the Senate Committee-A Re-
view Of the Present Telegraph System-
Extraordinary Powers OF the Western
Union.
WASHINGTON, May 23.-The report Of
he Senate Committee on Post-ofiices and
Post-roads on the subject of postal tele-
graph has been completed by Senator Hill.
1t gives a history of the increase of debts,
rentals and capital stock of the Western
Union Company ami the value OF its prop
,rty, leased and otherwise, and says the cap
ital stock of $50, 900, 600 has arisen to nearly
The whole of it from stocks, dividends and
from purchases made of lines of other COM
panies, which were paid for by issues OF
stock. Ii 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 eN-
pended out of its current earnings consider
able money on construction account; that is
TO say, in addition to lis lines and equip
mentS over and above their maintenance.
This may be true TO some extent, but cannot
be true TO an extent JuStlfylng the enormous
stock dividends which the company has
made. nor was the appropriation OF the cur
rent income 10 the construction account suf-
fic.ent 10 prevent the payment OF
munificent cash dividends 10 share
holders, who received in that way from
1867 Ia ISS3, both inclusive, $4,000 600
in addition TO stock dividends OF S2O,SO1 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
l;,,-. ,,.s.l, - hn.- ,,tVal,aSaI fran ntlar
companies. and as representatives of the
Western Union, which alone possesses tine
information. have given no definite or de-
tailed account of the amounts of money 1t
has itself expended in the construction of
lines. the committee have endeavOred TO
ascertain what il you'd now cost u repro
duce lines equal i'll every respect to those
which the Western Union have acquired on
all ways. The committee believes II 10 be a
large estimate To assume that the number or
miles of wire actually used and necessary
Ia its business of transmitting kilograms is
$4,000. The committee believe also that
the average cost Of the wire, i'll
ending poles, construction and III
strurlentS for telecraphing would not
exceed seventy dollars per mile, which
would make the total cost 81, $50. 900. The
exact excess OF capitalization OF the Western
ulbu ltN Ouu Tie d'IuGl NOSl VI IS Illus.
and beyond what it would now cost To De
produce similar lines cannot be determined.
That it is enormous is entirely pain and
u~ndiSputed. In reference To inquiry whether
this excess OF capitalization. arising from
stock dividends and from purchases of other
lines at inflated prices paid i'll stock. las
operated injuriOusly in tine way of increaS-
ing the CHARGES of the Western Union for
the transmission Of kilograms, the ON
!nittee deem il sufficient 10 say their own
conclusions correspond with the opinions of
the country that its effect III that direction
cannot be a matter Of doubt. and that il has
been very great. The swollen capitalization
of the Western Union has creatci at one
and the same time ii cover, an ~lndlcelnent,
and in some senses a Necessity for excessive
charges for kilograms. =" long and so Tar
as the public has been made 10 believe the
nominal capital was Il real one, Il has ten
rlc,i TO induce acGuieScence iii excessive
charges. while the exposure OF the actual
nature OF the nominal capital does not d.
minish the pressure of tine motives which
iInpel the manager al the company 10 KEEP
up the charges which are essential 10 the
maintenance of the present dividends upon
the immense mass of its watcred stock. Fol-
The purpose of relieving the country of the
harden of the charges for kilograms, which
are TOO nigh. Ut 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 i'll the hands nj a pr
vate company wl!irl enjoys a practical mo-
nopOly. the committee have reported the ac-
companying bill. The report SAYS the con-
s;ituIional right of the Government to
xS,klcel n ,AA-.,1 tAlar~,,l. - ,l,b.nI 2
and that there are obvious and sufficient
answers TO the objection that such a line will
operate injuriOHsiy upon private telegrapIls.
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 u secure uni
form charges Irrespective of the amount of
business in different places for kilograms 10
newspapers and Ia commercial news aSSO-
Citations. and continues as follows: Under
the present telegraphic system the DOS
Sibility of a species of censorship which is
one of tine most alarming dangers which !
menace the country arises in two dis !
tinct 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-
lTT-to- ANU SStoAli u" IsN HttlllC o"O JUS /
~essed BY the Associated Press and other
similar associations, not themselves owning |
telegraph lines, but making special COM
pacts for the transmission of kilograms over
lines owned and managed by Others. 1t will
appear that the power of the telegraph COM
pany in this respect will he entirely taken
away by the pending bill, and that the power
Of the Associated Press and similar associa-
toni will be greatly reduced. For the Dur
pose. the report says, of giving fabulous for
tunes 10 lis inside managers and their
friends, the Western Union need not send
untrue marked quotations. 1t has only
to give true quotations a single hour,
OF less than that, in advance to
those whom it means TO favor and
the work is effectualiy 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-
waite telegraph company by the low rates
which 1t secures to everybody, and by still
lower rates which ii secures 10 commercial
associations. Competition in furnishing
commercial and financial news to all points
and places is not to be expected under this
hin bps 4, ,,;tI hn a.. Ca &c : Z. ,,,.o- No.: /