Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1884-05-23
P(STAL TELEGRAPH
Inc 'sport Of the Senate Committee on
tesabjcct Finally Completed
g By Mr.. Hill.
The bSefit Which Would Accrue to
the tublic from Such System
les The Danger
VI . Geographic Monopoly-The Ex'
tortiA Practiced by the West
era Union.

WAsHISoros, May 22.-The report O.
Senate Committee ON Postoffices and Post
roads on the subject of the postal tele
gr:ph, has been completed by Senator
Hill. 1t gives summary Shistory of the
increase of debts, rental and Consolidation
of the Western Union Telegraph Company
and the valhe oil its properly, leased and
otherwise, and says the capital stock oi
$50, 600, 900 has arisen, neariSS the whole oi
it, from purchases made Of lines ct othef
comrE1ies, which were paid FOR by ;ss,es
nf stock. 1t is evident, the report con-
tinues, that the prices which:the Western
Union paid in its stock for the competing
lines were vastly in excess either of ths
cost OF earning value of the property ac
quireds 1t was claimed before the com
mittee by DR., Norvin Green. president o
the Western Union Company, that 1t hat
from time to time expended out of it
the construction account, that is TO say, IL
additions to its lines and equipment, owe
and aboye their maintenance. This MAJ
b5 trtie to some extenti but cannot be true
to the extent of justifying tie e;iormou
stock dividends which the company ha
made, nor was the appropriation o
the current income to the construction &C
count sufficient to prevent the paymen
of munifcent cash dividends to the 6hire
holders, who received in that way from
1867 to 1888, both inclusive, S34, ,00Oi il
addition to stock dividends of $25, 5,S07, 100
As the prices paid by the Western UnioI
in its own stock do not furnish even al
approximate idea of the actual cost of tn,
lines which it has Purchased from Uthe
companies, and as the representatives O
the Western Union, who alone possesse
the information, have given no definite o.
detailed account of the amounts of none,
it has itself
EXPENDED IN THE CONSTRUCTION OF LINES
The committee have endeavored to ascer
tain what it would now cost to Reproduce
a line equal in every respect to that which
the Western Union has acquired in al
ways. The committee believe it to be
large estimate to assume that the nuinbe
OF miles of wire actually used and neces
sary to rs business of Transmitting tele
grams is $4,000. The committee believe
also, that the average cost of the wire, ii
Guiding poles, construction and instru
ments Tor telegraphing, would not exceed
500 per mile, which would make the to
/ tei SOot EXACT cdDlldilZd
Isfion. ofthe Western Union beyond tn,
| actual cost of its lines and be
yond what it would now cos
to reproduce similar lines canno
be determined; that it is enormous i
entirely plain and undisputed. In refer
| ence to the inquiry whether this excess o
capitalization arising from stock dividend
and from the purchase of other lines a
Inflated prices paid in stock has operates
injuriously in the way of increasing tn
| charges OF the Western Union for tn
transmission of kilograms, the committe
deem it sufficient to say that their owl
| conclusion corresponds with the 'opiniol
OF the country; that its effect in that di
| rection cannot be a matter of doubt, an,
that it has been very great.
THE SWOLLEN CAPITALIZATION
/ OF western Union has created at one an,
the same time a cover, an inducement
| and, IN some senses, a necessity fol exces
sive charges for kilograms. So long and s
tar as the public could be made to believ
| the nominal capital was the real one. i
has tended to induce the public to az
| quiescence in excessive charges, while tn
| exposure of the nature of the nomins
| capital does not diminish the pressur
| which impels the managers of the compsn
to make the charges which are essential {
the maintenance of the dividends upo
the immense mass of its watered stocl
For the purpose of relieving the countr
OF the burden of charges for telegraml
which are too high, of making thos
charges more equal as between localitie
and different classes of kilograms, and {
| guarding against the mischief and DANCE,
of leaving the control of the telegraph
business of the country in the hands of
private company, which enjoys practic,
monopoly, the committee have reported tn
accompanying bill Senate bill No. 2O22
The report says the constitutional right
the government to establish postal tel,
graph is undoubted, and that there al
obvious and sufficient answers to the oil
lection that such line will operate init
riously upon private telegraphs. The r,
port asserts that the passage of the post,
telegraph bill will reduce the averae
charge per telegram from thirty-nine cen
to tw enty-five cents Immediately, and {
twenty cents in five years, and secure un
formity of charges irrespective of til
amount of business in different places f
kilograms to newspapers and to CONNIE
c1al news associations, and continues
tollows: Under the present telegraph
system the possibility of species of Gel
II WhiNh 10 Ouc vi Iue IuO
alarming dangers which menace tt
country, arises in two distinct way
each OF which requires separate consider
ton. The first is the power whic
the telegraph companies themselves ha,
OF manipulating news for sinister pu
poses, and the second is the same pow,
possessed by the Associated Press an
other similar associations not themselv,
owning telegraph lines, but making SD
clal cOmpacts for the transmission of tel
grams over lines owned and managed
others. 1t will appear that the power
the telegraph companies in this respe
will be entirely taken away by the pen,
ing bill, and that the power OF the ASS
ciated Press and similar associations wi
be greatly reduced. For the purpose, tt
report says, of giving
FABULOUS FORTUNES TO ITS INSIDE MAJ
Ayers
and their friends, the Western Union nee
not send untrue market quotations
has only to give the true market quot
tionss a single hour, or less than tina
in advance, to those whom it means
favor, and the work is effectually accon
plished. No such power should be a
lowed to exist in this country, even if n
past abuses can be shown to have o.
CURED, or even ii it is believed thel
have been in fact no abuses of it. Tt
temptation to abuse is enormous, and wi
sooner or later fprove irresistible. Tt
bill will etfectually take the power ava
from the Western Union Company, or an
other private telegraph company, b
the low rates which it secur,
to everybody, and by the still lower rat,
(which it secures commercial news ass
Citations. Competition in .furnishir
commercial and financial news
all points and places is not to be expecte
under this bill. but it will be sufficient
it insures, as it is sure to do, competitic
in furnishing such news to the more ir
portant places, whereby the field Tor prof
ably tampering with public intelligen,
will be 80 narrowed that the temptation
will no longer constitute a sensib
danger.
| TIE report has not yet been made Il
subject for formal vote, but is given o.
for publication to-day as the express
views of a majority OF the committee.
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