Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1886-02-05
Tho Pan.EIec,rlc scandal.

The suit begun by the government against
the Bell telephone company brings to light
scandal which bids fair to rival that of the ia.
nous Credit Mobelier Indeed all the main
features of that disegreesble affair have been
repeated. In 1888, one Rogers, Maryland
professor organized what is known as the
Pan Electric company. 1t WAS incorporated
in Tennessee with a nominal capital stock of
81, OO0, 600 Under the state laws all that
was necessary to be paid in was the fee to the
secretary of state for using his seal, which
amounted to 81 80.
The whole possibility of making the CON-
pauy success lay in its ability to re.
sist the monopoly of the B III telephone
company In order to make the fight it was
necessary to enlist the help OF memb srs
of Congress. Here the tactics of Oake'
Ames in placing his stock where it would do
the most good" we're repeated. Many of the
most prominent members of Congress we're
offered the stock of the company. Among
those who refused the tempting bait we're
Samuel j. Randall, John G. Carlisle, Abram
Hewitt and S. s. Cox. On the other hand.
the names of Senators Garland and Harris,
Young are on the books of the COMPANY,
each credited with half a million dollars
worth of stock. This stock was given with
out any payment and the evident consdera
ton was the influence which these gentlemen
would bring in favor of the bill which was at
that very time pending in Congress in the in.
terest of the company. This bill requiring
the Attorney General to bring suit in behalf
of the United States to annul the patents of
the Bell telephone company, and SO give
room for the Pan-Electric company, passed
the House. In the meantime Senator Gar
land one of the chief stockholders in tn g
Pan Electric company, became Attorney Gen.
eral. Mr.. Garland had sufficient sense of the
outward prophecies of his position to refrain
from personally hearing the petition of his
fellow stockholders, to bring suit against the
Bell company; but he had not sufficient
sense of the real demand of official honor,
which was that he should either give up his
Office or his stock. He compromised by del.
egating the business to his subordinate, So.
licitor General Goode, who promptly began
the suit in the name OF the Government.
The New York World thus defines the rela.
ton of Attorney General Garland in the suit
to invslidate the Bell patents.
"There his $780, 900 stock in the Pan Telepbops
company-one-tenth Of the whole company was his
Then there is the $4,000 900 capital stock OF tn,
license companies OF which 40 per cent or SIG NOO
100, belongs to the Pan company-of this ope-teptb
or 81 ,oO0OOO, belongs to Attorney General Garland
But that IS not ALL or even small part Of what would
result from the breaking down Of the Bell patepts
y that event there would not be eight, but at leas
hfty companies, with capital stocks averaging IS OOO
600 each, that would seek licenses from the Pan
trio company. Two hundred and nifty million dollar
Is an exceedingly small estimate OF the amount A
which the companies using the Pan-Eectric tele
phones would be capitalized II the Bell patent was in
validated. Forty per cent, or $780, 900 900 Of tbi
stock would belong to the Pan Hpanvone, tenth ~
that, or tlOOO00OO, would be the properly of Ator
ney General Garland Paying only per cent.-anC
this is a small allOwancs-he would have an income n
over S50O,OOO and that without being out one dollar
One member of the cabinet as principal
and another as assistant, three United State
senators, several minor government officers
an ex-governor, and three ex members O
Congress are prominent in the directory O
the Pan. Electric company.
There can be no question as to the impro
priety of Mr.. Garlsnds continuance in tn
cabinet. Even so strong defender of Pres
ident Clevelands administration as tn
Springfield Republican says: The Presi
dent should promptly insist that these me,
part with their stock or with him. The Al
torney General in particular can readily sc
that his presence in the cabinet itself lower
the tone of the administration as of me-
united in holding their places as a publ
trust and prepared to discharge their dut
under all circumstances"
The leading Democratic papers have bee
outspoken in their exposure of the great scan
dial OF the hour. The New York Sun saws,
at Is most unfortunate for tue administration IN,
an exposure Of private interests in q speculativ
scheme should more or less compromise two mem he,
OF the cabinet, the solicitor general Of the Unite
States tho commissioner Of railroads. the eommi,
soner OF Indian anairs, the chief clerk Of the India
ohoe, aud an Indian inspector to say nothing OF Sc,
eral senators and several eK-members OF CSngres,
all democrats II is astounding that senators an
representatives who respected their public trats An
valued their good names could have been Induced /
accept these fAyors. They were Of course expecie
to render some equivalent in service for the share
they poeketed either by votes or by the credit {
their names to attract public confidence to the ente
prise. In either case they committed grave wronl
IL not charged that any Of these parties acted eo
ruptly or that they Intended TO commit fraud but M
whole business, from the beginning, when the priI