The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1886-01-30

Messrs. Young, CAN'T, Van Benthuysen. Hunt
ington and johnson, went to their respective
homes.
The Bell Telephone Company, of Boston, COM
menced suit in Baltimore against the local Pan
company for infringements of its patents. I'm
mediatelv the local Pan company at Memphis.
Tenn, commenced suit against the local Bell
company of the same place for infringement of
It's patents. In the one instance the parent COM
pany brought the suit for the benefit of its
licensees; in the other instance the local COM
pany brought the suit
In his letter published in the Now York Trib-
une of Sept. 80 in defense of the Attorney gen.
eral DIR. Rogers says: Colonel Young in
formed me and my son that the Attorney general
had agreed that a suit should be brought by the
Soicitor-general against the Bell Telephone
Company at the instance of the National I'm
provement Company" That statement has
never been denied by any of the parties.
Attorney general Garland left for Arkansas on
the 9th of August. Promptly on the LIST of
September Colonel Young arrived in this city
and stopped at Wormleys. Private rooms were
not needed on this occasion. On the I'd, Colonel
Casey Young and Senator Harris called upon
the. Solicitor-general. finding there the
ing. made by the district attorney
for the Western district of Tennessee.
to bring suit in Memphis to vacate the Bell
patents. This application was granted at once,
licitor general Goode informed Colonel Young
the next morning that the order had been for
warded to commence the suit Mr.. Goode was
acting Attorney general on the I'd day of Sep
TENDER, and had all the routine work of the De-
partment of Justice to perform; had to receive
visitors who came on business to see the Attor-
ney- general, and yet he had time to consider Cd
question involving millions, examine the pa
pers in the case, determine upon the propriety
OF the suit, see that authority existed to bring
rrdA hoe
one working day of seven hours Such prompt
action has hardly ever been paralleled in gov
eminent office. And Mr. Goode, by his action,
showed that he was not afraid to assume respon-
siblity. A committee of Congress. composed of
lawyers, had reported little more than year
before that the Attorney general had no power
to bring such suit IS Ar. McCorry, district at
torney for Tennessee, had requested authority
to bring Mr.. Goode probably did not know
that such report was in existence, or, if he did,
assumed to know more as to the powers OF the
Attorney general than Congress did.
But to return to our narrative.
Each one of the companies holding under the,
Pan company, except the Pennsylvania and Bal
timore. paid bonus for its privilege, and, be-
sides, paid $40 each for all the telephone instru-
ments it used in its plant" In addition, these
companies paid all the expenses of "a plant"
All this was an actual cash outlay. varying in
amount according to the size of the plant" and
the number of instruments purchased. The
bonus in each case was the same-$10, 600. Then
40 per cent of the capital stock of each of these
companies was reserved for the Pan company,
and it paid no part OF the bonus" or the cost
Of the plant" and instruments. For this
penditure the local companies received license
TO use the Pan-electric telephones and guar
antee of protection in using them.
To fully understand the interest which Attor-
ney-general Garland had in breaking down the
Bell patent it will be necessary to recapitulate
a little.
First, there was his $780, 900 stock in the Pan
electric Telephone Company-onet tenth Of the
whole company was his. Then there is the $40 000,
600 capital stock of the license companies of which
40 per cent, or $40, 900, 000 belongs to the Pan
company; of this ne-tenth, 81. 600 000 belongs
to Attorney general Garland But that is not
ALL nor even small part. of what would result
from the breaking down of the Bell patents. In
that event there would not be eight but at least
fifty companies, with capital stocks averaging
So, 600, 0C0 each, that would seek licenses from
the Pan-electric company. Two hundred and
fifty million dollars is an exceedingly small esti-
mate of the amount at which the companies
ing the Pan electric telephones would be capital
lied if the Bell patent was invalidated. Forty
per cent. or $780, 600. 900, of this stock would be
long to the Pan company; one-tenth of that or
$40 OOOOO would be the property OF Attorney
general Garland. Paying only per cent and
this is small allowance-he would have an in
come of over $500 900. and that without being
out one dollar. Senator Harris and Colonel
klns, DR.. Rogers and Colonel Looney would each
have as much more.
There was another potent reason working
upon these parties one and all. The laws OF
the country are particularly severe upon bogus
corporations which obtain money without giving
an equivalent, and though corporations are with
out souls or bodies, the men who conn pose
them are not and hence, unless the Bell patents
could be broken down and declared invalid the
men who had invested their money in the 60 per
cent of the local companies which had been
licensed by the Pan company, which had paid
bonuses, built plants bought telephones which
were without value, would be apt to call upon
the parties who had induced and profted by
these expenditures. made upon false statements
as to law and facts, to make good the losses.
There was ruin both In fortune and fame upon
the one side and almost unbounded wealth upon
the other. 1t was worth stretching the law and
the power of the government to secure the one
ana prevent the other.
In the formation of the local companies, par
ticulary liz the East, where it was to be expected
that the Bell company would first assert it's
rights, particular care was had by the Pan COM
pany to secure local political strength. DR.. Eli
j. Henke, an ex- member of Congress and lead
ing Democrat of Baltimore, was intrusted with
the formation OF the company that was to con-
troll the cities of Baltimore and Washington
General Bradley T. Johnston, one of the most
popular OF the Southern leaders in Maryland
was made president of the company In the
Pennsylvania company, Mr.. Robert Klotz,
leading German citizen and an ex-member of
Congress, was selected to organize the company.
In the South and West, the political magnates
who controlled the parent company knew their
power was supreme and only required money
from their licensees, furnishing the political in
flueuce themselves
The LIST of the names of the leading stock
holders and officers in this company reads al
most like page from the government Blue
book:
A. H. Garland, Attorney general
Joseph E. Johnston, Railroad Commissioner.
j. d. G. Atkins Indian Commissioner
Isham g. Harris, u. S. Senator Tennessee.
George G.. Vest u S. Senator Missouri
Zebulon G.. Vance. U. S. S. North Carolina.
Robert Klotz. ex-M. c.. Pennsylvania
Eli j. Henkle, ex-M. O.. Maryland.
Casey Young, ex NJ. c., Tennessee.
Mr.. Upshaw. Chief Clerk, Indian Bureau.
Frank Armstrong, Indian Inspector.
John G. Brown Ex-Governor Tennessee.