Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1886-02-02
The Telephone Scandal.

The Telephone Scandal
While the statements concerning Attor-
ney General Garland's connection with
the contest between the Pan-electric and
Telegraph Companies and the Bell Tele-
phone Company were confined to repub-
liean newspapers there was opportunity
for the Attorney General to cast doubt
upon the truth of the scandal by charging
it to the work of partisan malignity. But
now that leading democratic newspapers
have exposed and denounced the scandal,
all pretense that it is the offspring of par.
tizan malice is absurd. recent issue of
the New York World publishes full ac-
count OF the discreditable connection of
Garland with this scandal, in which it
sums up the matter as follows:
To fully understand the interest which At
torney- General Garland had in breaking down
the Bell pateut it will be necessary to reca-
pitulate little.
First, there was his $500, 900 stock IN the
Pan Telephone Company-one-tenth of the
whole company was his. Then there is the
$40, 100000 caital stock Of the license com
panies. Of which 40 per cent, or SIG, 000, 900,
belongs to the Pan Companv-of this one
tenth, or 1000, 900. 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 30 companies, with capital stocks
averaging 50, 900, 900 each, that would seek
licenses from the Pan electric Company.
Two hundred and fifty million dollars is an
exceedingly small estimate Of the amount at
which the companies using the Pan-electric
telephones would be capitalized if the Bell
patent was invalidated. Forty per cent, or
800, 900. 900 of this stock, would belong to
the Pan Company-one-tenth of that, or
$40, 200, 900. would be the property of At
torney-general Garland. Paying only Ave
per cent--and this is small allowance-he
would have an income of over $500, 900, and
that without being out dollar.
Senator Harris and Colonel Young, Gem
eral johnson and Commissioner Atkins, DR.
Rogers and Colonel Looney would each have
rs much or 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 Civ
ing an equivalent. and though corporations
are without souls or bodies, the men who com
pose them are not, hence, unless the B III
patents could be broken down and declared
invalid, the men who had invested their
money in the GO per cent. OF the local COM
panies 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 profited by these ex-
penditures, made upon false statements rs to
law and facts, to make good the losses.
In the formation of the local companies,
particularly in the East, where it was to be
expected that the Bell Company would first
assert its rights, particular care was had by
the Pan Company to secure local political
strength. DR.. Eli j Henklc, an ex-member
of Congress and leading democrat Of Balti-
more, was intrusted with the formation of the
company that was to control the cities of
Baltimore and Washington. General Brad
lev T johnson, one of the most popular Of
the Southern leaders in Maryland, was made
president of the company.
In the Pennsylvania Company Mr.. Robert
Klotz. a leading German citizen and an ex-
member of Congress. selected to organize
the company. In the South and West the
political magnates who controlled the parent
company knew their power WAS supreme, and
NnlN TpQulTeu uluUeN IToUl tntIT llcPUseS.
nishng the political influence 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. II. Garland, attorney general Joseph
+, Johnston, railroad commissioner; J. ID.
C.. Atkins, Indian commissioner; Ishman G
Harris. United Ststes senator, Tennessee
George G. Vest, United States senator, Mis-
souri,; Zebulon G. Vance. United States sem
ator, North Carolina; Robert Klotz. tx men,
Der of Congress, Pennsylvania; Eli J.
Henkle. member of Congress. Marylsni
Casey Young, ex-member of Congress, Ten
nessee; MIR. Upshsw, chief clerk. Indian
Bureau; Frank Armstrong Indian inspector
John c. Brown, ex governor of Tennessee
This summing up of the case will
give the readera correct idea of the po-
sition which Mr.. Garland and other men
prominent in the councils of the democrat
ic party occupy in regard to this matter.
Mr.. Garland used his position as attorney
general in Mr.. Cleveland's Cabinet to
break down the Bell Telephone Company
and build up the Pan-electric Telephone
Companv,he being an owner of one eighth
Of the stock in the latter company. With
this was connected postal telegraph
scheme of large proportions. DR.. Rog.
ers. the father of the inventor is quoted as
saving: 1--WE intend to get a
postal telegraph established, and
nolitical influence will give us the
control of that Then we will have
the grandest monopoly of the world"
II will be seen that other persons beside
Garland prominent in official positions
nnder the present administration, also
democratic members of Congress. were in