, 1886-02-11
The Pan Electric Scandal.

/ ing the exposure, so 1t VIII be seen
| that comment on the scandal in which
the administration has become so
/ deeply involved is not the eXaggerat-
ed expression of an unfriendly partI-
tisanship. The World, in particular,
/ gives the history at length. Editor
I lallv. ii remarks that Senator (nOw
attorney geueraD Garland and his
associates who accepted partnership
/ in this telephone company must have
done 50 with the knowledge that they
were expected to use their influence
and votes III the senate and the house
of representative to promote the in
terests of the enterpTise-with the
! knowledge. IN fact, that through exc
cutiye or Legislative influence their
stock might be made worth fortune
or lie rendered wholly valueless."
Again, says the World: If Mr.. Gar
/ land was censurable for accepting
stock in this venture while holding a
! seat in the senate, Is he not much
more to blame for retaining it when
he accepted the position of attorney
general? Did he not know that the
contest on the Bell patent must come
before him for official adjudication?
! Alth ough the charge of fraud against
the patent of that greedy monopoly
ought to be tired IL the courts, the
owner of a large amount of rival
stock was not the proper person to
make such Il decision"
The history of the scandal, as pre-
sented by this democratic authority,
is briefly this: The Pan Electric
Telephone company is founded upon
patents issued to j. Harris Rogers,
formerly ly of memphis, Tenn, and now
a resident of Washington City.
Some ten years ago an effort was
made to organize q company to push
the Pan Electric" but the scheme
! did not attract investors; and there
! fore in the spring of 1888 the organ
iZation Of new company was de
termined on. The stock was fixed at
S5,0O0,O00. In the hope and for the
purpose of securing moral influence
and service" from men III high places
millions of the stock were given away.
The policy of Oakes Ames-that of
placing the stock where it would do
most strictly followed. Sena-
tor Garland of Arkansas and Senator
Harris of Tennessee We're each given
S500G0O of the stock; to Representa-
tives Young and Atkins of Tennessee
like amounts We're given; Gen. Jos
+. Johnston was made the recipient
of another block of $500,O00; and the
| World asserts that the list of lead
ing officers and stockholders i'll the
comp2ny reads almost like q page
from the government blue book"
But the chief censure falls upon Mr.
Garland.
Success OF the Pan Electric de-
pends on its ability to get the Bell
patents set aside. Attorney General
Garland has been using his official
position to favor this effort. 1t
would not do for him to bring the
suit himself to test the validity of
the Bell patents, but he went off to
Arkansas, that the solicitor-general,
the next law officer of the govern
ment might do it. Mr.. Goode was
acting attorney:general in Mr.. Gar
lands absence, and he proceeded
with greatest haste. The World says:
lie had all the routine work of the
department of justice to perform /;
had to receive visitors who came on
business to see the attorney general,
and yet he had time to consider a
question involving millions, examine
the papers in the case, determine up
on the propriety of the suit, see that
authority existed to bring it, and
order the commencement of it, all
within one working day of seven
hours. Such prompt action has
hardly ever been parallelcd in Il
government Office" The history
proceeds to show what interest At
torney-General Garland had in
breaking down the Bell patents,
viz:
First, there was his $50O,OOO stock
in the Pan Telephone company-one
tenth of the whole company was his.
Then there is the S40,000,000 capital
stock OF license companies, of which
40 per cent, or $l6,000,000, belongs
to the Pan company-of this one
tenth, or $1,660,000 belongs to At
torney-General Garland But that
is not all, nor even a 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 cap
ital stocks averaging $5,000,000 each,
that would seek licenses from the
Pan Electric company. Two hun
dred 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
100000, 600 of this stock would
belong to the Pen company-one-
tenth of that, or Sl0,0OO,000. would
be the property OF Attorney General
Garland. Paying only 5per cent
and this is small allowance-he
would have an income of over $780,
600, and that without being out one
dollar. Senator Harris and Col.
Young, Gen. Johnston and Commits
sioner Atkins, Dir. Rogers and Col.
LOoney would each have as much or
more.
This is Il national scandal. It may
not be inappropriate to remark that
all the charges against Mr. Blaine for
his interest in the Little Rock stock,
while speaker, We're OF small appar-
ent, and no real Importance, com
pared with the universally admitted
facts as to the attorney generals
direct and immense interest in the
results OF suits which he aided to
institute, ir order to destroy the ex
isting telephone monopoly" and to
put in its place another Telephone
monopoly" of which he held $500, 900
OF stock, given to him While he was
senator, and in position to aid the
new IN fighting the old monopoly
IN the telephone business. It looks
bad for reform, unless, indeed, the
president shall speedily vindi-
cate his administration by putting
Mr.. Garland out of the cabinet.
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