The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1888-05-01
TELEGRAPH AND TELEPHONE.
Relations Betwsen,the Western Union and the
Bell COmpany-Big Fight In Prospect.

New York, April 30-Ths Times prints the
following interesting editorial in regard to the
relations between the Western Union Telegraph
Company and the Bell Telephone Company. 'In
January last tho president Of the Western
Uoion Telegraph Company had long interview
with the president of the Bell Telephone Com
pany concerning the mutual interests Of the two
great corporations We both agreed said
President Green 10 the Washington CORE
spondent Of the Herald, few days later. that
the present contract was an excellent thing for
all concerned. and that IL would DO to our
mutual disadvantage TO annul it Tho contract
had been violated on the lines OF the New En-.
gland company he added, but the Boil CON-
pany had tried TO enforce It's terms aud the two
corporations were In perfect accord in overy
particular The attitude OF these corporations
toward each other--ons holding q monopoly OF
tsleeraphio Communication and the other
monopoly OF telophoning-is = matter OF
some public interest, especially because OF the
terms OF the contract OF 1870 aud OF the re cont
encroachment of one company upon the field OF
the other. seemingly Ia violation of that con-
tract While 10 n assorted, as We have shown,
that the eompanIes arc Ia perfect accord In
every particular tho Boston Commercial Buls.
tin, trade Journal OF excellent standing. do.
elares that tho Western Union 10 not Satisfied
and has appealed 10 tho courts for q settlement
IN accordance with It's own interpretation OF tho
contract The Bulletin asserts that this suit has
been pending for some time and has been re-
fsrred Co Judge Lowell AZ MASTER while provis.
lon for the taking o.. dispositions has eeon made
When tho great suit OF nine years ago between
the two corporations was compromised, the Bell
company took from the Western Union
tho valuable and apparently indispsn-
sable telephone patsnts OF Edison and
agreed 10 pay TO the Western Union 20 per cent
OF all rentals or royalties received by IL for lsle
phones This agreement 10 embodied In the
contract of Nov. 10, 1879, which Was 10
run seventeen years In compliance with Its
Western Union nearly g., 500, 900 since 1850, the
annual payment having risen from $2l4, 900 In
lsS. % 100000 In 1856 The Bell company
agreed not only To pay this tribute, but also TO
prevent competition between the telephone aud
telsgraph-that 10 TO say. 10 agreed that the tel
ephone should not be- used for trans hitting gen
eral business messages, market quotations. or
news Tor sale or publication In competition
with the Western Union. The so-oaled long
distance telephone service clearly eucroaches
upon the held OF the telegraph, but IL does not
appear that the pending suit relating TO the con-
tract Is pressed by the Western Union on this
account The Commercial Bulletin says:
'sThngs worked smoothly until the Bell company
entered the sxtraerritorial business when the West
Union showed irritation and brought suit for an
seeounting under the contract. They claimed that
instead Of getting all the royalty possible from sub
companies they took franchise stock as large measure
or the consideration, and ths Western Union claimed
one fifth OF this franchise stock.
This would be Q claim for Sc 0OO0 900 or
$1,000. 900 Of stock In the local telephone COM
panirs OF tho country, and, If the Bulletin has
not been misinformed, she suit 10 one OF great
importance. Three or four years ago the Bell
company adopted the policy of exactine stock
from local companies in payment for franchises,
or for the privilege Of paying sl4 year for
the use OF instruments costing only s3.42 1t
has been the companys practice to demand 80
per cent. OF more of q local companys entire
capital stock. In this way and by purchase 1t
had accumulated, on May 5, 1885, no less than
s22, 0l6.573 in such stocks, and $l5.53l, $50 Of
this had been taken for franchises Subsequent
exsctions may have raised the total to 500, 000,
600 According TO the Bulletin, the Western
Union holds that by accommodating this stock
the Boil Company has evadsd the requirements
OF the contract; that in the place of the stock.
which yields nothing to the Western Union.
instruments larger rents. one-ffth of which the
Western Union would have enjoyed. The
Western Union complains because annual
rent of more than 400 per cent. upon the cost Of
the property was raised. IL such .
claim should be sustained the Western
Union would obtain a considerable quantity Of
stock In all OF the local telephone companies.
which might be used advantageously against
tno Deli COMPANY III bno Two great corporations
should become openly hostile. and il the West
ern Union should, without regard to the con-
tract. undertake 10 use the patents Of Edison
and Gray. IL Is asserted that the Western
/ Union Is accommodating telephone patents which
| can be used hereafter. The patents surrendered
| to the Bell Company under the contract would
become very valuable If Bells broad claim
should be broken before the expiration of his
patent. and II that claim should not be
disturbed the Western Union would still
| be well equipped nc the expiration Of the
contract for entering the Bell Company's field,
or ut least would be able to exact from the Bell
company better terms for peace than are spcci-
fed In the present agreements. At the expira-
ton Of the Bell patsnt the Bell company's long
distance lines will have become extended 30 az
| to afford. in connection with the local ex.
changes, the framework upon which could be
built up formidable opposition to the Western
Union. 1t should be noted that the suit for an
| accounting to which the Bulletin directs atten-
ton. has not been pushed zealouslv. II the two
| companies are not In exact accord neither OF
| tn en- desires war. And If together they should
be able TO control absolutely the business of
telephoning six or eight years hence. il is prob
able that they would then prefer TO divide the
profits amicably rather than to fight over them