Wichita eagle., 1888-05-04
WANT THE EARTH.
The Alliance Of the Two Great Electrical
Companies.

NEW YORK, May Sine Times prints
the following interesting editorial in re-
gard to the relations between the Western
Union Telegraph company and the Bell
Telephone company:
In January last the president of the
Western Union Telegraph company had a
long interview with the president of the
Bell Telephone company, concerning the
mutual interests Of the two great corpora
tions. 1--WE both agreed" said President
Green to the Washington correspondent OF
the Herald a few days later, that the
present contract was an excellent thing
for all concerned. and that it would be TO
our mutual disadvantage TO aunul it. The
contract had been violated on the lines of
the New England company" he added,
''but the Bell company had tried to en-
force its terms, and the two corporations
were in perfect accord in every particu-
lar"
Tie attitude of these corporations to-
ward each otker-one holding monopoly
Of telegraphic combination and the other
monopoly of telephoning-is a matter of
the terms OF the contract OF 1879 and OF the
recent encroachment of one company upon
the field OF the other. seemingly In viola
ton of the contract. While it is asserted,
as we have shown, that the companies
ARE in perfect accord in every Particular
the Boston Commercial Bulletin, trade
journal of excellent standing, declares that
that the Western Union is not satisfied.
and has appealed to the courts for a set
Element in accordance with its own inter
probation of the contract. The Bulletin
asserts that this suit has been pending for
some time, and has been referred to Judge
Lowell as master, while provision for the
taking of dispositions has been made.
When the great suit of nine years ago
l.
the Bell company took from the Western
Union the valuable and apparently indis-
pensable telephone patents of Edison and
agreed to pay to the Western Union 20 per
cent of all rentals or royalties received by
it for telephones. This agreement is en-
bodied i'll the contract OF November 10,
1879, which was TO run seventeen years. In
compliance with its terms the Bell com
pany has paid in cash to the Western
Union nearly s., 500, 600 since 1850, the an
nual payment having risen from S2l4,000
in 1881 TO $404, 600 in 1856. The Bell COM
pany agreed not only to pay this trfDIte.
but also to prevent competition between
the telephone and the telegraph-that is
to say, it agreed that the telephone should
not be used for transmitting general
business messages. market quotations, or
news for sale or publication in competition
with the Western Union" The so-called
''long distance telephone" service clearly
encrOaches on the field of the
telegraph company, but it does not appear
that the pending suit relating to the con-
tract is pressed by the Western Union on
this account. "'Ihe Commercial Bulletin
says: Things worked smoothly until the
Bell company entered the extra territorial
business, when the Western Uni on showed
irritation and brought suit for an account
ing under the contract. They claimed
that the Bell people had been recreant to
their trust; that instead OF getting all the
royalty possible from sub-companies they
took franc hise stock as a large measure of
the consideration, and the Western Union
claimed one-iifth Of this franchise stock.
This would be a claim of 100000 or
81 100000 of stock in the local telephone
companies of the country, and, if the Bull
letin has not been miSlnformed, the suit is
one of great Importance.
Three or four years ago the Bell COM
pany adopted the policy of extracting
stock from local companies in payment
for franchises-Sl4 for the year for the use
of instruments costing only S3.42. 1t has
been the company's practice to demand 30
per cent of "a local company's entire capt.
tai stock. In this way and by purchase, it
had accumulated on May 5, 1885, no less
than S22, 0l65 in such stocks, and Sl5,-
53l ,0O6 of this had been taken for fran
chises. Subsequent exactions may have
raised the lOJdl 10 S0U,oOU,UuO. According
to the Bulletin, the Western Union
holds that by accommodating this stock the
Bell company has evaded the requirements
of the contract; that in place of the stock,
which yields nothing to the Western I'm
ion. there might have been collected for
the use of instruments, larger rents, one
fIfth of which the Western Union would
have enjoyed. The Western Union COM
plains because a n annual rent OF more than
inil cant the cost nj the
was not raised.
If such claim should be sustained, the
Western Union would obtain a conslderd-
bic quantity of stock in all the local. tele-
phone companies, which might be used
advanta geously against the Bell company
II the two great corporations should,
without regard to the contract, undertake
to use he patents of Edison and Gray.
1t is asserted that the Western Union is
telephone patents which
can be used hereafter. The patents sur
rendered to the Bell company under the
contract would become very valuable if
Bells claims should be broken before the
expiration of his patent and if that claims
should not be disturbed the Western
Union would still be well equipped at
the expiration of the contract for enter
ing the Bell company's field, or at
east would be able to exact from
lhe Bell company better terms of peace
than are specified in the present agree
ment. At the expiration of the Bell pat
mt the Bell company's long distance lines |
will have become extended so as to afford, |
q connection with the local exchanges, |
he frame work upon which could be |
quilt formidable opposition to the West |
srn Union 1t should be noted that the |
suit for an accounting to which the Bull |
etin directs attention has not been |
pushed zealously. If the two companies |
ire not in exact accord, neither OF them |
iesires war And il together they should |
De able to control absolutely the business |
If telephoning six or eight years hence. |
{ is probable that they would then prefer |
o divide the profits amicably rather than |
n fSobr