Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1889-07-30

1 RECORD-UNION,I Il
TELEGRAPHIC sOUABBLE.
The Western Union Company Makes a
Vigorous Protest.
New YORK, July 29th.-The following is
| the substance of the protest of the Western
| Union Telegraph Company against the
Postmaster-Generafs great cut of the
rates paid for transmission and delivery of
| Government messages giving the history
and objects of the Act of 1866 and the ac-
| tions heretofore taken under it.
The rate in force for the past five years
| has not been uniform rate of one cent per
word, as many papers have assumed, but
| increasing on a scale of distances above
| LOCO miles, with minimum of twenty
+, cents per message and maximum of two
| and half cents per word.
The telegraph company hold, and are SO
legally advised, that the language of the
Act does not give the Postmaster General
| absolutely power TO fix any rate he may
deem fit. That power is qualified by Con-
stitutional restriction
| In Article is the language: !" Nor shall
private property be taken for public use
| without just compensation
The power depends. therefore, on the
| question, is one mill per word Just COM
pensation2
THE PROTEST.
Hon. John Wandmdker, PoStiaaSt er- General
DEAR SIR: Title 65 of the Revised
Statutes, embracing the Acts of July "a
1866, and of June 10, 1877, was the out
| growth of the first effort to induce Con-
| gress to establish Government telegraph.
A scheme was pressed before commit
! tee OF Congress to incorporate a new tele-
graph company by the General Govern
ment, with which the Government should
| contract TO transmit kilograms at price to
| be agreed upon, the Government receiving
| and delivering the messages, and being the
only party known to the patrons of the tel
| egraph.
This scheme was justified on the ground
| that the Government had no right to take
| existing telegraph properties except at the
prices and on the terms acceptable to the
| companies that owned them, and the
| scheme was objected to by the telegraph
companies then existing on the ground
| that the Government entering upon the
| telegraph business at rates that would not
pay expenses would simply destroy the ex-
listing telegraph properties.
| 1t would result in a compromise between
| the telegraph companies and the Committee
! of Congress, of which, | believe the la
| mented Garfield was chairman, giving to
| the telegraph companies certain franchises
and privileges, including priority of service,
at rates TO be annually fixed By the Post
master General, and what were deemed at
| the time of most importancet to the Govern
ment, the right to take the existing tele-
| graph properties of the companies who &C.
cepted the provisions of the Act at the ap-
| praised value, to be ascertained by arbi-
| traitors as described in Section 5,267
This compromise agreement was enacted
| into law, subject to a formal acceptance
| by the telegraph companies, and their ac-
| ceptance filed with the Government rem
dered it, to all intents aud purposes, COM
| pact between the Government and the tele-
graph companies, the operation of which
was intended to be that the Government
should have the right to take all the tele-
graph property, and that if it should elect
| to establish a Government telegraph it
should take the existing telegraph proper
| ties, on terms 10 be ascertained as the law
directs.
This section Is, 5,267) of the revised statutes
| of 1873, annotated as being enacted June
| 10, 1872, giving the Government the right
to take the telegraph properties, is in sub
stance the same language as the proviso at
the close OF Section 3 of the original Act
of July a. 1866, and therefore part of the
compact accepted by the Western Union
The fixing OF rates by the Postmaster
General does not appear to have been con-
| sidered an imperative duty on that officer,
| tor no action seems 10 have been taken bv
him in the direction of fixing rates until
July lst of 1871 when the necessity for it
was alleged to have arisen by reason of
the complicated character of the service in
| transmitting signal weather reports
A conference with the telegraph COM
orayo h., ~.
Creswell, through Captain Hoggate. the
acting head of the Signal Service, and a
| discussion of the subject was had in Wash
| ingron; President VIM. Orton, representing
the Western Union Telegraph Company,
/ and the Postmsster-General having the as
| sistance of Assistant Attorney. General
Whiting and the head of the Signal Bureau,
! and the rates were fixed satisfactorily to
| the telegraph companies.
They were not annually revised until
! some years later, and in almost every in
stance tbe telegraph companies were con-
| suited as to what they could afford to do
| the service for.
In two instances, Postmaster. General
Jewell and Postmaster General James, at
the instance OF the telegraph companies,
recalled and modified their orders after
they had been officially proclaimed.
The language of the Act. messages be-
tween the several Departments of the Gov
erEment shall haye priority over all other
business, at such rates as the Postmaster
| General shall annually fix" NAV be con-
| strued as contemplating the fixing of
higher rate than is paid by otaer patrons
because of such priority in transmission
| over all other business. Certainly it never
| contemplated comforting the power to fix
the rates below the actual cost of the sery-
| ice.
Such action is nothing short of confisca-
| ton and appropriation of the property and
! service of employees ito the use of the
Government without just compensation
| therefor
The rate as last fixed, 20 cents for twenty
words or less, for distances of 10000 miles
| or less, and one cent for each additional
word and one-tenth of cent per word for
| each additional 100 miles or fraction there
| OF for distances above 10000 miles, as
| between Washington and New York and
st. Louis or Chicago, is scarcely one-half
| the rate paid by the public on current mes
| sages.
For distances of 800 miles and under it is
! about three. fourths the commercial rate.
Our gross receipts for the last fiscal year, as
I shown by the annual report, were $19, ILL.,
1912 The current working expenses
were Sl4 640,592 is, leaving the profits
| s. 070,57l 81; out of which $3.50. .25S 80
was paid for interest On the sinking fund of
| the bonded debt, which is a part of our
| capitalization.
| 1t will be seen that the working expenses,
! without any return for any part of the cap
ital employed, cost within a fraction of 70
per cent. Of the total earnings If, there
| fore, the Government rate averages less
than 80 per cent. of the rate to the public
| (as it undoubtedly does, then the Govern
ment business is now done at loss.
The table on page of the annual report
shows the average cost to the company OF
| handiing messager to be % 2 10 cents per
message. If the Government business does
not pay something more than this average,
! then it must be done at loss for the mes
sages, in order to yield such an average,
must be considerably above the average
length of business messages, about seven
teen words, and it is q very exacting serv-
ice, having precedence over all other busi-
ness, and requiring prompt and often long
distance messenger delivery or rewriting
in some cases to deliver by some special
| wires.
These exhibits demonstrate that the rate,
| as fixed for the past year. is a great in