Iowa County democrat. [volume] (Mineral Point, Wis.) 1877-1938, 1889-08-02
The WESTERN UNIoN KICK
They Enter Vigorous Protest Against
the One Mill Rate.
Holding That the Government Bas No
Authority to Fix Price
The Law Can Not Compel the Union
to Reduce the Rates.

| The Law Can Not Compel the Union
to Reduce the Rates.
New YORK, July 29.-The following is
the substance of the protest of tue West
ern Union TeIegr9 0h company against
| the postmaster generals great cut of the
rates to be paid for telegraph service,
| giving the history and objects of the act
of 1866 and the actions heretofore taken
| under 1t. The rate in force for the past
five years has not been q uniform rate of
| one cent pee word, as many papers have
assumed, but increasing on a scale of
distances 1000 miles, with a minimum
of twenty cents per message ani
maximum of two and one half cents per
word. The telegraph companies hold
and are SO legally advised that the
language of the acS does not give the
! postmaster general absolute power to fix
any rate he may deem fit. That power is
! qualified by constitutional restriction.
In article five, is the language: "Nor
shall private property be taken for pub
| lie use without just com mpensation" the
power depends therefore on the question
''is one mil! per word just compensa,
ton"
Hon. John Wanamaker, postmaster
| general:
DEAR S1R:-Title 65 Of the revised
statutes, embracing the acts of July "a.
1865 and June 10, 1872, was the outgrowth
OF the first efforts to induce congress to
| establish a government telegraph.
! scheme was pressed before committee
| of congress to incorporate new teIe-
| graph company by the general govern
meBs with which the government should
contract to transmit kilograms at price
to be agreed upon. The government re-
oeiving and delivering the messages and
| being the only party known to
the patrons of the telegraph. This
! scheme was justified on the ground that
the government has no right to take ex-
listing telegraph properties, except at
the prices and on terms acceptable to
the companies that owned them; and
the scheme wes objected to by the tele-
| graph companies then existing, on the
ground that the government entering up
on the telegrph business at rates that
would not pay expenses, would simpl
| destroy the existing telegraph proper
| ties. 1t resulted in compromise be
tween the telegraph companies and the
| committee of congress, of which, be
| lieve the lamented Garfield was the chair
man, giving to the telegraph com mpanies
certain franchises and privileges; and to
the govern 2ment certain advantages and
privileges, including priority of service,
at rates to be annaily fixed by the post
master general; and what were
deemed at the time of the most impor-
tance to the government the right to
take existing telegraph ropertie of the
companies who accepted the provisions
of the act at an appraised value to be as
certained by arbitrators as described in
section 1867. This compromise and
agreement was enacted inio law subject
to a formal acceptance by the teIe
graph com panies; and their acce ptapce
flied with the governments rendered it to
all interests and purposes a
oomp pact between the govern
ment and ths telegraph companies, |
the operation of which was intended to be |
that the government should have the |
right to take all telegraph properties;
and that if it should elect to establish a |
government telegraph, il should take the !
existing properties on terms such as the |
law directs. This section, 1867 of the |
revised statutes, is annotated Is being |
enacted June 10, 1872, giving the |
government the right to take the tele
graph properties Is, III substance the !
same language rs the proviso at close of |
section three of the original act of July |
"a, 1876, and therefore a part of the |
compact accepted by the Western Union |
Telegraph company in June of 1867. |
The fixing of the rates by the postmaster
general. This does not apper to have |
been considered an Imperative duty of |
the postmaster general for no action
seems to have be esn taken by that officer |
in the direction of fixing rates until July |
l, 1871, when the necessity for it was |
alleged to have arisen by the com mplicated |
character of the service in transmitting
the signal weathe- reports.
The conference with the telegraph |
panies WAS invited by Postmaster |
General Crosswell through Capt. Howgste, |
the acting head of the signal service, and |
a discussion of the subject was
had in Washington, President |
William Orton, repreF enting the Western |
Union telegraph company and the post
master general having the assistance of |
Asst. Atty. Gen. Whiting and the head of |
the signal bureau; and the rates were |
fixed satisfactorily to the telegraph com
panies. They were not annually revised |
every instance the mpanies were con
suited to whit 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 have been officially proclaimed. |
The language of the act that messages |
between the several departments of the |
government shall have priority over all |
other business at such rates as the post |
master general shall annually fix" may |
be construed as q cOntem platiOD for |
the fixing of a higher rate than is |
paid by other patrons, because of such |
priority in the transmission over all other |
business. Certainly it never coDtem- |
plated comforting the power to fix the |
rates below the actual cost of the service |
Such action is nothing short OF confscs- |
tion and expistion of the property and |
service of em ploye to the use of the gov |
ernment without Just compensation |
therefor. The rate ct last was fixed !
at twenty cents for twenty words |
or less for a distance of 1000 miles or |
less and one cent for each additional |
word, aud one tenth of a cent per word |
for each additional 1000 miles or frac- |
tion therefor; if for distances of about |
1000 miles, as between Washington and |
New York and st. Louis or Chicago |
(scsrcely one-hslf the rate paid by the |
public on current messages). Distances |
5000 miles and under 1t Is about three |
fourths tie commercial rate, Our gross |
receipts for the last fiscal year as shown |
by the annual report we're S19, ,164 u /
and she current working expenses we're |
S14 $40, ,6S2.e .eS, leaving the profits S5 070,- |
57l. "a, out of which $3.50, ,25S 80 was paid |
for interest and sinking fund 81 the |
bonded debt, part of cur capitslIz alion. |
1t will be readily seen that the sx peuses !
without any return for any part of the |
capital em ployed costs within frsction |
OF IS per cent. OF the total earnings. If, |
therefore, the government rate averages !
less than IS Per cent. of the rate to be |
published las it undoubtedly does) !
then the government business IL now
done at loss. The table |
on page nine of the ann Isl |
report shows the average cost to the |
company of handling messages to be
% 2-10 per message II the govern
ment business does not pay something
more than this average then il must be
done at loss, for the messages in order
10 yield such an average must be con
sideraoly sbove the average length of
! business messages (sbo1t II ~ord.)
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