Omaha daily bee., 1889-07-30
WESTERN UNIONS PROTEST.
Wanamaker's One Mill Rate Pro-
nounced Unreasonable.
HAS ovERsTePPEo THE BOUNDS.
His Power to Make an Unrcmunera-
tive Tariff Denied-An Increased
Telegraph Toll Demanded In
stead of the Reduction.
MonOpoly's llaint.

MOnOpoly's Plaint.
New YoRK, July 29-The following Is the
substance of the protest of the Western
Union Telegraph company against the post
master generals great cut of the rates to be
paid for telegraph service in the transmits
sion and delivery of government messages,
giving the history and objects of the act of
1866 and the actions heretofore taken under
it. The rate in force for the past five years
has not been uniform rate OF 1 cent per
word, as many papers have assumed, but
increasing on scale of distances above
1000 miles, with a minimum of 20 cents per
message and q maximum Of 21S cents
per word. The telegraph companies
hold, and are legally advised that the Ian
guage of the act does not give the postmaster
general absolute power to fix any rate he may
deem fit That power is qualified by consti-
tutional restrictions In article5 is the Ian
guage, "nor shall private property be taken
for public use without just compensation"
The power depends therefore on the Ques-
tion, is 1 mill per word a just compensation
Hon. John Wanamaker, Postmaster Gen.
eral-Dear Sir: Title 65 revised statutes,
embracing the acts of July 24 1866, and of
June TO- 1872, was the outgrowth of the first
efforts to induce congress to estab-
llSu BONeTuHcub utleBTdpu n SCllGlhC
was pressed before committee of
congress to incorporate new telegraph COM
pany by the general government, with which
the government should contract to transmit
kilograms at price 70 be agreed upon, the
government receiving 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 govern
ment had no right to take existing telegraph
properties except at prices and on terms ac
ceptable to the companies that owned them;
and the scheme was objected to by the tele-
graph companies then existing, on the ground
that the government entering upon the tele-
graph business at rate that would not pay
expenses, would simply destroy existing
telegraph properties. 1t resulted in u com
promise between the telegraph companies and
the committee of congress, of which
believe the lamented Garfield was chairman,
giving to the telegraph companies certain
franchises and privileges and to the govern
ment certain advantages and privileges, in
Guiding the prior right to telegraph services
at the rates to be annually fixed by the post
master general, and what were deemed at
the time of most Importance to the govern
ment, the right to take the existing telegraph
properties of the companies who accepted
the provisions of the act, at an appraised
value to be ascertained by arbitrators as de-
scribed in section 5267. This
into law subject to the formal
acceptance by the telegraph companies, and
their acceptance filed with the. government
rendered it to all intents and purposes
compact between the government ana tele-
graph companies, The operation of which was
intended to be that the government should
have the right to take oil telegraph proper
ties, and that if it should elect to establish
government telegraph 1t should take the ex-
isting telegraph properties on terms to be
ascertained as the law directs. This section
5267, revised statutes Of 1878, annotated as
being enacted June 10, 1872, giving the gov
fbar nj IN fa1y ta1nr ny,t
language as the proviso at the close
Of section 8 of the original
act of July "a, 1865, and therefore part of
the compact accepted by the Western Union
Telegraph company in June of 1867.
The fixing of rates by the postmaster gen.
eral does not appear to have been considered
an imperative duty on the postmaster gen
eral, for no action seems to have been taken
by that officer in the direction of fixing rates
till July l, of 1871, when the necessity for it
was alleged to have arisen by reason of the
complicated character of the service in trans
mltting the original weather report. A con-
ference with the telegraph companies was
involved by Postmaster General Croswell
through Captain Howgate. the acting head
of the signal service, and decision of the
subject was had in Washington, President
William Orton representing the Western
Union Telegraph company, and the post
master general having the assistance of AS
sistant Attorney General Whaling 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
instance the telegraph companies were CON
suited as to what they could afford to do the
service for In two instances Postmaster
General Jewell and Postmaster James, at
the instance of the telegraph companies re-
called and modified their orders after they
had been officially proclaimed The
language Of the act that messages between
ha rf mo mt
''shall have priority over all other business
at such rates as the postmaster general shall
annually fix" may be construed as con-
templatng the fixing of higher rate than is
paid by other patrons because of such priority
in transmission over all other business. Ger
tainly IL never contemplated comforting the
power to fix the rates below the actual cost
of the service Such action is nothing short
property and service of employees to the use
of the government without just compensa.
tion therefor.
THE RATE AS LAST FIXED.
Twenty-Five cents for twenty words or less
for distances of ,00O miles or less and cent
per word for each additional 100 miles or
fraction thereof, is for distances of about
1000 miles (as between Washington and
New York and St. LOUIS, or Chicago),
scarcely one-half the rate paid by the public
on current messages. For distances of 800
miles and under 1t is about three-fourths the
commercial rate. Our gross receipts for the
last fiscal year, as shown by the annual
report were sl9,7ll, ,i64,12, and the current
working expenses were sl4, $40 592 1S, leav-
ing the profits $5,070,57l,94 out of which
1886, 25S.30 was paid for interest and the
sinking fund on the bonded debt, which Is
part of our capitalization. 1t will be readily
seen that the working expenses without
any return for any part of the capital, costs
within a fraction Of 75 per cent of the total
earnings. If, therefore, the government
rate averages less than rs per cent of the
rate TO the public (as 1t undoubtedly does),
then the government business is now done
at a loss.
The annual report shows the average cost
to the company of handling messages TO be
2.3 cents per message.
II the government business does not pay
something more than this average then II
must be done at loss, for the messages, in
order to yield such an average, must be con-
siderably above the average length of busi-