Los Angeles daily herald., 1889-11-14
GOVERNMENT MESSAGES.
More Correspondence on this
Subject.
The WESTERN UNIONS PROTEST.
The Company Will Not Transmit
Dispatches at the Postmaster
Generals Figures.


Associated Press Dispatches to she HERALD
New York, November 13.-The fol-
lowing correspondence is made public
today:
New YoRK, November Il, 1889.
Hon. John Wdnamaker, Postmaster Gen
eraI, Washington, ID. e.:
DEAR SrR-I have your favor OF Octo-
Der 3Oth. enclosing your official order Of
same date, purporting to fix the rates for
Government telegraph service for the
fiscal year. Ths order has hsd oil the
careful and deliberate consideration th at
an official document from such high
source is entitled to receive, and after
such full consideration tho Executive
Committee OF the Board of Directors has
expressed itself unanimously in a pream-
bic and resolutions, a copy OF which 1
enclose to you herewith.
From the rates fixed last year, which
were not remunerative, your present
order makes an average reduction of q
fraction over forty per cent. On mes
sages transmitted less than four hundred
miles, which embrace the larger mum Der
of Government messages, the reduction
is fifty per cent, and on transcontinental
messages the reduction is from fifty to
twenty cents each ON the minimum mes
sage, or sixty per cent. On the Signal
Service OF the War Department, COM
monty known as the Weather Reports"
che reduction is sixth, or something
over sixteen per cent.
The statement upon which you pre-
sumo that no question can arise as to the
fairness of these reductions, is that "the
reduced rates hereby determined are
practically the same as those upon which
one of the divisions or departments OF
your company, as well as one of its
principal competitors, transacted busi-
ness for the public generally for con-
siderable time" The fact that the
Mutual Union Telegraph Company, q
small organization belonging to this
company, did for time meet the Balti-
more and Ohio Telegraph Company in
sending messages shors distances, and
between very few points, at 10 cents,
is no evidence that no loss of money is
involved. If those companies had
made, as you propose, rate of 10 cents
between all points less than 400 miles
distant from each other, the Baltimore
and Ohio telegraph system would have
been sold out by the Baltimore aud Ohio
Railroad Company as bad Investment
long before it was sold, and that rate
would have reduced the EARNINGS of the
Western Union Telegraph Company be-
low it's actual expenses in that import
Il ,,rk,,. - t,,1os
entire message business OF this company
for the fiscal year just closed had been
sent at the rates named in your circular,
our total receipts from that source would
have been about four million dollars less
than the actual cost to us of transacting
that business.
If the messages cent by the Govern
ment were equal in number for the sew
eral distances, the rate named in your
circular would average Is cents fer the
minimum message of ten body words,
estimating ten words free for address
and signature; but as very much the
greater number would be sent distances
under 400 miles, and ct the lowest estab-
lished rates, it is probable that an aver
age of Is cents would allow for two or
three additional body words in each
message. If the whole of the 81, los 1926
messages sent during tne last fiscal year
had paid US but an average of 10
cents, the aggregate revenue for trans
mitting the messages would be $S,116,-
24S90. Our total expenses were $14,-
-565. .152.61. After dsducting from the
expenses the amount paid other lines,
the refunds and rncollected items, the
rental and operating cost OF our Atlantic
and Cuba cables, the cost of maintaining
leased lines and the rental for and eX-
penses of the gold and stock and COM
mercial news department, there are still
left as expenditures strictly pertaining to
the handling OF messages $l2, lis, ,56l IL,
which the eutica revenue at the rates you
name would lack over four million dol
lars Of meeting
Even if the Government messages
were much longer than 1 estimate, aud
should yield, which is scarcely possible,
an average Of twenty cents each, and all
our business were done at that rate,
there would still be deficit of about two
million dollars in this department OF our
service.
Commodore Vanderbilt once met the
attack of a competing line of steamers by
establishing passenger rate of ten cents
between New York and Albany. No
body supposed that ten cents was a re-
munerative rate for 30 long passage,
but the move proved effective because it
enabled the Commodore to buy the COM
peting line without paying speculative
price for it. Such course is sometim es
entailed by circumstances upon the COM
pany. Competing companies are often
formed not for business profits, but to
force us to buv them out or retire from
the field. When such competition
occurs it is transient and isolated fes-
ture OF our business. To seize upon one
such feature, and 80 far rs your office as
an umpire may control, to make that the
basis OF a rate to be charged on Govern
ment business, seems to US not judicial,
but vindictive. Il is this view you have
taken which we especially regret. We
may seem to deserve reprehension, but
the statute under which ycu are working
is judicial and not penal.
The award made annually by your
predecessors has sometimes subjected us
TO injustice, but we could ascribe to
erroneous judgment the fixing OF o rate
designed to remunerate us for the SER
vice, but which, in fact, imposed loss
ut>pus. We have borne the losses in such
cases without complaint, even yielding
to the wishes OF the department. to have
the messages sent by them not confined
to the definition OF the statute, but to in
clude all their official business. Upon