The representative. [volume] (St. Paul, Minn.) 1893-1901, 1895-06-26
GRIP OF MONOPOLY.
A UNITED STATES SENATORIAL
INVESTIGATING COMMIT
TEE SHOWS
The Tremendous and Far.Reaching
Power of the Western Union
Telegraph Company,
Over the Commercial and Financial
Destinies of Seventy Millions of
People of the United States.
INDEPENDENT NEWS BUREAUS
CRUSHED BY THE MON
OPOLY.
Enormous Public Burdens Because
of Watered Western Union
Stock.
Cenorship Over the Press-Double
Charges For Independent
Papers.
EVEN THE RAILROAD COMPAN-
les IN THE GRIP OF THE
WESTERN UNION.
INDEPENDENT NEWS BUREAUS
CRUSHED BY THE MON
OPOLY.
Enormous Public Burdens Because
of Watered Western Union
Stock.
Cenorship Over the Press-Double
Charges For Independent
Papers.
EVEN THE RAILROAD COMPAN-
les IN THE GRIP OF THE
WESTERN UNION,
(The New York Voice.

(4uo ANcW IOEh VOlCcsD
For the last ten years, the senator
ial investigation into the affairs of
the Western Union Telegraph Com
pany. conducted by the committee on
post-offices and post-roads in 1884. has
been authoritative for Congressional
debating purposes. The members of
that committee were:
Messrs. N. P. Hill, of Colorado;
Philetus Sawyer, Wisconsin; William
Malone, Virginia; Thomas w. Palmer,
Michigan; James f. Wilson, Iowa; S.
B. Maxey, Texas; Eli Salisbury, Della
ware; James B. Groome, Maryland,
and Howell f. Jackson, Tennessee,
now of the United States Supreme
Court.
The committee was instructed to
inquire whether the cost of tele-
graphic correspondence between the
several states or with foreign coun-
tries had been in juriously affected by
the large stock dividends made by the
Western Union Telegraph Company,
!. IS consolidation o. companies, by
contracts with cable, companies, by
leasing lines, etc. The report gives
the following financial history of the
Western Union:
SENATE INVESTIGATING COMNIITTEE's S
REPORT.
SIN 1863 it's stock capital was only
$3,O0O.O00, and even of that amount
small as it seems in comparison with
the present capital stock of $50, 900,
600, it is quite certain that at least
five-sixths consisted of what is known
in stock manipulations as "water. "
The original line of the Western
Union was from New York to Louisville
via Buffalo, Cleveland, and Cincinnati,
and was constructed at cost of
about $150,0O0. 1t early acquired by
purchase, at very low ra tes, the prop
erty of embarrassed Western tele-
graph companies owning lines from
Buffalo to Milwaukee and from Cleve-
land to Cincinnati, and built line
from Pittsburgh to Philadel phia, but
even then its actual cash investment
is affirmed by those who have care
fully investigated the subject not to
have exceeded $3OO,OOU.
STOCK DIVIDENDS THRICE DOUBLED
WESTERN UNION PROPERTY.
"In 1863 the stock property was
doubled by stock dividend, and dur
ing 1s63-64, $5,OO0.OOO was added to
represent extensions and purchases of
new lines paid for in stock. The
capital, being thus swollen to 11,OOO,-
600, was in 1864 doubled by a stock
dividend and thereby made $22, 600, 900.
"The year 1866 was memorable one
for new consultations, the stock capi-
tai having then been increased to $4l,-
1000 by the issue of $4,000, 900 of
new stock. Since 1866 the stock capi-
tai has been carried up to it's present
amount of $50, 900, 900, partly by the is
sue of stock for the purchase Of new
lines. but mainly by the three follow
ing stock dividends: In 1879, $780,.
600; 1881, $15, ,526, $50 and $4,32O, 900:
total $25, S07, 100. 1t is not necessary
to comment upon stock dividends, the
nature and effect Of which are well
understood. In respect to the issues
of stock for purchases Of other lines,
the prices paid have no relation either
to tue cost or to the earning capacity
of the property. The purchases were
Influenced, in some cases, by the de-
sire to get rid Of competition, and in
others by the fact that the persons
controlling the management of the
Western Union had large interests in
the property purchased. In pur-
chases prompted by the latter motive.
the higher the prices which we're paid
the greater were the gains of indiyid.
uals in the control of the Western
Union.
HOW A GREAvT MONOPOLY GREW.
'In 1881 the Western Union paid
$15,000,O0 of it's stock for the stock
and bonds of the American Union
Telegraph Company, and $4,OSO, 600 of
its stock for all Of the stock which it
did not already own of the Atlantic
and Pacific Telegraph Company.
From comparison of the annual re.
ports of the Western Union it appears
that the addition to It's property was
greater in 1881, when these purchases
were made, by only 1915 miles OF
poles, 46, Ill miles Of wire, and 800 of.
fees. This excess of addition to the
equipment in 1881 seems to be tOler-
ably correct measure of the tangible
property which the Western Union
acquired by issuing SIS, ,OSO, 900 of stock
In 1881; and il it IL, the actual cost