The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-03-18
H TELEPHONE FIELD
WAR LIKELY BETWEEN THE WEST
ERN UNION n BELL COMPANIES.
A Battle for Supremacy Caused by the
Spirit or a Contract.

Spirit OF a. Contract.
Chicago Tribune.
Unless all indications are misleading the
United States in less than two years may
be the scene of a battle for supremacy in
the telephone field between two of the great
est vested interests in the world. There
have long been rumors that the Western
Union Telegraph Company was SO much
dissatisfied with what it claimed to be a
violation of the spirit of the contract exist
ing between it and the Bell Telephone
Company that it proposed to enter into the
telephone field itself. All the information
that is obtainable points to the conclusion
that the great telegraph company has about
reached a determination to meet the Bell
company on its own ground when that con-
tract ends.
The key of the situation with respect to
this move is to be found in the fact that
the contract in question expires in 1897. 1t
has been generally supposed it had a much
longer time to run. When it was entered
into years ago its intent was to divide
the ! electrical business of the country so
far as. the transmission of sound and Sig
nails was concerned. The Western Union.
shortly after the telephone was perfected
into something more than a toy, inaugu-
rated q telephone system of it's own under
the Gray patents. 1t was speedily found
by the Bell company that the Western
Unions rivalry was dangerous and, on the
other hand. the Western Union was made
to believe that a working agreement with
its principal opponent would be advantag-
eous. Negotiations for a contract were ac-
cordingly entered into between the two
companies, under which the Western Union
undertook to retire from the telephone
field during the lifetime of the agreement.
II ,-,- -aIA. - h4-1fAfA.r of tI0
business to the extent of receiving a certain
sum for each instrument per year. The
on a business which should in no way
compete with the business of the telegraph
company.
SPIRIT OF CONTRACT BROKEN.
During the first few years the agreement
worked to the satisfaction of both sides.
Later on, however, the Bell company en-
tered upon operations which were declared
to constitute a violation of the spirit OF the
contract. 1T began building iong-distance
wires to be used for telephoning. 1t went
beyond this and equipped the wires with
Morse instruments and leased them to
brokers in competition with the leased wire
service of the Western Union. Vigorous
circumstances were made by the Western
Union, but the Bell company took refuge
behind the corporation known as the Amer
lean Telegraph and Telephone Company.
which carries on the long-distance telephone
and the telegraph business mentioned. AL
though il was well known that company
was of Bell creation the Bell claimed it
was an independent corporation. The al
legged irregular Morse telegraph service, it
is said, was being carried on by an outside
corporation, and if the letter and intent of
the agreement with the western Union
was being rudely disturbed the fault lay
with the wicked partner, the American
Telegraph and Telephone Company afore-
said.
its long-distance wires equipped with Morse
Instruments as a collateral feature until 1T
has created a service of many thousand
miles thoroughly systematized and so well
managed as to constitute an indirect compe-
tition with the Western Union. Not a step
in this policy of aggression has escaped the
Western Union people.
1t has Away had a large number of men
in the field under the control of its construc-
tion department. In the last two years It's
construction gangs have been increased and
the company has strung an enormous mum,
Der of copper wires. 1t has not only pulled
down wires which were in good order and
but it has, moreover, erected these ex-
pensive lines largely in, advance OF the com
rany's needs. The result of this work Is the
copper circuits much greater than that OF
the American Telegraph and Telephone
saunders are ticking to-day. It would be an
operation Involving only a few months to
rip out all the Morse Instruments and in
their places connect telephones.
The Supreme Court decision in the Bate
best informed electrical men to have com
pletely destroyed the more valuable tele-
phone patents. 1t is asserted by m ne tWs who
the Bells hold upon the telephone system of
the country. SO far cas- the Patent Office is
concerned, has been shaken loose forever.
The roain patents hcv'- Aaa~ sa~t~o ~ IT
is possible for the Western Union to secure
the best Telephone instruments ava liable at
simply the cost of manufacture. Its cleo
tricians and inventors could easily construct
the minor features OF q telephone service IL
any were needed.
WILL CAUSE A GREAT WAR.
If the Western Union enters the field at
the expiration of it's contract with the Bell
Telephone Company, which, as said, is less
than two years hence, it will begin opera
tons in such a way as can hardly fail to
precipitate a great war. This will be due
to the vast difference between the manage
ment and the financial organization of the
two companies. The telephone business, as
conducted by the American Bell Telephone
Company, is a vast system of wheels within
wheels. The whole country is allotted to a
subordinate company OF the American Bell.
In each district controlled by these subor-
dinate companies there are innumerable lit
tie companies. The controlling interest in
all of them is held by the American Bell.
1t is alleged that great numbers of the
companies within the American Bell Tele-
phone company are stocked and bonded so
for the Bell company to reduce IT'S toll
rates generally and meet the fixed charges
which stick to its organization.
than a subscriber pays. IN Chicago, for
instance, a telephone costs the local com
pany a little over 81 a year. These figures
may be an exaggeration, but they are fur
nished by telephone men. While there is APP
parently a wide margin between the cost
of operation and the average charge paid by
subscribers, and the profits would seem to
be immense, it is said the closest manage
ment is necessary in order to pay the vast
load of interest charges and dividends which
the security holders have learned to expect.
and without which the stocks of the COM
pany would be greatly affected in the mar
kets.
All over the country rivals TO the Bell
are springing up. The Harrison Telephone
Company, of this city, has invaded its ter
ritory in many places. The Bell has cut
under the Harrison charges in some In
stances two or three times. II is said in
a fight with rivals of this kind it might
win by whipping them in detail. provided
the process did not have to. be indefinitely
prolonged.
The Western Unions financial organiza-
tion is wholly different. The company Is
one of the best managed corporations IN
the world. 1t has only two accounts on
its books-receipts and expenditures. AZ
the present time the rivalry to, the Western
Union is comprised in the Postal Tele-
graph Company and the Long Distance
Telephone Company. 1t is admitted 20 be
as sharp a competition as any the tele-
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