The Washington times., 1901-12-22

Union ana tle IOStal COMPANIES, lntiuu-
ing more than million miles of wire.
and all their leased lines, valuable plants
in all the cities OF the country. and sta
tions by the thousands. in almost every
town and village from ocean to ocean, to-
gether with the cables OF the Commercial
Cable Company tjhe owner of the Postal
Company for about tne estimated cost of
the Nicaraguan Caral
The par value Of all tne capitalization
aud bonded Indebtedness Of these two
companies and their leased lines is some
what more than SIZE. OO0. Some Of
these securities are selling above par and
some below. The largest block OF either
stock or bonds. the stock Of the western
Union Company, of which there is Sai.-
00o, 600. is at present quoted at So The
average value of the total block of stock
and bonds is somewhat more than par.
however, as some of the bond issues are
selling at fancy prices. II is ostmaed
that the total market value OF the entire
capitalization is about Sls0,009. coo.
The Government might pay market
prices for the securities or the
powerful people behind the companies
might be able to secure somewhat better
than market prices. If it we're decided
to buy the companies it is probable that
the market prices would advance some
what on account Of speculative purchases.
1t may be estimated safely, however. that
the entire telegraph systems OF the coun-
try would not cost the Government $780,
o00,oO0, supposipg that their owners OBJ
tanned the most favorable terms.
This purchase could be made splendidly
remunerative to the Government. or. in
stead of making It a source Of revenue. it
could be put on basis where il would
pay for itself simply ana the toll on tele-
graphic service could be cut far below the
present tariff.
Earnings of the systems.
II Government per cent bonds were
issued 10 pay for these securities II will
be seen that the Government would have
an annual interest charge on their ac-
count of 50. 600 GOO to $4,000, 600. IL is most
interesting TO note the net earnings of the
two companies at the present time as a
basis on which 10 figure how much the
Government would make by the purchase.
supposing that it should run the business
as economically as these TWO great cor
porations do. In round figures the com
bined net earnings OF the two concerns
are $4,000 600. The Government could
pay its interest charge out CT these earn
ings and have remaining as profit on the
transaction between 81. zoe 600 and S4, 500
600. This sum laid aside as a sinking
fund would pay OF the SiSo,09o.CO0 or
sa0t 100000 bond issue in about forty
years. and leave the Government owner
in fee simple Of an immensely profitable
business.
These figures. OF course. are all based
on present conditions. The change to
Government ownership would make the |
operation OF these big plants more expen-
siye in some ways undoubtedly, but in
others there would be immense saving. /
and it is entirely probable that the net /
cost would be smaller. The Government |
would have no competitor, for one thing, /
and it would not be necessary 10 operate |
two entire separate plants. The saving |
of expense obtained by combining the |
two would be large
The growth Of the business.
More than this, the growth OF the busi- |
ness would be steady and rapid At pres
ent message rates the gross earnings |
would soon far outstrip the receipts un-
der private ownership. And even if mes
sage rates were cut to a small part OF |
the present tariff it is estimated that
earnings at least as good as those OF
the present companies could be shown
Following are the items OF the capitali-
zation and bonded debt OF the Western |
Union Company:
Stock issued. ACKNOWLEDGEMENTS. s.. $40 600 I
Real estate bonds, per cent. 1.i5s, 600 /
Collateral trust bonds, per
cent. -.-.....-...........-. 500, GOO /
Funding and real estate mort
gage, AZ per cent............ 10,OO0. 900 /
Funded debt OF leased lines:
Mutual Union Telegraph. 1st
mortgage 6 per cent. 1857 900 |
Northwestern Telegraph. LIST
mortgage, per cent.......... 1.Is0 600
Total.........................SI2o,le7.o SI2o, ,le7 900
Guaranteed on leased lines:
American Telegraph and Ca
bic Company stock, per
cent on on-...;:.........:....... s14,OoOoOo
Gold and Stock telegraph
Company stock, per cent on.
international Ocean Telegraph
Company stock, per cent on 1000, 600
Northwestern Telegraph Com
pany stock, per cent on.... $500, 900
Total owned and leased
lines $l4f CO.. 900
In addition 10 this the Western Union
pays the Baltimore and Ohio Railway. /
and viii continue to pay IT. sec, 900 year
until 1887 on account of the purchase
price of the Baltimore and Ohio Tele-
graph Company, which was absorbed in
1887.
The similar figures for the Commercial
Cable Company which absorbed the Pos
tai Company in 1897, are as follows:
Stock. .-........-.-.. .s1S, 1888 300
First mortgage bonds. peg
CENT. ACKNOWLEDGEMENTS. 1892, 400
Sterling debentures, 1 per cent. S4G7,eOO
Total. .....-..-.............-.s s3i. .s33, 800
The total for the two systems is thus
sl76, ,0o0, 300.
Western Union stock is selling al pres
ent little above par. Commercial Ca
bic stock is selling a little above $50,
or about double the price of Western
Union. Dividends have been paid by the
woEtern Union Company ~ith remarkable
regularity for many yeats at the rate
OF per cent. Commercial Cable has
received q dividend OF per cent for
1--WE years. Previous 20 1897 the dividend
rate was per cent
The foiieTing table shows the business
OF the Western Union Company during
the past ten years, the extent q fits sys-
ten, the number OF messages sent, the
receipts, the expenses, and the net rev
ennes: II