Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1909-11-30
SCHEME.

It was capable OF embarrassing the
Western Union greatly. and could doubt
less, II properly handled be landed" on
the Western Union at a profit, which
would be we'll enough as far as II went
but this was not the large result Mr.
Gould had in mind. He had not himself
designed the Atlantic and Pacific. He had
merely gone into it. He made up his
mind to get out of 1t on the best terms
he could make. The rate war lasted about
two years. and then the Western Union
made terms. It gave 1880 shares of it's
own stock and $912,500 cash for 72.5Oo
shares of Atlantic and Pacific stock That
was a little more than half. Messrs. Sage
and Keene delivered the stock; Jay Gould
did not appear openly in the transac-
ton.
Union would simply hold the stock; that
the Atlantic and Pacific Telegraph com.
pany would be separately operated, and
that with the cessation of wasteful COM
petition, IL would be possible to orga-
nize a service which would be more re-
munerative TO the companies, and. at tho
same time, more advantageous for the
public This announcement might almost
have been copied from the records for
use in this weeks discussion Of the West
ern Union Telegraph and Telephone deal.
and Pacific Telegraph company, that OF
December 81, 1878. showed that 80 miles
of poles, 9S6 miles Of wire and SO offices
had been abandoned for the sake OF
economy.
jay Gould then proceeded TO design a
telegraph company of his own. He gave
II the name of the American Union. He
orsanized a construction company to
build the telegraph lines, and owned the
I TRIARTanh lines
were rapidly constructed in that day. BY
1879. the American Union was In po-
sition to offer the Western Union forni-
dable competition in some Of its most
productive territory.
A GAME OF BLUFF
II was formidable. but not disastrous
competition for the Western Union. Rates
came tumbling down between competitive
points. but these points represented all the
territory of the new American Union, and
only a part of the territory of the West
ern Union At competitive points, the
Western Union was compelled TO lose
money. but nowhere else 1t had the prof
It's of business at all other points to fall
hack upon. The American Union lost
money on all the business 1t did. sur
vivinR associate Of Mr.. Gould remarked
this week that it was the most outright
game of bluff he had ever witnessed. The
Vanderbilt interest, who controlled the
Western Union, had only to fight back
and the game was theirs. because the
American Union was losing money every
oay. and becoming a severe drain upon
the private resources of Mr. Gould
But Gould had other ways of fighting
He controlled many miles Of railroad, in
Guiding the Union Pacific, and most of
his railroads were in contract relations
with the Western Uunion. To abrogate
the contracts meant litigation. Mr.. Gould
first seized the Western Union lines on
his railroads, and let the Western Union
start the litigation. He had influence with
railroads he did not control. Thus, the
Pennsylvania railroad had to be enjoined
from summariIy ejecting the Western
Union from its property, as, in fact, 1t
did % years later. Finally. Mr. Gould
had ways OF fighting in the stock mar
ket. He was a very canny manipulation.
western Union. was a Vanderbilt stock.
well distributed even then among invest