The San Juan islander. [volume] (Friday Harbor, Wash.) 1898-1914, 1909-01-23
FOR POSTAL
TELEGRAPH
SENATOR LA TOILETTE OF
WISCONSIN PREPARING
A MEASURE
To Be in Line With Recommends
tons Following an Investigation
Made by the Bureau of Com
merce and Labor at the Request
of the Senate.

Washington, D. C., Jan. Ex-senator
La Toilette of Wisconsin has In prep
aration a bill to make telegraph COM
panies part Of the postal service. This
is in line with President Roosevelt's
suggestion that the telegraph be
placed under government supervision.
Also in line with a report soon to be
made by the bureau of labor in re-
Spouse to a senate resolution calling
for an inquiry into the telegraph bust
ness.
Originally, the government owned
the telegraph. In 1874 congress ap-
propriated $4,000 to build the first
telegraph line, which was between
Washington and Baltimore. This was
under government management and
ownership until 1S47, when, as the re-
suit of mistaken notions of economy,
it was turned over to private owner
ship.
earnest protest of such public men as
Henry Clay and the then postmaster
general Cave Johnson. Professor
Morse, the inventor of the telegraph,
believed strongly that the government
should operate it exclusively as an
instrument for conveying intelligence,
just as it operates the mails. He
voiced these opinions emphatically at
various hearings held by congressional
committees.
The investigation of the bureau of
labor has shown that the telegraph
business has been immensely profita-
BILE. Although there has been a slight
falling off in the returns during the
last year or so when the earnings of
the companies covering the long peri
cd between 1847 and the present time
are summed up, it is found that the
returns have been almost beyond be-
lief. The total physical assets of the
companies could, it is found, be repro
duced at cost of about $36,0O0,000.
The companies, however, are now
paying dividends on capitalization of
something over $100,000,O00. The to-
tai amount represents, in large part,
stock issued as dividends, or for the
purchase of other companies at exorbi-
tant prices Former Postmaster Gen.
eral Wanamaker, when trying to Sc
cure postal telegraph, investigated
this subject and came to conclusions
which he stated as follows:
According to uncontroverted state
ments made before your honorable
committee, the capital stock of the
Western Union Telegraph Company in
1858 was $35S,700. The stock divi-
dends declared between 1858 and 1866
amounted to $17,81O,146, and the stock
issued for new lines was $l,937, $50,
so that the capital stock on July 1,
1866, was $2O,1S3,8OO.
"In 1866 new stock was created to
the amount of $2O,45O, 500, so that the
total capital of the Western Union on
the first of July, 1867, was $40,568, 300.
The largest dividend declared by the
company up to 1874 was 414 per cent.
The largest amount of stock ever di-
vided at one time was $10,OO0,O00, and
for a period of seven years the divi-
dends were about 100 per cent a year
on it's average capital.
cit was by adding dividends to divi-
dends and by piling the one up on top
of the other that this tremendous
amount of $46,O0O,OOO of capital stock
and debt was created. The history
of the company shows no change of
policy.
"In 1874 the company bought up its
own stock and the stock of other tele-
graph companies and accumulated a
fund of over $15,O00,000, which was
held in one shape or another in the
treasury of the company. An invest
ment of 81 900 in 1858 in Western I'm
ion stock would have received up to
the present time (1890) stock divi-
dends of more than $4,000 and cash
dividends equal to 100000, or 800 per
cent of dividends year.
these have been some of the divi-
dends declared: In 1862, q per cent;
in 1868, 100 per cent; in 1864, 100 per
cent; in 1878, $6,ooo,oOo; lin 1881, one
of $15,OO0,0OO and another of $4,300,-
900; in 1886, Is per cent. The West
ern Union plant, exclusive of its con-
tracts with the railroads, could be du-
plicated for 100000. It's present
capital is $85, $50, 900. It has realized
500, zoo, 900 of net profit in twenty
five years by its high charges"
1t will be pointed out by Senator La
Toilette in his argument on this sub
ject that the enormous profit OF the
telegraph business might well have
been used to wipe out the deficit In
the postoffice department and to i'm
prove the postal and the telegraph
service. 1t is the belief of good au-
thorities that lower telegraph rates
would have resulted in a greater use
of the telegraph and would in the end
have brought greater profits.
This has been the experience OF all
the principal nations of the world. For
in almost all other countries the tele-
graph systems are under government
supervision or ownership. It is often
stated by interested parties that these