New-York tribune., 1919-05-29
Broad Government Policy
Needed to Prevent Heavy
Losses and Disaster TO
Companies, He Points Out
Calls Postal Share Small
Mackay Terms Statement
Effort to Keep Up Rates
and Help Western Union

WASHINGTON, May 2S.-Postmas-
ter General Burleson, in a letter to-
day to Chairman Sims Of the House
Commerce Committee, declared that
the present situation with respect to
the telegraph and telephone systems
required the determination at this
time of broad government policy
rather than the Immediate return Of
the lines to their owners as provided
for IN the resolution introduced by
Chairman Stevenson of the House
Postoffice Committee.
Mr.. Bureson's letter was in reply to
enc from Mr.. Sims relative to the state
ment sent to members of Congress bv
Clarence H. Mackay, president of the
Postal Telegraph Cable Company, who
referred to immediate passage of the
Steenerson resolution and offered to
reduce the telegraph rates for his
company 20 per cent. The Postmaster
General said casual examination of
telegraph operations "disclosed that
this company in 1918 carried only s14-
93O,S96 out Of total of 100000 900 of
the telegraph business" and that the
saving to the public (Which Mr. Mackay
asserts ne can accomplish by a 20 per
cent reduction would necessarily be
limited to $3,OO0,ooO annually instead
of $4,000, ,OO0."
Fears Consequences
In the situation now presented"
wrote Mr.. Burleson, ait would seem to
be matter of public concern. of which
Congress might we'll take cognizance.
that the present high operating ex
penses have made it impossible to op
crate these properties at the present
charge for service. To turn them back
without making some adjustment which
would enable the companies to resume
their operation on a basis comparative
ly equal to that in which the govern
ment took them would affect their
financial standing materially and in
some cases, in my opinion, DISASTROUS
~, and would cause not only the in
vestors but the public to suffer"
When shown the letter of Postmas-
ter General Burleson to Representative
Sims regarding the telegraph situa-
ton, Clarence II. Mackay, president of
the Postal Telegraph Gable Company,
said yesterday:
Mr.. Burlesons statements do not
bear analysis. He says that the West
ern Union does several times as much
business as the Postal, and yet admits
that 1t cannot compete. Everybody
knows that large business car be
handled more cheaply in proportion
than a small business. When
MIR. Burleson says that the Western
Union does three or four times as
much business as we do, but it cannot
compete, he is practically saying that
the Western Union is badly managed.
which is true
"Why Pay for Waste?" He Asks
And yet why should the public nav
for the waste and extravaganza of
Western Union management bv in
creased telegraph rates? We know how
the Western Union money goes. For
instance, it has a horde of solicitors
who don't create telegraph business,
but merely try to get telegraph bust
ness from the Postal Telegraph Com
pany.
Furthermore, what business is it Of
Mr.. Burleson Has he a mandate from
Congress to protect the Western Union
against the competition of the Postal
Telegraph Company? Who authorized
him to insist that the increase in telc-
graph rates shall continue after he let's
go of the telegraph lines? 1t is bad
enough for the Western Union to plav
the baby act On what theory is Mr.
burleson shielding the Western Union
from competition?
The sinister feature of this whole
letter OF Mr.. Burleson's is his pur-
pose. We know what that nnr-
pose is. His purpose is to so democrat
lze the Postal Telegraph Company that
1t cannot afford to strike off the %
per cent Increase, or to bulldoze and
pull 1t down to earth until it consents
not to strike off the 20 per cent in
crease when Mr.. Burleson turns bacl,
the lines. These are desperate moves
across the chess board, but Mr.. Rur-
leson seems willing to make them
Why does he do it ?"