Evening star., 1934-10-28
D. c. Hearings to Weigh
Question of Enabling
Law in Congress.
OTHER ISSUES RAISED
BY LOSSES AND LABOR
Postal and Western Union Ex-
pected to Find Solution-Theory
of Fewer Jobs Doubted.
BY RAIDER WINGET,
Associated Press Financial Writer.


NEW YORK, October 27.-Three
major hurdles appeared today in the
path Of any possible merger of Ameri-
can communication systems - law,
labor and losses.
Since the latter part of the nine
teenth century, each of these factors
has grown large or dwindled by turns
in the recurrent talk of consolidation.
but today there appears no feeling of
sentiment such as has appeared in the
past TO overwhelm corporate team
work.
The entire question will be brought
before the Federal Communications
Commission in Washington December
3 in hearings leading to possible ~
concentrations to Congress for enabling
legislation.
The outstanding question before the
commission, it is felt in Wall Street,
is the often proposed merger of West
ern Union and Postal Telegraph.
Fears Of Labor Cited.
Parties to the undertaking, as seen
here, are Western Union, International
Telephone & Telegraph, which owns
Postal; American Telephone & Tele-
graph and Radio Corporation of
America. Also in the picture are the
Government as represented by Con-
gresS and labor as represented by
various labor unions.
If Congress should enact legislation
permitting a possible Postal Western
Union consolidation, the first cry
against it is seen coming from labor.
There are about IL 900 Postal employees
which some factors say would be
thrown into the list of unemployed.
Others say, however, that the COM
bined companies could absorb all en-
ployes and adjust the service by not
taking on any new personnel.
The third adverse factor, as en-
ViSiOned by many, is losses. Postal
has shown figures in red ink of late in
handling its approximately 20 per cent
Of the telegraphic business I. r. g.
T. would be glad to get rid Of this
Improbable subsidiary, but the ques-
ton arises whether Western Union
would be willing to pay price high
enough to satisfy I. T. & T. for the
privilege of adding 20 per cent to its
gross income. At the moment. it is
felt in informed circles that Western
Union would not.
Price Not Mentioned.
No price, however, has been men,
toned by either company, and it is
felt there is no path at present being
opened for them to come to an under
standing. If Federal legislation would
suggest merger, however, informed
circles believe there would be no i'm
passable barrier in the way of nego-
tiations.
A. T. & T. comes into the picture
less strongly now than in previous
years. In the late nineteenth CEN
tury, Western Union and telephone
interests agreed that neither would
enter the others field for a definite
period. That prevented direct COM
petition then and in succeeding years
the element of competition diminished
until A. T. & T recently began selling
its Teletypwriter service.
1t is said by some that telegraph
monopoly might produce rates that
would cut in on telephone long-dis-
tance business.
r. C. A. would have to be considered
strongly in any talk of merger. The
company operates land radio COM
munication, which is paramount to
the American land radio business of
Mackay (owned by I. T. & To, and
it is felt that wire telegraph monop-
oily set against a radio telegraph busi-
ness would bring protests. One source
of protest is seen as the Government
itself, which has fostered the growth
of radio communication as sort Of
national defense measure.