Part 10

┌───────────┬────────┬──────┬──────────────┬──────────┐ │ NAME OF │ Number │Miles │ │Number of │ │ COUNTRY. │ of │ of │Rates in 1866.│Messages. │ │ │Stations│Wire. │ │ │ ├───────────┼────────┼──────┼──────────────┼──────────┤ │England │ 2,151│80,466│1 shilling. │ 6,127,000│ │France │ 1,209│68,687│½ and 1 franc.│ 2,842,554│ │Austria │ 851│73,854│ │ 2,507,472│ │Prussia │ 538│55,149│ │ 1,964,003│ │Belgium │ 356│ 6,146│½ franc. │ 1,128,005│ │Switzerland│ 333│ 3,717│½ franc. │ 668,916│ │Bavaria │ │ 4,945│ │ │ │Norway │ 73│ 2,710│ │ 269,375│ │Russia │ 308│37,330│ │ 838,653│ │Italy │ 529│22,214│ │ 1,760,889│ │Spain │ │ │ │ 533,376│ ├───────────┼────────┼──────┼──────────────┼──────────┤ │Netherlands│ │ │ │ │ │Denmark │ │ │ │ │ │Sweden │ │ │ │ 1,500,000│ │Turkey │ │ │ │ │ │Greece │ │ │ │ │ ├───────────┼────────┼──────┼──────────────┼──────────┤ │Total │ │ │ │18,640,243│ │Messages │ │ │ │ │ ├───────────┴────────┴──────┴──────────────┴──────────┤ │Average rate per message in Europe $0.42│ └─────────────────────────────────────────────────────┘

┌───────────┬────────────────────────────────────────────────┐ │ NAME OF │ │ │ COUNTRY. │ RECEIPTS. │ │ │ │ ├───────────┼────────────────────────────────────────────────┤ │England │£ sterling 521,707 × $4.84 = $2,481,500.00│ │France │Francs 7,707,590 × 0.20 = 1,541.518.00│ │Austria │Florins 1,644,742 × 0.41 = 674,344.00│ │Prussia │Thalers 1,275,785 × 0.72 = 918,565.00│ │Belgium │Francs 961,112 × 0.20 = 194,442.00│ │Switzerland│Francs 684,471 × 0.20 = 136,894.00│ │Bavaria │Florins 322,876 × 0.41 = 132,383.00│ │Norway │Rix Dolls. 343,645 × 0.53 = 182,131.00│ │Russia │Roubles 1,872,659 × 0.21–3⁄7 = 372,309.00│ │Italy │Lira 4,120,311 × 0.18–6⁄10 = 766,750.00│ │Spain │Dollars 554,475 × 1.00 = 554,475.00│ ├───────────┼────────────────────────────────────────────────┤ │Netherlands│ │ │Denmark │ │ │Sweden │ × 0.42 = 630,000.00│ │Turkey │ │ │Greece │ │ ├───────────┼────────────────────────────────────────────────┤ │Total │ Total receipts $8,585,311.00│ │Messages │ │ ├───────────┴────────────────────────────────────────────────┤ │Average rate per message in Europe $0.42│ └────────────────────────────────────────────────────────────┘

EUROPEAN TELEGRAMS COUNTED SEVERAL TIMES.

An examination of Mr. Hubbard’s statement of the number of messages sent in Europe, in 1866, will reveal the fact that he has included inland, international, and transit messages to make up the grand total. In this way he has counted the same message several times. For instance, messages sent from England to France, or any two contiguous countries, would be counted in each. Messages between France and Germany would be counted in France and Germany as international messages, and in Belgium and perhaps some other country as transit. The same would be the case between all European countries whose territories do not border on each other. A message going from France to Russia, or from England to Turkey, might be counted a dozen times.

In the United States each message is counted but once, although it may traverse thousands of miles in reaching its place of destination.

We have not the statistics to show what proportion the legitimate number of messages sent bears to this fictitious number; but by referring to the Belgian table it will be seen that 692,536 inland and 306,596 international messages were sent in 1866, in a total of 1,128,005. Taking this as a fair average for the whole of Europe, we shall find that only 14,012,795 messages were sent in 1866, at an expense, in United States currency, of $15,286,911.61, or about $1.09 each.

LABOR THE PRINCIPAL ELEMENT OF EXPENSE IN OPERATING TELEGRAPHS.

The principal element of expense in our business is the cost of labor.[24] If we can do our work as cheaply as another party, it is clear that rates can never be reduced below the point at which receipts and expenses are equal. Any material increase of business, no matter what the rates may be, must be attended with increased expense. And when the capacity of the wires provided for a particular service is exhausted, a new question is presented by the necessity for providing additional facilities. By the extension of our lines this year west of Chicago, and by the moderate increase in the volume of our business in that section of the country, it will probably become necessary during next year to provide two additional wires between Chicago and the Atlantic coast. The cost of these wires, if erected on poles now standing, will be about $120,000. We shall also be obliged to put up an additional wire between Washington and New Orleans, and between the latter place and Louisville. The cost of maintaining the lines will be somewhat increased by the addition of these wires, and the cost of operating at each end, and looking after them at intermediate points, must also be included. How is the additional capital necessary to provide such increased facilities to be raised? By reducing rates, the result of which is, that, even if gross receipts are not diminished, the expenses are increased? Is it not by gradually increasing lines out of current profits, and as gradually reducing rates after facilities for an enlarged business have been provided?

Footnote 24:

The Western Union Telegraph Company expended $2,573,434.80 for labor for the year ending June 30, 1867. See comparison of cost of labor in Europe and the United States on page 26.

PREVAILING ERROR OF ALL THEORIZERS ON THE BUSINESS OF TELEGRAPHING.

All theorizers upon the subject of the telegraph fall into the error that the amount of business which may be done at any point (the rates being low enough) is in the ratio of population. An investigation of the subject will show this to be entirely erroneous. Three years ago, when the subject of telegraphic communication between the Eastern and Western continents was discussed by those most intimately connected with the enterprise, no one estimated the number of messages which would pass between the two continents, daily, at a rate of $50 gold for ten words, below 500. But few placed the figures so low. Most of them estimated the number at two or three times this minimum.

In 1863 Mr. Cyrus W. Field made the following remarks before the Chamber of Commerce of New York, in relation to the probable amount of business that would be done between Europe and America when communication by telegraph should be established: “To express my own opinion, from pretty large experience on the subject, I do not believe that _ten_ cables would begin to do the work which would, in a short time, be given to it.”

At the banquet given in London, in 1864, to inaugurate the renewed attempt by the Atlantic Telegraph Company to unite Europe and America by means of the Atlantic cable, Mr. Cromwell F. Varley made the following remarks touching the amount of business that would be offered for transmission over the cable: “I feel great confidence that, when once a cable is successfully laid across the Atlantic, the demands upon it will be so great that you will have to lay one or two per annum for the next twenty years, or even more.”

Their disappointment was, therefore, very great when, after the Atlantic Cable was in operation, it was found that the daily average at the $100 tariff was but 29 messages, and at the $50 tariff, which was in operation thirteen months, it was but 64. At the $25 rate the average advanced to 131; and although the rate has been still further reduced to $16.85, the average is but 201. This illustration is sufficient to prove the fallacy of all reasoning concerning telegraph business based merely upon population. We venture the prediction that, at the rate of $5 between Europe and America, the number of messages which would pass per day would never equal the number exchanged daily between New York on one hand, and Philadelphia and Boston on the other. The reason is simply this: The number of messages which will pass within a given time between two points depends, first, upon a reasonable charge for transmission,—a charge conveniently within the means of those having occasion to communicate; and secondly and mainly, upon the number of people at either extreme having intimate business relations with those at the other. The vast commerce of the Old World and the New is not exchanged in detail, but in bulk. A few banking houses on each side make all the exchanges for both continents, and the agricultural products and the manufactures of both are also exchanged in substantially the same manner.

We have shown how fallacious is the claim that the increase of business is dependent upon the tariff, by the statistics of our own and foreign countries, by which it appears that business has sometimes largely increased at an advanced rate. We do not desire to be understood, however, as saying that low tariffs, under similar circumstances, will not bring more business than high ones. But we do say that it is susceptible of proof, that the minimum rate is undoubtedly much higher than most of those who theorize upon this subject are willing to believe. Take the case of the Atlantic Cable as an illustration. During the three months at which the tariff was $100, and the daily average of messages 29, the receipts per day were £505. During the thirteen months, at the average of 64 messages daily, the receipts were £579. During the nine months, at the average of 131 messages per day, the receipts were £635. And for the two months since the rates were reduced to $16, the daily average has been 201 messages, and the average receipts £596.

Now it happens, fortunately for the Cable Company, that the present volume of business is considerably less than the capacity of their cables; so that the increase of that business has been attended with but a very slight additional expense, the cost to operate being the same at offices open day and night, whether operators are occupied all or only a part of the time. But suppose, for illustration, that the limit of the capacities of the cables will be reached when the average number of messages per day is 250. To undertake to transmit any number beyond this without further facilities would result in crowding and confusing the business to an extent which would inevitably produce dissatisfaction. On the other hand, to provide an additional cable would cost a sum of money which it might be exceedingly difficult to raise. It seems proper, therefore, that the profits from this business should always be considerably more than enough to yield a proper return for the capital invested, so that greater facilities may be provided out of surplus profits; and, as facilities are increased, rates may be gradually reduced, until, by judiciously pursuing this course, the charges for telegraphing may be materially diminished, without endangering the revenues to which owners of telegraph property are justly entitled.

_Statistics of Traffic through the Atlantic Cables from July 28, 1866, to November 1, 1868._

┌────────┬─────────┬─────────────────────────────────────────┬───────┐ │ Number │ Daily │ │Average│ │ of │ Average │GROSS AMOUNT of RECEIPTS accruing to the │Amount │ │Messages│ No. of │TWO ATLANTIC CABLES, between Valentia and│ per │ │ per │Messages.│ Heart’s Content. │ Day. │ │ Month. │ │ │ │ ├────────┼─────────┼─────────────────────────────────────────┼───────┤ │ 1,104 }│ 29 │From July 28th 1866, under [25]£500 }│ £505│ │ │ │to 31st Aug., £20 Tariff │ │ │ 837 }│ │From Sept. 1st 1866, under 456 }│ │ │ │ │to 30th £20 Tariff │ │ │ 831 }│ │From Oct. 1st 1866, under 491 }│ │ │ │ │to 31st £20 Tariff │ │ ├────────┼─────────┼─────────────────────────────────────────┼───────┤ │ 1,530 }│ 64 │From Nov. 1st 1866, under [26]502 }│ £579│ │ │ │to 30th £10 Tariff │ │ │ 1,582 }│ │From Dec. 1st 1866, under 493 }│ │ │ │ │to 31st £10 Tariff │ │ │ 1,686 }│ │From Jan. 1st 1867, under 466 }│ │ │ │ │to 31st £10 Tariff │ │ │ 1,764 }│ │From Feb. 1st 1867, under 549 }│ │ │ │ │to 28th £10 Tariff │ │ │ 2,147 }│ │From March 1st 1867, under 666 }│ │ │ │ │to 31st £10 Tariff │ │ │ 2,624 }│ │From April 1st 1867, under 722 }│ │ │ │ │to 30th £10 Tariff │ │ │ 2,262 }│ │From May 1st 1867, under 705 }│ │ │ │ │to 31st £10 Tariff │ │ │ 1,843 }│ │From June 1st 1867, under 597 }│ │ │ │ │to 30th £10 Tariff │ │ │ 1,432 }│ │From July 1st 1867, under 542 }│ │ │ │ │to 27th £10 Tariff │ │ │ 1,693 }│ │From July 18th 1867, under 401 }│ │ │ │ │to 31st Aug., £10 Tariff │ │ │ 1,860 }│ │From Sept. 1st 1867, under 515 }│ │ │ │ │to 30th £10 Tariff │ │ │ 2,505 }│ │From Oct. 1st 1867, under [27]715 }│ │ │ │ │to 31st £10 Tariff │ │ │ 2,292 }│ │From Nov. 1st 1867, under [27]661 }│ │ │ │ │to 30th £10 Tariff │ │ ├────────┼─────────┼─────────────────────────────────────────┼───────┤ │ 3,901 }│ 131 │From Dec. 1st 1867, under [27]732 }│ £635│ │ │ │to 31st £5.5 Tariff │ │ │ 4,739 }│ │From Jan. 1st 1868, under [27]756 }│ │ │ │ │to 31st £5.5 Tariff │ │ │ 5,128 }│ │From Feb. 1st 1868, under [27]860 }│ │ │ │ │to 29th £5.5 Tariff │ │ │ 4,507 }│ │From March 1st 1868, under [27]707 }│ │ │ │ │to 31st £5.5 Tariff │ │ │ 4,320 }│ │From April 1st 1868, under [27]718 }│ │ │ │ │to 30th £5.5 Tariff │ │ │ 3,538 }│ │From May 1st 1868, under 550 }│ │ │ │ │to 31st £5.5 Tariff │ │ │ 2,884 }│ │From June 1st 1868, under 447 }│ │ │ │ │to 30th £5.5 Tariff │ │ │ 3,217 }│ │From July 1st 1868, under 490 }│ │ │ │ │to 31st £5.5 Tariff │ │ │ 3,740 }│ │From Aug. 1st 1868, under 558 }│ │ │ │ │to 31st £5.5 Tariff │ │ ├────────┼─────────┼─────────────────────────────────────────┼───────┤ │ 5,053 }│ 201 │From Sept. 1st 1868, under 501 }│ £596│ │ │ │to 30th £3.7.6. Tariff │ │ │ 6,341 }│ │From Oct. 1st 1868, under 615 }│ │ │ │ │to 31st £3.7.6. Tariff │ │ │ 6,877 }│ │From Nov. 1st 1868, under 670 }│ │ │ │ │to 30th £3.7.6. Tariff │ │ └────────┴─────────┴─────────────────────────────────────────┴───────┘

Footnote 25:

During this month over £100 per day were paid by the New York Herald for news reports, and many persons sent messages as a novelty.

Footnote 26:

During this month the despatches sent by the United States government averaged over £100 per day.

Footnote 27:

During these months there was extraordinary excitement in cotton.

A single wire between New York and Plaister Cove, Cape Breton, the eastern terminus of the Western Union Telegraph Company’s lines, not only promptly transmits all the telegraphic business that is done between Europe and America, but every message is telegraphed back for comparison with the original, to insure correctness.

PROGRESS OF THE ELECTRIC TELEGRAPH IN AMERICA AND EUROPE.

THE UNITED STATES.

The United States not only has the distinguished honor of being the birthplace of the inventor of the universally-used electric telegraph, but of having constructed the first line of practical telegraph, and of being the foremost nation in the world, at the present time, in the number of her telegraph stations, extent of her lines and wires, cheapness of her rates, and amount of business done.

The United States contains 4,126 telegraph offices; 62,782 miles of line; 125,564 miles of wire; and transmits annually 12,904,777 telegrams.

She has nearly as many telegraph stations as, and sends a greater number of telegrams annually than, all Continental Europe, and contains as many miles of line as Belgium, Bavaria, France, Great Britain and Ireland, Italy, Russia, Switzerland, and Spain combined.

PROPORTION OF TELEGRAMS TO LETTERS.

The proportion of telegrams to letters in the United States is difficult of determination, from the fact that our Post-Office Department furnishes no statistics of the number of letters sent through the mails, and has no means of ascertaining the number approximately, except by the number of stamps sold annually. This mode of estimation is very defective, because the stamps sold may not have been used, or if used, may have covered the postage on books, parcels, and other matter. The Postmaster-General states, in his report for 1867, that there were 283,762,300 three-cent stamps sold during the preceding year. Supposing each of these stamps to represent a letter, we have the following comparative result of the number of telegrams to letters in the various countries where the telegraph is most extensively used:—

Proportion of telegrams to letters in the United Kingdom, 1 to 121 Proportion of telegrams to letters in Switzerland, 1 to 69 Proportion of telegrams to letters in Belgium, 1 to 37 Proportion of telegrams to letters in United States, 1 to 22

EARLY HISTORY OF THE TELEGRAPH IN AMERICA.

During the first few years after the introduction of the electric telegraph its progress was very slow. Capitalists were afraid to invest in an undertaking so novel and precarious, and as a natural consequence there was great difficulty in raising funds for properly building the lines, and they were constructed in a very unreliable manner, breaks and interruptions being rather the normal condition of the wires than the exception.

At a very early period in the history of the electric telegraph in the United States, a misunderstanding occurred between the Morse patentees and a contractor under them, the result of which was that rival lines were constructed throughout the country before the system had been sufficiently developed to be remunerative, even without such competition.

The invention of the letter-printing telegraph by Mr. House, in 1846, and the introduction of the electro-chemical telegraph of Mr. Bain into this country, in 1849, greatly facilitated the construction of competing lines.

The first line operating under the House patent was completed in March, 1849, from Philadelphia to New York City. The Boston and New York Telegraph Company, using the same patent, was completed in the autumn of the same year, and was followed by one from New York to Buffalo, and subsequently to St. Louis and Chicago.

During the year 1849, which was very prolific in the production of competing lines, the Bain patent was introduced upon lines extending between New York and Buffalo, and New York and Washington, and, in the succeeding year, upon lines extending between Boston and Montreal, and Boston and Portland.

In 1851 there were seven Bain lines in operation in the United States, having over 2,000 miles of wire; eight House lines, having about 300 miles of wire; and sixty-seven Morse lines, having 20,000 miles of wire. In the autumn of this year, the Morse and Bain lines between New York and Washington were consolidated; and in the succeeding spring the Morse and Bain lines between New York and Boston were united under one company. The union of these lines was followed by that of the New York and Buffalo Morse and Bain lines, and subsequently by those of the House lines between these points.

EVILS ARISING FROM SEPARATE ORGANIZATIONS.

The consolidation of these lines was a step in the right direction, as it increased the receipts and lessened the expenses of the companies, while it enabled them to do the business better, by possessing greater facilities. Still, the great number of separate organizations remaining throughout the country prevented that unity and despatch in the conduct of the business so essential to its success. Under these circumstances, the public failed to realize the brilliant thought of instant communication between distant points.

A Boston house, doing business with Chicago, was obliged to be content with responses received on the second or third day. On Boston despatches for Chicago four tariffs were charged; and a message had to be copied off and handed over to other companies for transmission at New York, Buffalo, and Detroit, before it reached its destination.

All this process required time, and yet the loss of time was the least of the evils connected with such a state of things. The message, as it left the writer’s hands in Boston, was not unfrequently a very different document when it reached the Western parties, owing to errors caused by its numerous retransmissions, and thus the necessity became urgent to unite these separate companies into one living, vigorous organization, by which not only repetition and error might be avoided, but the messages followed to their destination under a single direction, and undivided responsibility.

THE UNIFICATION OF THE TELEGRAPH ACCOMPLISHED.