Part 2

In reply to the statement that our company is anxious only for profit, and that its charges are exorbitant as compared with those of other countries, we respectfully call attention to the following table, showing the average cost of telegrams in Europe and America for the year 1866.

AVERAGE COST OF TELEGRAMS IN EUROPE AND AMERICA FOR 1866.

_Official Statistics of the Telegraphs in Europe for the Year 1866._

┌─────────────┬──────────────┐ │ │ Total Number │ │ │ of Messages │ │ Name of │ transmitted, │ │ Country or │ including │ │ Company. │ inland, │ │ │international,│ │ │ and transit. │ ├─────────────┼──────────────┤ │Austria │ 2,507,472│ │Belgium │ 1,128,005│ │Bavaria │ │ │Denmark │ 308,150│ │France │ 2,507,472│ │Great Britain│ 5,781,189│ │ and Ireland│ │ │Italy │ 1,760,889│ │Norway │ 269,375│ │Prussia │ 1,964,003│ │Russia │ 838,653│ │Switzerland │ 668,916│ │Spain │ 533,376│ │Submarine │ │ │ Telegraph │ 410,760│ │ Co. │ │ │Malta & │ │ │ Alexandria │ 28,067│ │ T. Co. │ │ │Mediterranean│ │ │ Extension │ 77,400│ │ Telegraph │ │ │ Co. │ │ │ │ ———————│ │ │ 18,683,727│ └─────────────┴──────────────┘

┌─────────────┬────────────────────────────┬──────────────┬──────────────┐ │ │ │ │ │ │ │ │ │ │ │ Name of │ │Value in U. S.│Value in U. S.│ │ Country or │ Receipts │ Gold Coin. │ Currency.[2] │ │ Company. │ │ │ │ │ │ │ │ │ │ │ │ │ │ ├─────────────┼────────┬───────────────────┼──────────────┼──────────────┤ │Austria │Florins │1,644,742 x $0.48 =│ $789,476.16│ $1,168,424.71│ │Belgium │Francs │ 961,112 x 0.19 =│ 182,611.28│ 270,264.69│ │Bavaria │Florins │ 322,886 x 0.41 =│ 132,383.26│ 195,927.22│ │Denmark │Dollars │ 308,150 x 1.09 =│ 335,883.50│ 497,107.58│ │France │Francs │7,707,590 x 0.19 =│ 1,464,442.10│ 2,167,374.30│ │Great Britain│£ │ 512,707 x 4.86 =│ 2,491,756.02│ 3,687,798.90│ │ and Ireland│sterling│ │ │ │ │Italy │Lire │4,120,311 x 0.19 =│ 782,859.09│ 1,158,631.45│ │Norway │Dollars │ 343,645 x 1.09 =│ 374,573.15│ 554,368.26│ │Prussia │Thalers │1,275,785 x 0.72 =│ 918,565.00│ 1,359,476.20│ │Russia │Roubles │1,872,659 x 0.77½ =│ 1,451,310.72│ 2,147,939.86│ │Switzerland │Francs │ 684,471 x 0.19 =│ 130,049.49│ 192,473.24│ │Spain │Dollars │ 554,475 x 1.04½ =│ 576,654.00│ 853,447.92│ │Submarine │£ │ │ │ │ │ Telegraph │sterling│ 60,368 x 4.86 =│ 293,338.48│ 434,214.95│ │ Co. │ │ │ │ │ │Malta & │£ │ │ │ │ │ Alexandria │sterling│ 52,142 x 4.86 =│ 253,410.12│ 375,046.97│ │ T. Co. │ │ │ │ │ │Mediterranean│ │ │ │ │ │ Extension │£ │ 31,200 x 4.86 =│ 151,632.00│ 224,415.36│ │ Telegraph │sterling│ │ │ │ │ Co. │ │ │ │ │ │ │ │ │——————————————│——————————————│ │ │ │ │$10,328,994.37│$15,286,991.61│ └─────────────┴────────┴───────────────────┴──────────────┴──────────────┘ Average cost of telegrams in Europe 81⅚ cents. Footnote 2:

The Commercial and Financial Chronicle gives the lowest price of gold in 1866 as 124⅞, and the highest 167¾, making the average 148, which we have adopted as the standard value for that year.

_Statistics of the Western Union Telegraph Company of the United States and of the Montreal Telegraph Company, Dominion of Canada, for the year ending June 30, 1867._

┌─────────────────────┬───────────────┬───────────────┬───────────────┐ │ Name of Company. │Total Number of│ Receipts. │ United States │ │ │ Messages. │ │ Currency. │ ├─────────────────────┼───────────────┼───────────────┼───────────────┤ │Western Union │ 10,067,768[3]│ │ $5,738,627.96│ │ Telegraph Company │ │ │ │ │Montreal Telegraph │ 573,219│$258,000 gold =│ 381,840.00│ │ Company │ │ │ │ ├─────────────────────┴───────────────┴───────────────┼───────────────┤ │Average cost of telegrams in the United States │ 57 cents.│ │Average cost of telegrams in the Dominion of Canada │ 66 cents.│ └─────────────────────────────────────────────────────┴───────────────┘

Footnote 3:

These are exclusive of railroad messages, of which this company sends many millions per annum. In fact, the safety of all the roads in the United States is largely due to the free use of our wires in running trains.

The total receipts of the Western Union Telegraph Company for the above year were $6,568,925.36; but of this amount $521,509 were received for transmitting regular press reports on contract, and $308,788.40 from other sources,—leaving only $5,738,627.96 for telegrams.

Of the 10,067,768 messages sent during the year, 8,004,770 were on commercial and social matters, and 2,062,998 containing special press news, the latter amounting to 75,359,670 words.

Of the regular reports there were delivered to the press 294,503,630 words, which, allowing 20 words to each message,—the European standard,—would amount to 14,725,181 telegrams, in addition to the number given in the table. The average telegraphic tolls on these reports were three and one half cents for a message of 20 words, or one and seven tenths of a mill per word.

THE ASSERTED UNION OF THE POSTAL AND TELEGRAPH SYSTEMS IN EUROPE AN ERROR.

In referring to the action of European governments, in their early recognition of the telegraph system, Mr. Washburne says:—

“At once, after the invention and successful establishment of electric telegraphs, every government in Europe where lines were built, except that of Great Britain, established a telegraphic system in connection with its postal system. _Anticipating, as they might well do, that in private hands it might be so constructed as to draw to it, by its speed, safety, and economy, a large proportion of the correspondence, and thus become a rival of the post_, these governments, acting in the interests of the people, have made the system part and parcel of the postal system, and have thrown around it all the safeguards which in every civilized country the postal system enjoys.”

The above statement, with the exception of that portion printed in italics, is remarkably incorrect.

In no country in Europe does it appear that the telegraphic administration is connected with the post-office.[4] In France and Spain the telegraphs are under the control of the Minister of the Interior. In Russia, Prussia, and Italy they belong to the Ministry of Public Works. In Belgium the telegraph, railways, and the post-office form a general division under the Minister of Public Works, but are kept distinct. In Austria the administrations of the telegraphs and the post-office were at one time united, but it was found expedient to separate them. In Switzerland the telegraphic organization is nearly the same as Prussia’s; the post-office, customs, and private establishments supply the elements of an auxiliary staff, but all the persons employed in the transmission or delivery of telegrams depend on the administration of Telegraphs for their compensation, and in the annual budget an appropriation is made for that service distinct from the post.

Footnote 4:

Telegraphic Journal, (London: Truscott, Son, & Simmons,) Volume XI. page 131.

An effort was made in France in 1864 to consolidate the post-office and telegraph service, but, owing to the strong opposition evinced on the part of the chief functionaries of both services to such amalgamation, it was relinquished.

It was not until several years after the introduction of the electric telegraph in America that it was opened to the people by any European government. Even in France the electric telegraph was established as late as 1851, and its spread throughout the empire was exceedingly slow. The semaphore telegraph, a defective and inefficient system of conveying intelligence by the exhibition of signals,—introduced by Napoleon at the beginning of the present century,—was still in use, and, notwithstanding the manifest advantages of the electric telegraph, as shown by Arago to the House of Deputies, government long refused to employ it, and, when finally adopted, it was for some time used in connection with the old system.

THE SHORTCOMINGS OF BRITISH TELEGRAPHS.

Mr. Washburne says of the British telegraph:—

“In Great Britain, as in the United States, the telegraph was left to private enterprise and competition. Only a few weeks since, after a twenty years’ trial of the system in the hands of private companies, the people of the British islands, with singular unanimity, demanded to have the telegraphic system placed under the control of the postal authorities, and a bill was introduced by the present government for that purpose.”

It is complained of Great Britain, which provides one quarter of all the telegraph offices in Europe, that the telegraph companies there have left eighty-eight places in England and Wales having a population of two thousand and upwards, and even whole districts, without an office.

Whatever may be true of the meagreness of the provision of telegraphic facilities by English companies, and which these companies vigorously deny, no such complaint can, with justice, be made in the United States, notwithstanding the vast ranges of territory which must be traversed to meet the communities which need and ask for them.

Without intending any disrespect to the postal authorities of the United States, it may be said that the post-office system of Great Britain, because of the superior character of the control which long and careful study has enabled it to secure, is far in advance of our own. In fact, there is nothing more apparent to an English visitor than the low _status_ of our postal arrangements, as compared with that of his own country. It is natural, therefore, seeing the postal system so admirably managed, that English merchants, whose tendencies are all toward governmental direction in matters of this character,[5] should desire to see the experiment of a similar control of the telegraph. In fact, it is only this class of citizens who have asked for the change, the memorial having gone solely from the different Chambers of Commerce throughout the kingdom, no appeal on the subject having ever been made to or by the people of Great Britain, and therefore the assertion that the people with singular unanimity demanded it is not sustained by the facts.

Footnote 5:

Witness the proposition recently so much discussed in England, that the government should assume control of the railways also.

THE TELEGRAPH SYSTEM OF THE UNITED STATES UNPARALLELED FOR ITS EXTENT AND EFFICIENCY.

Mr. Washburne says, “There is abundant reason to believe that the telegraphic system of Great Britain, which is declared a failure on such high authority, is, in all respects, greatly superior to our own”; but he fails to give any of his reasons for this belief, and we are compelled to assert that it has no intelligent explanation except in a strangely morbid hostility to this company, which exhibits itself on every offered occasion. In all respects the telegraph lines of this country are equal to those of any other, and in some important ones superior. They extend from the Gulf of St. Lawrence to the Gulf of Mexico, and from the Atlantic to the Pacific Ocean, connecting in one unbroken chain more than four thousand cities and villages, forming a system by which every event of importance happening in any section of our vast territorial limits is published within a few hours in every other; through which verbatim reports of the speeches in Congress are transmitted from the capital to the metropolis, and full abstracts of them to every considerable town in the nation, on the day of their delivery; which supplies the metropolitan journals with more telegraphic news every day than is contained in the combined press despatches of Europe. Such a system, in its vastness, skilful manipulation, and the rapidity of its unceasing development, we believe merits the public approbation, and is not unworthy of the American name.

Our system of telegraphy is unique. Nowhere else can there be found such an extent of lines under one control. The lines of the Western Union Telegraph Company, extending throughout the United States and portions of the Dominion of Canada, enables it to transmit messages between every section of the country, without undergoing the delay of checking or booking at intermediate points; and between most of the large cities without retransmission. This work, over a territory so vast, although only two years have elapsed since the confederation of lines was effected which made it possible, is fast assuming, under increased care and enlarged experience, the certainty and uniformity of mechanism. In all its effective features, the world may safely be challenged to produce anything to compare with it. The extent of lines and wire belonging to the Western Union Telegraph Company is more than twice that of France, three times greater than that of Prussia, and equals the aggregated systems of Austria, Prussia, and the lesser German States, Italy, Spain, Belgium, and Switzerland, and it is increasing in larger ratio than any European system. The Western Union Telegraph Company alone has added to its lines, during the year 1868, more than five thousand miles of wire, or as much as the entire system of Belgium, leaving unsatisfied demands for an equal extension in the year to come.

ASSERTED EFFECT OF GOVERNMENTAL CONTROL ON BELGIAN TELEGRAPHS.

Mr. Washburne says:—

“In Belgium, where the telegraph has always been under the control of the government, the charge for telegraphing twenty words throughout the kingdom is half a franc, or, say ten cents of our money. In Switzerland the charge is the same. In both these countries offices are opened in nearly every town and village; in both telegraphing is reliable and certain; _complaints of delays and errors are almost unknown, and the lines in both countries yield large profits_.[6]

Footnote 6:

See official acknowledgment of inefficiency on pages 18 and 19; also, on page 96, an admitted loss in performing the service at established rates.

“In Belgium, in the year 1853, with an average charge of 5 francs and 7 centimes, or say $1.02 for twenty words to any part of the kingdom, the number of messages sent was 52,050, yielding, francs, 265,536. In the year 1866, with the charge reduced to about 17 cents for twenty words, the number of messages had increased to 1,128,005, yielding, francs, 962,213. The same remarkable increase is found in the statistics of the telegraphic system of all countries where the telegraph is under government control.”

If by the latter clause of this statement it is designed to convey the idea that government control, _per se_, stimulates the use of the telegraph, or that even a reduction of rates, without this control, is incapable of producing this result, it may justly be challenged as utterly unsustained by the telegraphic experience of this country. The coupling together of these two influences seems designed to prove that the one necessarily involves the other, whereas the question of rate is altogether independent of management, whether government or individual.

EARLY BELGIAN RATES CONTRASTED WITH AMERICAN.

Respecting the Belgian tariff of 1853, of $1.02 in gold per message, for a distance not exceeding fifty miles, it must be regarded as prohibitory, except to those whose necessities compelled its use. The American charge at the same period for even greater distances was twenty-five cents. Instead, therefore, of any surprise at the comparatively limited use of the telegraph by the Belgian people under the circumstances, it may well be regarded as extraordinary that it was used so much.

Had private companies in the United States attempted to impose such a tariff at the period named, public opinion would have compelled an immediate reduction. While there can be no doubt that, within certain limits, a diminished tariff will usually be followed by an increase in the number of messages, experience has demonstrated that this cannot be relied on as invariably true, except where the charge has been unreasonable or exorbitant. It must be remembered that, when a tariff has been reduced one half, there must be an increase of more than one hundred per cent in the number of despatches, to yield the same revenue, meet the cost of added labor, and provide the necessary additional means of transmission. So great an addition in the number of messages, unattended with a corresponding increase of wires and operators, would result in such delay and inaccuracy as to render the service of no value.

NATURAL INCREASE IN TELEGRAPHY.

It should be remembered, too, that an increase follows the supply of more ample facilities, when these have been inadequate to the wants of the communities for which they are provided.

There is also a large natural increase, altogether irrespective of the charges for transmission, which must be allowed for, before the legitimate effect of the inducements presented by cheapness, or the opportunities furnished by the multiplication of wires or increased capacity in the machinery, can be estimated. Thus, in December, 1848, which in the United States bears a fair comparison with Belgium in 1852 as to date of telegraphic introduction, at the office in Buffalo, N. Y., the receipts amounted to $330.54; while in the same month of 1867, with no decrease in the tariff, the receipts were $5,392.07,—an increase of over 1,600 per cent, and exceeding by 400 per cent that which in Belgium was caused, as claimed, by reducing the tariff from $1.02 to 17 cents, but which, in Buffalo, resulted from simple natural increase caused by the growth of the country and enlarged telegraphic facilities. The annual gross receipts of the Magnetic Telegraph Company, extending between New York and Washington, were as follows:—

1847, $32,810 1848, 52,252 1849, 63,367 1850, 61,383 1851, 67,737 1852, 103,232

Up to the close of 1848 the above company had a monopoly of the telegraph service between these two cities, but in March, 1849, the House Printing Line commenced operations between New York and Philadelphia, and, together with Bain’s Chemical Telegraph, was continued through to Washington in the autumn of that year, so that from 1848 to 1852 the above statement only shows the receipts of one of the three lines doing business between these places. If the receipts of the other two companies were as large, it exhibits the remarkable increase in the amount of business done, in five years, of more than 900 per cent, without any reduction in rates.

The number of messages transmitted by the Magnetic Company in 1852 was 253,857, at an average cost, according to the receipts, of forty cents each.

The average cost of the French telegrams for the same year, according to the official tables furnished by Mr. Washburne, was 11.28 francs, or $2.25 each.

For the year ending November 1, 1868, the Western Union Telegraph Company transmitted over the same territory embraced by the lines of the Magnetic Company in 1852, 1,556,004 messages, the gross receipts upon which were $546,262.05, being an average of thirty-five cents per message. There are two rival companies operating lines between New York and Washington at the present time, so that the comparison between the business for the past year and that of the previous year above given is quite complete.

The gross receipts of the New York and Boston Magnetic Telegraph Association for the year ending

July 31, 1848, were $34,835.14 „ 1853, „ 82,214.16 „ 1854, „ 79,683.73 „ 1855, „ 101,307.98 „ 1856, „ 102,151.78 „ 1857, „ 103,134.06 „ 1858, „ 98,097.73 „ 1859, „ 96,136.06

In 1848 the above company had a monopoly of the business between these places, but in 1849 two rival companies constructed lines over this route and divided the business with it.

In 1848 the tariff between New York and Boston was fifty cents for the first ten words, and three cents for each added word; and to intermediate points twenty-five cents for the first ten words, and two cents for each added word.

UNFORTUNATE EFFECTS OF LOW RATES AND COMPETITION.

In 1849 the rate was reduced between New York and Boston to thirty cents, in 1850 to twenty cents, and in 1852 to ten cents. None of the lines, however, paid their working expenses from the time of their construction up to 1853. Even in 1848, when there was no opposition, the expenses exceeded the receipts by $1,199.00. One of the three lines was sold at public auction twice within three years after its construction, to pay the debts incurred in operating it. In 1853 two of the lines were united under one control, and an amicable arrangement entered into between the two remaining companies, by which the rates were advanced approximately to those of 1848, and they remained unchanged for the next ten years.

AMERICAN AND EUROPEAN RATES COMPARED.

In 1851, when the tariff between New York and Boston was twenty cents, the average French rate was $1.56, and the Belgian, for less than one third the distance, $1.56.

In 1852, New York and Boston, tariff, 10 cents. „ French, average „ 2.25 „ „ Prussian, „ „ 2.35 „ „ Belgian, „ „ for less than one 1.21 „ third the distance, „ Austrian, „ „ 1.55 „ 1866, New York and Boston, „ .30 „ „ French, average, .83 „ „ Prussian, „ .65 „ „ Belgian, „ for less than one .25 „ third the distance, „ Austrian, „ .46 „