Part 5

“The ‘information’ furnished to the Postmaster-General is compiled with the evident intent to discourage the experiment then contemplated. It is incomplete, and is compiled with an intent to mislead. To any one who will take the trouble to examine it carefully, and to apply the proper tests to its assertions, it furnishes additional arguments in favor of a careful experiment by the government in the construction and maintenance of telegraph lines under control of the Post-Office Department.”

To impugn the motives of an opponent is the weakest of arguments. If his statements are wrong, it is easy to show wherein, but wholesale denunciation convinces no one of the strength of the cause or the culpability of the assailed. We do not question Mr. Washburne’s honesty of purpose in making his unjust and extremely erroneous statements regarding the property or executive ability of the Western Union Telegraph Company, but we do say that he is most egregiously deceived upon all points which he has discussed.

In reply to the charges which Mr. Washburne brings against the Western Union Telegraph Company, of compiling information for the Postmaster-General with an intent to mislead, of exaggerating the cost of construction of lines, and misrepresenting the value of its own, we respectfully present the following facts respecting the organization of the company, the amount of its capital, the number of miles of line and the number of miles of route, together with a statement of the number of skilled persons in its employ.

THE ORGANIZATION OF THE WESTERN UNION TELEGRAPH COMPANY.

In the spring of 1866 there were three telegraph companies, covering vast areas of territory in the United States. Two of these companies operated lines over separate divisions of the country, but worked in connection with each other, while the third, which covered some portions of the territory of the others, was a competitor for the business of all sections. These three companies were the Western Union, with lines extending from New York to California, and throughout the Western States; the American, with lines extending from the Gulf of the St. Lawrence to the Gulf of Mexico, and through the lower Mississippi and Ohio Valleys; and the United States, with lines extending from Portland, Me., to Richmond, Va., and from New York to Kansas.

The necessity for direct communication between the East and the West, and the economy of one set of officers and employees instead of two, demanded the consolidation of the American and the Western Union; and the still greater saving to all the companies by the uniting of the lines and offices of the United States with those of the other two equally necessitated its amalgamation with the others.

Par Value. Market Value. The capital of the Western Union Telegraph Company, which had sold at par and over in $22,000,000 $22,000,000 1865, was The capital stock of the American Telegraph Company, which sold at $180 per share in 4,000,000 7,200,000 1865, was The capital stock of the United States 11,000,000 11,000,000 Telegraph Company was ——————————— ——————————— $37,000,000 $40,200,000

The proportion of lines and wires to the capital varied with each company, the American company having the greater number; and in the terms of consolidation these differences were equitably arranged, and the capital stock of the consolidated company was established as follows:—

FINANCIAL STATISTICS OF THE WESTERN UNION TELEGRAPH COMPANY.

CAPITAL STOCK.

At the date of the Report of October, 1865, the capital stock of the company issued was $21,355,100 It has since been increased as follows:— October, 1865, by conversion of bonds 500 November, 1865, by exchange for stock of California State Telegraph Company 122,500 December, 1865, by exchange for Lodi Telegraph Stock 500 December, 1865, by exchange for Trumansburg and Seneca Falls Telegraph Stock, 3,500 December, 1865, by issue to Hicks & Wright for Repeater Patent, 1,500 December, 1865, by exchange for Missouri and Western Telegraph Stock, 400 December, 1865, by exchange for House Telegraph Stock, 1,400 April, 1866, by 2½ percent Stock Dividend, to equalize stock as per Consolidation Agreements, 472,300 April, 1866, by consolidation with United States Telegraph Company, 3,845,800 June, 1866, by issue for United States Pacific Lines, 3,333,300 July, 1866, by consolidation with American Telegraph Company, 11,818,800 July, 1866, by exchange for P. C. & L. Telegraph Stock, 4,100 December 1, 1867, by fractions converted, to date, 49,100 ——————————— Total present capital, $41,008,800 Of the stock issued for United States Pacific Lines there was returned to the company, as consideration for completing construction of Pacific Line, $883,300 The company owns also, 120,800 —————————— $1,004,100 Out of this we have issued for— Southern Express Co.’s Telegraph Lines, $150,000 California State Telegraph Co.’s Stock, 124,700 Other Telegraph Lines, 80,000 —————————— 354,700 —————————— Now owned by the company, 649,400 Balance, on which we are liable for dividends, $40,359,400

BONDED DEBT.

Bonds of the American Telegraph Company, due in 1873, $89,500 Bonds of the Western Union Telegraph Company, due in 1875, $4,857,300 ——————————— Total Bonded Debt, December 1, 1867, $4,946,800

The greater portion of the debt of the Western Union Telegraph Company was incurred in the grand attempt to construct a line on the Northwest Coast, and across Behrings Strait to connect with the Russian line at the mouth of the Amoor River, known as Collins’s Overland Line to Europe, which was abandoned on the successful submergence and operation of the Atlantic Cable.

The financial condition of the Western Union Telegraph Company May 1, 1868, was as follows:—

CAPITAL STOCK.

At the date of the Report of January 1, 1868, the Capital Stock of the Company, issued, was, $41,008,800.00 It has since been increased as follows:— By exchange for United States Telegraph Stock, $10,800.00 By exchange for American Telegraph Stock, 2,400.00 By exchange for House Telegraph Stock, 100.00 By fractions converted, 600.00 ———————————— 13,900.00 —————————————— Total Capital Stock issued May 1, 1868, 41,022,700.00 Of this there is owned by the Company, 675,000.00 —————————————— Balance on which dividends are payable, $40,347,700.00

BONDED DEBT.

Bonds outstanding December 1, 1867, $4,946,800.00 Bonds of 1875 since purchased and cancelled, 56,300.00 —————————————— Balance of Bonded Debt May 1, 1868, $4,890,500.00 Maturing as follows: In 1873, $89,500.00 Maturing as follows: In 1875, 4,801,000.00 ———————————— $4,890,500.00

PROPERTY ACCOUNT.

Telegraph Lines and Property, December 1, 1867, $47,733,640.68 Since added, By exchange of Stocks, as per Stock Account, $13,300.00 By Application of Profits:— Construction Account, $103,592.13 Purchase of Telegraph Stocks, 23,806.66 Purchase of Real Estate, 3,011.14 ———————————— $130,409.93 ———————————— $143,709.93 —————————————— Total Property Account, May 1, 1868, $47,877,350.61

STOCK, BOND, AND PROPERTY BALANCES, MAY 1, 1868.

Assets. Liabilities. Telegraph Lines, Equipment, Franchises, etc., $47,051,358.49 Western Union Telegraph Stock owned by Company, 667,342.50 Productive Stock in other Telegraph Companies, 52,471.81 Real Estate, 106,177.81 Capital Stock, $41,022,700.00 Fractional Shares, 15,110.00 Bonded Debt, 4,890,500.00 Bond and Mortgage, Buffalo Property, 15,000.00 Profits used for Purchase of Property, and Redemption of Bonds, 1,934,040.61 —————————————— —————————————— $47,877,350.61 $47,877,350.61

STATEMENT OF INCOME AND EXPENSES FROM JULY 1, 1866, TO NOVEMBER 1, 1868.

1866. Gross Receipts. Expenses. Net Profits. July, $562,292.97 $410,382.40 $151,910.57 August, 548,716.96 346,742.31 201,974.65 September, 556,955.95 298,931.99 258,023.96 October, 623,528.31 344,245.07 279,283.24 November, 571,036.02 322,508.66 248,527.36 December, 551,971.40 302,596.41 249,374.99 January, 580,560.53 341,104.71 239,455.82 February, 483,441.77 314,617.26 168,824.51 March, 530,642.66 297,076.59 233,566.07 April, 545,586.30 320,869.41 224,716.89 May, 525,437.94 326,829.83 198,608.11 June, 488,754.55 318,100.99 170,653.56 July, 536,156.89 360,917.53 175,239.36 August, 570,676.85 375,970.17 194,706.68 September, 601,548.79 375,641.50 225,907.29 October, 628,836.74 393,459.92 235,376.82 November, 583,723.66 370,429.57 213,294.09 December, 576,135.19 379,291.35 196,843.84 1868. January, 539,794.00 366,446.02 173,347.98 February, 600,183.32 345,855.52 254,327.80 March, 587,962.23 335,947.64 252,014.58 April, 602,257.05 356,349.18 245,907.87 May, 597,374.47 349,165.41 248,209.06 June, 579,911.00 353,375.50 226,535.50 July, 601,730.61 396,163.66 205,566.95 August, 602,304.73 376,452.03 225,852.70 September, 630,665.36 372,197.50 258,467.86 October, 680,311.81 410,604.17 269,707.64 —————————————— —————————————— —————————————— $16,088,498.86 $9,862,272.31 $6,226,225.75

STATIONS, LINES, AND EMPLOYEES OF THE WESTERN UNION TELEGRAPH COMPANY.

The Western Union Telegraph Company alone has

3,331 Telegraph Offices, 50,760 Miles of Line, 97,416 Miles of Telegraphic Wire, 265 Submarine Cables, 6,389 Skilled persons in its employ.

ENGLISH AND AMERICAN TELEGRAPHS COMPARED.

It has been shown that, several years before there is any record of regular public telegraph business in continental Europe, the system in the United States was in popular use. There can be no question that what restrained its use in Europe for so many years was governmental jealousy of its power, and not ignorance of its capacity. The subject was freely canvassed in the public prints, and was familiar to the learned men of all European nations. Even in England, whose government aided its introduction through private enterprise, the employment of the telegraph was hindered by a tariff so high as to shut it out from general use. Respecting this latter fact, so as to give in more marked contrast the early history of the telegraph on the two continents, a few details are given.

The Electric Telegraph Company of England was incorporated in 1846, and seems to have made its first work in the connection of the railway stations, post-office, police, admiralty, Houses of Parliament, Buckingham Palace, &c. As late as 1851 only eighty stations in the provinces, including the chief cities and outposts, had been opened. Priority of service was secured to the government, and the Secretary of State was empowered, on extraordinary occasions, to take possession of all telegraph stations and hold them for a week, with power to continue so to do.

The tariff of charges adopted was, for twenty words, including address and signature, one penny per mile for the first fifty miles; one half-penny for the second fifty; and one farthing for any distance beyond 100 miles. The lowest charge was 2_s._ 6_d._, sterling. This tariff existed as late as 1851. Compare these rates with those of the American lines at the same period.

From London to York, a distance of about 230 miles, the charge was 9_s._, equal to $2.25 gold.

From New York to Boston, a distance of 220 miles, the tariff for ten words, exclusive of address and signature, was twenty cents!

From London to Edinburgh, a distance of about 400 miles, the charge was 13_s._, or $3.25, while from New York to Buffalo, 500 miles, the charge was forty cents. On the English tariff of charges, a message from New York to New Orleans would have been $11.46; the actual tariff was $2.50.

ACKNOWLEDGED SUPERIORITY OF THE EARLY AMERICAN SERVICE.

On this subject we have the testimony of one of the best of British popular publications,—“Chambers’s Papers for the People,” published in 1851,—whose words we quote:—

“The scale of charges in the United States is much lower than in this country; the electric telegraph is consequently more available to the greater part of the population engaged in commercial affairs. Apart from business and politics, the Americans have made the telegraph subservient to other uses; medical practitioners in distant towns have been consulted, and their prescriptions transmitted along the wire; and a short time since a gallant gentleman in Boston married a lady in New York by telegraph,—a process which may supersede the necessity for elopement, provided the law hold the ceremony valid. A favorable idea of the immediate practical utility of the telegraph may be gathered from a communication to the present writer from New York. ‘The telegraph,’ he writes, ‘is used in this country by all classes except the very poorest, the same as the mail. The most ordinary messages are sent in this way,—a joke, an invitation to a party, an inquiry about health, &c. At the offices they are accommodating, and will inquire about messages that have miscarried or have not been answered, without extra charge.’ The lines in the United States are carried across the country regardless of travelled thoroughfares; over tracts of sand and swamp, through the wild primeval forest where man has not yet begun his contest with nature, where even the rudiments of civilization are yet to be learned. Away it stretches, the metallic indicator of intellectual supremacy, traversing regions haunted by the rattlesnake and the alligator, solitudes that re-echo with nocturnal howlings of the wolf and the bear. Communications are maintained from North to South, East and West, through all the length and breadth of the mighty Union, and with a frequency and social purpose exceeding that of any other nation. In one stretch, Maine and Vermont, where winter with deepest snows and arctic temperature usurps six months of the year, are united with the lands of the tropics, where the magnolia blooms and palm-trees grow in perpetual summer. Subordinate lines bring the great lakes—the inland seas—into direct communication with the ocean ports on the eastern shore. Nothing stops the restless, enterprising spirit of that people.”

REMARKABLY LOW TARIFFS OF THE EARLY AMERICAN TELEGRAPHS.

There is, indeed, nothing more remarkable respecting the presentation of any great invention to the public than the fact that the electric telegraph in America was thrown open to the public, in its very inception, at the lowest tariff which has yet, under all the excitement of opposition, been adopted.

What was true of Great Britain with respect to tariffs during the early years of the introduction of the telegraph applies, as has been seen, equally to France and the other European states. Every tariff adopted was, to a large extent, prohibitory, and the facts connected with these years utterly falsify the statement that Europe has shown (until within a very few years) anything like the spirit of liberality which private companies in the United States have manifested in this matter.

Since these early years no advance was made in our tariffs until the third year of the rebellion, when the depreciation of the currency necessitated the increasing of the salaries of employees from fifty to one hundred per cent, and enhanced the price of material in a corresponding ratio, compelling a considerable increase of the tariff on despatches. Since the war closed, most of the important tariffs have been reduced to their original standard, without any corresponding reduction of the price of material or labor.

In contrast with this, we need only to point to the large advance in railway fares and transportation, in the cost of entertainment at hotels, in the prices of daily newspapers, and in that of almost every commodity or service which the people enjoy; and yet the telegraph, like all other enterprises, has been burdened with the same increase in the cost of labor and materials.

NO SIMILARITY BETWEEN THE TELEGRAPH AND POSTAL SYSTEMS.

The idea which has been repeatedly broached, that the telegraph and postal communication are in the same category, is entirely fallacious. The telegraph does that which the post cannot do, and which, before the telegraph was invented, remained undone. If the public use the telegraph at a cost of 25 cents when they might use the mail at a cost of three cents, it is obvious that the use of the telegraph implies something essentially different from the use of the post. If they use the post, with its tardy departure and delivery, instead of the telegraph with its instant and continuous departure and delivery, it is equally obvious that there is something implied in the use of the post that is not to be obtained by the use of the telegraph.

Postal correspondence and telegraph communication are two very distinct things.

A telegram announces sudden illness; death; an accident; prices of gold every five minutes; prices of stocks every hour; sudden fluctuations in the values of commodities; orders rooms at a hotel, while the sender is _en route_ and flying to the distant city as rapidly as steam can carry him; countermands orders and instructions contained in letters sent by post; orders letters to be returned unopened; orders the arrest of fugitives from justice after they have taken their departure on the railway; orders the search for a package left in the cars, and its return by a succeeding train; announces that the Merrimac has destroyed several ships of war, and may get to sea in spite of the Monitor and ravage the coast; announces that the flag has been fired upon at Charleston, and in twenty minutes arouses the entire nation. None of these things are possible for the post. Before a letter could convey the intelligence of the sudden illness, the patient is dead, or convalescent; the dead is buried; gold has changed in price a hundred times; stocks have gone up and down; the man arrives at his hotel twenty-four hours in advance of his letter; the instructions in the letters have been acted upon, and no subsequent ones can repair the damage; the fugitive from justice escapes out of the country; the package left in the cars is irretrievably lost; the Merrimac has been sent to the bottom, and the alarm caused by the tidings through the post, which must continue until another arrival, is groundless; and the flag has been insulted a month, before all the patriots of the country have heard the tidings by the slow, plodding mail.

The telegram is often the index to the more full and copious information conveyed by the post, but it does not supersede it. There is no similarity in the conveyance of matter by post or telegraph.

A letter deposited in a post-office is placed in a bag, and carried to its destination with no less labor and expense than if _ten_ letters were so deposited. The time taken in transport is the same. A leather bag covers a thousand letters as easily as a solitary note. It was this fact which led to the reduction of postage. But it was accomplished without the loss of an hour to government, without the enlargement of a coach, or any considerable increase in the compensation paid for the service. It involved no new brain-labor, no new responsibilities, no new expense. Under such circumstances high postage was a folly, and to return to it would be almost a crime.

A communication by telegraph, on the contrary, demands a calm, unoccupied brain, and a steady hand to manipulate its contents, letter by letter. A slip of the finger from the manipulating key changes its meaning; a truant thought alters the manuscript; a shadow of forgetfulness mars its whole design. It demands a whole wire for its use, and a given time for its solitary passage. Hence the necessity for multiplying the wires and enlarging the operating staff.

Added to all this is the necessity for repeating this process when destined to any point not directly reached by the originating office.

Over and over again have many of the messages left in the hands of telegraph companies to be translated or re-written before they reach their destination; very different from the sealed letter, which needs but the toss of a practised hand to change its route and put it under the cover of a new bag.