Part 7

As an illustration of the manner in which this service is performed, we will take the State press of New York for an example. The report is compiled by the agent of the Association for the various editions of the newspapers requiring it, and it is then handed to the telegrapher, who with the manipulation of his magic key transmits it simultaneously to Poughkeepsie, Hudson, Albany, Troy, Utica, Syracuse, Auburn, Elmira, Binghamton, Owego, Rome, Oswego, Rochester, and Buffalo, New York, to Rutland and Burlington, Vermont, and to Scranton, Pennsylvania. These stations are not all on a single wire, nor on the same route, and the question may be asked, How can they all receive the same information from a single impulse? This is accomplished by a combination of circuits through an instrument called a repeater, by which the intelligence can be transmitted to a thousand offices as easily as to one.

The news is sent to the Eastern press in a similar manner. The manipulation of the key at New York transmits the report simultaneously to Bridgeport, New Haven, Hartford, Waterbury, and Norwich, Conn., Providence, R. I., and to Springfield, Worcester, Boston, Fall River and New Bedford, Mass.

The operator at each of these places receives the reports by the click of the instruments,—reading by the sound of the armature,—and with an agate pen copies them upon manifold paper, making as many impressions as are necessary to furnish each paper with a duplicate copy.

Direct wires carry and bring news from and to Chicago, Cincinnati, St. Louis, Washington, New Orleans, Plaister Cove, and other important points. Sixteen wires work out of New York every night to transmit or receive news reports, and all over the United States the ubiquitous iron threads are permeated by the subtile and invisible fluid during all the silent hours of the night, conveying intelligence of passing events in all sections of the civilized world for publication in the morning journals throughout the country.

It is a singular and suggestive fact, that the amount of news which we furnish to the press of the United States, for an aggregate sum of $521,509, is considerably greater than the entire telegraphic correspondence of Continental Europe, for which the paternal governments of those enlightened and enterprising peoples receive $11,597,632.71.

The following table will serve to show the remarkable contrast, in this respect, between the systems under government and private control. The number of messages delivered to the press are obtained for this comparison by dividing the total number of words furnished to the press by 20, the European standard:—

_Statement showing the Average Cost of Telegrams in Continental Europe and the Average Cost of Press Telegrams in the United States, with Total Amount of each per annum._

┌─────────────────────┬──────────────┬─────────────────────┬──────────┐ │Total number of │ │Total number of │ │ │ messages │ │ messages furnished │ │ │ transmitted in │ │ to the newspapers │ │ │ Continental Europe │ │ of the United │ │ │ for the year 1866, │ 12,902,538│ States for 1866, │14,725,181│ │Gross receipts for │ │Gross receipts for │ │ │ the above, │$11,597,632.71│ the above, │ $521,509│ ├─────────────────────┼──────────────┼─────────────────────┼──────────┤ │Average cost of │ │Average cost of press│ │ │ telegrams in │ │ telegrams in the │ │ │ Continental Europe,│ 81 cts.│ United States, │ 3½ cts.│ └─────────────────────┴──────────────┴─────────────────────┴──────────┘

The above exhibit illustrates the difference between what can be accomplished under a popular government which leaves the press and telegraph free and untrammelled, and the results of the paternal system which the governments of Continental Europe impose upon their subjects. For these great benefits the people of this country are indebted to the government for the one negative quality of letting the press and telegraph alone. For the positive quality which actually provides them they are solely indebted to the enterprise and public spirit of the press, and the Western Union Telegraph Company, the latter furnishing the reports at a price which barely covers the cost of service employed in transmitting them, and leaving nothing to defray the expense of the wear of the lines, or interest on the investments for their construction.

In no other country in the world is there such a system, and in none can there ever be, until the policy of our government is imitated, and the people left to manage their own private affairs, leaving the press and the telegraph free and untrammelled by governmental control or repression. What our government, with such an example already set, might be able or disposed to do, in the event of its monopolizing the telegraphs, it is impossible to say; but it is unquestionably true, that no other government has ever made such a use of them to promote the education and general well-being of its people.

We believe it would prove a serious misfortune to the press and the people, if the government were to destroy, by its interference, this admirable co-operative system of obtaining telegraphic news at such low rates.

The tariff for special press reports is as follows: For the first one hundred words, full rates; for the next four hundred words, a discount of thirty-three and one third per cent; for the next five hundred words, one half the ordinary tariff; and all over one thousand words, a discount is made of sixty-six and two thirds per cent.

Mr. Washburne’s bill provides for a general tariff of one cent per word for telegrams, with an additional charge of three cents for postage, and two cents for delivery, and stipulates that a reduction of not more than fifty per cent shall be made for press reports. _This rate would increase the average cost of news for the press of the United States more than three hundred per cent, and thus the newspapers would be compelled to pay an extra tax of a million dollars per annum for the privileges they now enjoy._

If these facts show any results to warrant governmental assumption or interference in the business of telegraphing, we fail to perceive them.

REVIEW OF MR. GARDINER G. HUBBARD’S LETTER TO THE POSTMASTER-GENERAL ON THE EUROPEAN AND AMERICAN SYSTEMS OF TELEGRAPH.

We have recently received a pamphlet from Gardiner G. Hubbard, Esq., of Boston, entitled a “Letter to the Postmaster-General on the European and American Systems of Telegraph, with Remedy for the present High Rates,” which we will briefly review.

Mr. Hubbard commences by saying:—

“The reasons that have induced the public to commit to the government the transmission of the mails by rail have induced most civilized nations to intrust it with the duty of transmitting correspondence by telegraph. England and America are the only important exceptions.”

As England and America are the only “civilized nations” where the public have any control of such matters, there need be no further discussion of this proposition.

ERRONEOUS STATEMENTS RELATIVE TO BELGIAN TELEGRAPHS.

Alluding to the Belgian telegraph, Mr. Hubbard says:—

“In 1850 the private lines then in operation were purchased by the government, and have since been under its management. The rates were originally one franc and a half for a message of twenty words. At these rates, the telegraph was little used for inland messages, and its development was very slow. In January, 1863, they were reduced to one franc, and December, 1865, to half a franc.”

By referring to the official tables published by the Belgian government, on page 94, it will be seen that the average cost per message on the Belgian lines in 1851 and 1852 was over 6 francs; in 1853, 5.10 francs; 1854 and 1855, over 4 francs; in 1856 and 1857, 3.62 and 3.42 francs; from 1858 to 1862, over 2 francs; and even in 1867 they averaged 0.85 francs.

We quote from Mr. Hubbard again:—

In 1862, the inland messages, at 1½ francs, numbered 105,274 In 1865, the inland messages, at 1 franc, numbered 332,718 In 1867, the inland messages, at ½ franc, numbered 819,668

Total receipts in 1866, 961,112 francs. Total expenses in 1866, 839,000 „

Estimated profits for 1866 on the entire business, if no reduction had been made, 198,499 „ Actual profits for 1866, under the reduced rates, 122,112 „ ——————— Actual loss by reducing the rates on inland messages one half, 76,387 „

By an examination of Table H, page 96, it will be seen that the total receipts of the Belgian telegraphs for 1866 were 962,213 francs; expenditures, 1,217,496 francs; loss, 255,283 francs. Of the receipts only 407,532 francs were for inland messages, of which there were transmitted 692,536, while 553,580 francs were received for 435,469 international and transit messages. As before stated, the expense of service upon transit messages is merely nominal. They simply pass through the kingdom, and require no labor in receiving, transmitting, or delivery. The greater part of the expense, therefore, was incurred upon the inland messages; and, had not the Belgian administration imposed a tax upon neighboring nations of 553,580 francs for messages coming from or going to other countries, there would have been a deficit of 809,964 francs on the year’s business instead of 255,283 francs.

We quote from Mr. Hubbard:—

“A system of railroads is also owned and operated by the government, and the telegraph is connected with both the railroad and the post. A large proportion of the offices are at the railway stations, but every post-office is an office of deposit, from which messages are despatched at once, free of charge, to the nearest telegraph office, when in the same district; otherwise, by the first messenger or by special carrier, on payment of an extra rate for porterage. This union of the telegraph with the post and railroad reduces the expenses for operators, clerks, general management, rent and office expenses, and brings the system into close connection with every citizen.

“The rates are prepaid by stamps, and are uniform and low. The rate for all inland messages by telegraph, or by telegraph and post where the place of deposit or delivery is not on the line of the telegraph, is one half-franc [or thirteen and a half cents currency].”

BELGIAN TELEGRAMS DELIVERED BY POST.

In reply to this flattering picture of the Belgian system of telegraphy we quote the following from a recent English publication:[15]—

Footnote 15:

Government and the Telegraphs. London, 1868.

“The government of Belgium not only have a monopoly of the telegraphs and post-office, but also of most of the railways of the country. They work the system as a whole. In the case of ordinary half-franc telegrams, the messages are not uniformly despatched by messenger from the office at which they arrive, _but are sent to the residence of the receiver by post_!

“The administration of the Belgian telegraph in no respect holds itself responsible for the delivery of a message, unless it is specially insured and additionally paid for. They decline all responsibility on account of delay in the transmission or non-arrival of a half-franc telegram. _They will not even inquire into the cause of delay of a half-franc telegram!_ No matter how long a message has taken in delivery, or whatever may be the errors in it, the government will make no compensation to the sender or receiver, except under very exceptional circumstances. Moreover, the twenty words forwarded for half a franc includes addresses both of sender and receiver, ‘all of which is free in this country.’”

For further particulars relative to the Belgian telegraph service reference is made to pages 5, 7, 8, 13, 16–24.

WANT OF UNIFORMITY IN RATES.

We quote from Mr. Hubbard:—

“There is no uniformity in the rates. They are often less to a distant station than to an intermediate one on the same line. An estimate of the average rates, and of the annual number of messages transmitted has been made by ascertaining the rates to seventy-one stations at different distances from Boston, and arranging them in four different classes.”

Mr. Hubbard groups his American distances into classes of 500, 1,000, 1,500, and 2,000 miles; while his English classes embrace those of 100 and under, 200 and under; over 200, and to Ireland.

The average rates he gives for America for

Class A, 500 miles and under, $0.41 Class B, over 500, and under 1,000, 1.43 Class C, over 1,000, and under 1,500, 2.46 Class D, over 1,500, and under 2,000, 3.36

The English rate for

Class A, less than 100 miles, one shilling, equal to $0.33 U. S. currency. Class B, between 100 and 200 miles, one shilling and sixpence, equal to 0.50 U. S. currency. Class C, over 200 miles, two shillings, equal to 0.66 U. S. currency. Class D, to Ireland, three to four shillings, equal to 1.00 to 1.33 U. S. currency.

Mr. Hubbard says:—

“As rates are higher in America, a greater proportion of messages are sent to stations in class A than in England, and a smaller proportion to class D. The average receipt per message, at these rates, is $1.00. The gross receipts of the Western Union Company, for the year ending the 30th of June, 1868, were $6,952,273.[16] This sum, divided by the average receipts, gives the whole number of messages transmitted, viz. 6,952,000.

Footnote 16:

This amount embraces the total revenue of the Western Union Telegraph Company for that year, and includes the receipts for telegrams, press reports, and from all other sources.

“It may be objected that those estimates are incorrect, and therefore the deductions are unreliable. If the Western Union Telegraph Company furnish a statement of messages annually transmitted, the required corrections will be made. If it is not given, it will be because the estimates of the average rates are too low, and the deductions too favorable to that company.”[17]

Footnote 17:

The statement on page 7, of the number of messages annually transmitted by this company, shows that Mr. Hubbard’s estimate gives less than 70 per cent of the number actually sent over the wires. The average rate per message in the United States is fifty-seven cents.

As the average of these English rates is a little over 75 cents, while the greatest distance for the highest English class is less than for the shortest American class, which he averages at 41 cents, we do not see how he can assert that the American rates are higher than the English!

In answer to the charge of want of uniformity in the tariffs, we would call attention to the fact, that the lines under our control were constructed by a great number of separate organizations, having tariffs upon all bases, which had to be added together at all the termini of two or more lines, so that a message going a few hundred miles would require the payment sometimes of two or three rates. For instance, a few years since there were five telegraph companies owning the lines connecting Portland, Maine, with Cleveland, Ohio, and the tariff between these two places was ascertained by the addition of the local rates from Portland to Boston, Boston to Springfield, Springfield to Albany, Albany to Buffalo, and from Buffalo to Cleveland. The same system prevailed throughout the United States, until after the consolidation of the lines made it possible to transmit messages between places thousands of miles apart without the necessity of booking or rechecking at intermediate points. This result necessitated a remodelling of the tariffs, and the work has been going on uninterruptedly ever since; but when it is considered that a complete revision of the system required a separate tariff-sheet to be made out for over three thousand offices, changing and equalizing the rates to more than three thousand other offices, the immense labor and responsibility incurred in the undertaking may be imagined. It was impossible to effect this revision at once with any number of clerks, and for obvious reasons only a limited number could be employed upon it, as they can only act under the instruction of the executive officers, who are charged with all the other duties of an extensive organization.

Various plans have been suggested for simplifying and equalizing the tariffs, but difficulties of a practical nature present themselves in all of them. The existence of rival lines, built by speculators whose profit is in the construction of them, and which essay to do business at rates less than the cost of the service, necessitates the reduction of our rates along certain routes disproportionately, and prevents the adoption of a general rate strictly proportioned to distance. In the course of the coming year, however, it is expected that the work of revising our whole tariff system will be accomplished, to the satisfaction of all.

ASSERTION THAT COMMERCIAL MESSAGES ARE TRANSMITTED AT A LOSS.

Mr. Hubbard’s assertion that the lowest rate between any large cities in America is 25 cents is incorrect. The tariff between Washington and Baltimore is 10 cents; between New York and Providence, New Haven, Hartford, &c., 20 cents.

If it is true, as he states, that “at these rates, under the present system, commercial messages are probably transmitted at a loss,” it may be a matter of regret to the stockholders of the telegraph companies, but affords no just ground for governmental interference. Besides, how will his proposed corporation be able to make money by doing the business at a still lower rate?

Mr. Hubbard says:—

“The history of the telegraph will explain the causes of these different rates. Great competition, in 1852, caused a large reduction in the rates. Soon after the validity of Mr. Morse’s patent was confirmed by the courts many of the competing companies were enjoined and compelled to wind up or sell out, and some failed. In the Eastern and Southern States the American Telegraph Company, in which Mr. Morse and his friends were largely interested, bought out most of the old companies, and continued to occupy their territory for many years without serious opposition.

“The various companies in the West, South, and Northwest (forming groups of feeble organization) were gradually merged into one corporation, under the name of the Western Union Telegraph Company. In 1864, the United States Telegraph Company was organized to oppose this monopoly, and entered into a vigorous competition with the Western Union; prices were reduced in consequence, and the business increased with great rapidity. In 1866 the American Telegraph Company, the United States Telegraph Company, and the Western Union were united under the corporate name of the last corporation; the prices were again raised, and this first caused a less ratio of increase, and finally an actual decrease in the telegraphic business of the country.”

Mr. Hubbard’s pamphlet contains a statement of the rates between New York and Boston in former years which is inaccurate. The following is a correct table of the rates between those cities for the years 1849–52.

In 1849 the rate was 30 cents. In 1850 the rate was 20 cents. In 1851 the rate was 20 cents. In 1852 the rate was 10 cents.

CORRECTION OF ERRONEOUS STATEMENTS.

The statement that “soon after the validity of the Morse patent was confirmed by the courts in 1852 many of the competing companies were enjoined and compelled to wind up or sell out” is incorrect, as is also the assertion that “the American Telegraph Company bought out most of the old companies, and continued to occupy their territory for many years without serious opposition.”

The validity of the Morse patent was never disputed. In 1849 the Morse patentees commenced suits against the New York and New England [Bain] Telegraph Company, and the New York and Boston [House printing] Telegraph Company, for an infringement of the Morse patent. The case against the company using the Bain patent never came to trial, while the other was decided in favor of the defendant, by Judge Woodbury of the United States Supreme Court, 1850.[18]

Footnote 18:

For an abstract of this decision see “Prescott’s History, Theory, and Practice of the Electric Telegraph.” Boston: Fields, Osgood, & Co.

The consolidations between competing lines, in 1852 and 1853, was caused by the inability of the companies under separate organizations to meet their working expenses. They were generally confined, however, to the union of the Morse and Bain lines, and there still remained two competing lines upon all the principal routes. There has never been but a single year, since 1849, when there have not been at least two competing lines between Boston and Washington.

The American Telegraph Company was not organized until 1855, and it was not consolidated with any opposition line until 1860. The next year after the consolidation the Independent Company built a competing line between New York and Portland, Maine.

The assertion that “the United States Telegraph Company was organized to oppose this monopoly, and entered into a vigorous competition with the Western Union, and that prices were reduced in consequence,” is also incorrect. The United States Telegraph Company never reduced the rates at any point. On the contrary, it was not until after the United States’ lines were put in operation that the rates were advanced. This was rendered necessary by the great depreciation of our currency, and consequent advance in the cost of labor and materials for working the lines, and was done by agreement of all the companies.

TARIFFS NOT INCREASED BY CONSOLIDATION OF THE LINES.

The statement that, after the consolidation of the American, United States, and Western Union Telegraph Companies, in 1866, “the prices were again raised, and this first caused a less ratio of increase, and finally an actual decrease in the telegraphic business of the country,” is without the least foundation in fact. In no instance has the tariff been increased since the consolidation. On the contrary, there has been a steady decrease, the rates to more than one thousand stations having been lowered since the consolidation; and this course is still being pursued as rapidly as a just regard to the rights of the stockholders and the extremely complicated nature of adjustment to be made will allow.

The impression which Mr. Hubbard attempts to give, that the consolidation of the companies forming the Western Union Telegraph Company, included all the lines, and gave this company a monopoly of the business, is also incorrect. The Franklin Company, between Boston and New York, the Insulated Company, between Boston and Washington, the Bankers and Brokers’, between New York and Washington, and others, were then in active operation, and are still.

Mr. Hubbard says:—

“In other countries, the rates are reduced with the growth of business, and are never raised. In this country, they are reduced by competition, followed by consolidation of the competing companies, and subsequent increase of rates, without regard to the growth of the business.”