GOVERN MENT TELEGRAPHS. ARGUMENT OF WVILLIAM ORTON, PRESIDENT OF THE WESTERN UNION TELEGRAPH COMPANY, ON THE BILL TO ESTABLISH POSTAL TELEGRAPH LINES, DELIVERED BEFORE THE SELECT COMMITTEE OF THE UNITED STATES HOUSE OF REPRESENTATIVES. NEW YOIK: RUSSELLS' AMERICAN STEAM PRINTING HOUSE, 28, 30, 32 Centre Street. 1870. GOVERN MENT TELEGRAPHS. ARGUMENT OF WILLIAM ORTON, PRESIDENT OF THE WESTERN UNION TELEGRAPH COMPANY, ON THE BILL TO ESTABLISH POSTAL TELEGRAPH LINES, DELIVERED BEFORE THE SELECT COMMITTEE OF TIE UNITED STATES HOUSE OF REPRESENTATIVES. NEW YORK: RUSSELLS' AMERICAN STEAM PRINTING HOUSE, 28, 30, 32 Centre Street. 1870. EXECUTIVE OFFICE, triternI Iri-ol dlegrlaph aonrIpaq. NEW YORIi,,June 8th, 1870. HON. C. C. WASHBURN, h airman Speceial Cogmmi ttee on th7e Posfta Telegr'apJh. DEAR SIR: During the session of yonr Committee, on the 11th of May, you remarked that yon "had a letter from our Minister to Switzerland, Horace Rublee, in which he says, under date of March 21st, 1870, that the total receipts from the telegraph service for 1869 reached 1,043,350 francs; the cost to the Administration for the same period, 913,104 fiancs; leaving 130,246 francs as net receipts." To which I replied as follows:' I will venture the assertion, and will prove it from the official record, that, so far from that statement being true, the telegraph in Switzerland, during that year, did not pay its own expenses. There is this fact to be taken into consideration: In Switzerland, instead of the expense of construction and extension being charged to profit and loss, they are covered by a special credit of $100,0(00-an appropriation made by the Government for that special purpose, and only the interest on the suml annually expended is charged to the expense account." I have just received a copy of the Official Report of the Administration of Telegraphs in Switzerland for 1869, which states that the expenditures for the year above mentioned were.............................$214,240.83 And the receipts for telegraphing........................... 197,132.32 Leaving a deficit of........................................ $17,108.51 The process by which an apparent profit of 130,246.52 francs, or $26,049.30, was shown, was by adding to the telegraph receipts 65,689.09 francs, which were mnainly derived from forced contributions friom communities for the establishment of offices, and by deducting from the expenditures 148,100 fiancs, which were disbursed for new constructions. [OVER.] On page 2 of the Official Report it is stated that only $11,144 of the sum placed to the credit of the Administration of Telegraphs by the decree of the 17th July, 1867, remains unexpended. The disbursements upon account of this credit were as follows: In 1867.........$4,............... 142,277.00 " 1868.................................... 16959.00 1869.... 29,620.00 Total.......................... 88,856.00 The receipts other than for the transmission of messages, and mainly composed of forced contributions from the communes, were as follows: In 1867....................................$9,702.82 " 1868................................... 13,388.03 1869..................................... 1313 7.82 Total.......................... 36,228.67 Thus it will be seen that during the past three years $125,084.67 have been received by the Telegraph Administration in Switzerland, and expended by it in the prosecution of the telegraph business, which was exclusively derived fiom other sources than fiom the transmission of messages. I take this opportunity to inquire whether these facts, derived fiom the Official Reports, do not show the necessity of exercising great caution in accepting as authentic such statements as those made by Mr. Rublee and Mr. Harrin gton. I am, very respectfully, Your obedient servant, WILLIAM ORTON. INTRODUCTION. There are two schemes now before Congress which contemplate the connectionmore or less intimate-of the Telegraph with the Postal Service. The one known as the Hubbard scheme asks for the incorporation of a company by an act of Congress, which shall also confer the right to build and operate Telegraph lines in all the States and Territories. This scheme also contemplates a partnership arrangement by contract with the Post-office Department, under which the company is to be provided with office room, stationery, lights and fuel, and to some extent with clerks, operators and superintendents, at the cost of that department. As a partial return for these advantages, the company stipulates to send messages at the rate of 25 cents for distances of 500 miles, and 50 cents for distances of 1,000 miles-reserving, however, the right to charge extra rates for messages the senders of which are willing to pay for "priority of transmission;" and the right thus to put one message ahead of another, for a consideration, is especially conferred by the bill. This scheme was reported upon adversely by unanimous vote of the House Committee on Post-offices at the last session of Congress. Mr. Hubbard then transferred his application to the Senate, and the bill is now in the Post-office Committee of that body. The other scheme is that of which Hon. C. C. Washburn, of Wisconsin, is the author. More than two years ago Hon. E. B. Washburne, of Illinois, introduced a bill into the House which provided for the construction of a line of Telegraph between the cities of Washington and New York by the Post-office Department, and to be operated by it in competition with the lines owned by private parties. This scheme was not only reported upon adversely by the House Committee on Post-offices, but was received with special disfavor by the public, on account of the dangerous precedent which it proposed to inagurate, of employing the public funds-drawn from the people by taxation-for the purpose of establishing the Government in business as the competitor of its own citizens. The scheme now pending is so far an improvement as that it proposes to purchase all existing lines at a price to be fixed by appraisement and arbitration. When so acquired by the Government, it is proposed that they shall be operated by the Post-office Department at the rate of 20 cents per message between all points in the United States, and that the business of telegraphing shall be thereafter prohibited to all persons or corporations under stringent penalties. The adoption of either of these schemes would be the inauguration of a new policy by our Government. The interests involved reach far beyond the value of all the Telegraph property in the country, on whatever basis that value may be determined; and it is in the belief that the public at large, as well as the owners of Telegraph stock, will be interested in this discussion, that it is respectfully submitted for their consideration. NEW YORK, lay, 18m0. WILLIAM ORTON. BEFORE THE SELECT COMMITTEE ON THE POSTAL TELEGRAPH, Ui. S. IIHOUSE OF REPRESENTATIVES. WASHINGTON, D. C., April 30, 180. s "I shall be at the Fifth Avenue Hotel to-day, Mr. GARDINER G. HUBBARD appeared before the and possibly to-morrow, and will call and explain my views more fully, if desired. Requesting the Committee and resumed his statement, as follows: o, n favor of an early reply, directed to me at Boston, The Chairman asked me yesterday why it was "I am, resp'y yours, necessary to incorporate a new Company-why the " GARDINER G. HUBBARD." Western Union Company should not come in and act In reply to which I received the following letter: themselves under the bill? I will say, in regard to " Executive Office Western Union Telegraph Co., that, that I made a similar proposition myself to the "145 BROADWAY, N. Y., Aug. 20, 1869. Western Union Telegraph Company and they de- " GARDINER G. IHUBBARTD, Esq., dined it. I will read a part of my letter to them, "Boston, Mass., "Dear Sir-Your note of 18th instant has been and a portion or the whole of their answer, as they received. I should have been pleased, had it been may desire. convenient for you to keep the appointment, to have MAr. ORTON —Read it all, please. discussed further the subject of your previous comBMr. HIUBBARD read as follows: munication, under date 16th instant, but I am not NW O, A t 16, 19. prepared to make any stipulations concerning GovNE YOR st 16 1869. ernmental interference with the telegraph business. " WILLIAM ORTON, Esq., I not only believe that the scheme which you have " Pres't Western Union Tel. Co. advocated before Congress will not succeed, but "~Dear Sir-I have been requested, by gentlemen that it ought not to succeed, and that the business interested in the postal telegraph, to submit a propo- cannot be made self-sustaining at the rates named in sition to Congress, for the performance of the entire your bill. Whether the benefits which the Comtelegraph service of the country, substantially on pany could secure from the Government, under its the terms set forth in a' Bill to establish a postal provisions, would compensate for the loss of revenue telegraph system, and to incorporate the United is a question concerning which wide differences of States Postal Telegraph Company." This bill was opinion may properly arise. If the bill should be introduced into the Senate, March 15, 1869, and re- construed strictly, and the benefit of all doubts ferred to the Committee on Post-offices and Post- given to the Government, the pecuniary advantages roads. During the last session of the 40th Con- to the Company would be very much less than if gress I was informed, by a member of the Senate the latter were treated with liberality. I can conCommittee on Post-offices and Post-roads, that you ceive of circumstances under which a Company suswere willing to perform the service on these terms. taining to the Government the relations provided by I wish to know if this information was correct, and this bill could escape much of the expense which if you desire to make such a proposition. If you we are obliged to defray. In that case a majority will, I will use my influence to secure its accept- of the receipts, even at the low rates you propose, ance. I desire to secure a cheap telegraph for the might become profits, and thus an impracticable enpeople, controlled and regulated by the laws of the terprise be made a financial success. I do not beUnited States. This end can be more quickly ac- lieve, however, that that portion of the public intercomplished through your Company than in any other ested in cheap telegraphy desire that it shall be way. I am, therefore, ready to sacrifice any private accomplished at the expense of the Treasury, and interests to secure so great a public benefit. that the burdens of taxation (already onerous) shall 6 GOVERNMIENT TELEGRAPHS. be increased to the many, in order that a new cor- Mr. WASHBURN-Why cannot the Western poration may make apparent profits, by sending Union Telegraph Company adopt the system of messages at rates below the actual cost of the ser- vice. If there is any practical plan whereby further contests on this subject before Congress can be Mr. HUBBARD-Mr. Orton, I presume, can answer avoided, I shall be pleased to consider it, and would that question better than I can. prefer to receive suggestions rather than to offer Mr. ORTO —I do not think any system of paythem. "If y have leisure wn ys ment by stamps is possible in this country; it is' If you have leisure, when you pass through this city for SanFrancisco, I will be glad to see you. I very well in countries of small territorial extent, contemplate a trip to the Pacific some time next where it is not necessary to have more than one or month, and regret that I shall not be able to discuss two rates. In France, for instance, the fanc Postal Telegraphy in the presence of its exponent.e of twenty words, icludi stamp carries a message of twenty words, including "I am, very respectfuly, &c., "WLILLIAMI ORTON, Pres't." the address and signature, from one part of France to another, while the half franc stamp carries it anywhere within the department. There is, howMr. HUBBAR — Another suggestion in regard to ever, a little trouble in respect to the excess over that is this. There are various opposition compa- twenty words, but they accommodate that by nies at present in existence in the country, which charging for groups of words. But these excesses have rights as well as the Western Union Telegraph are rare as compared with the great mass of mesCompany, and which must be considered. These sages, which are ordinarily confined to twenty leading opposition companies are represented among words. the corporators of this bill. Mr. Woodbury Davis, Coming to the United States, however, at the of Maine, represents the International Telegraph rates proposed by Mr. Hubbard —which a year's exCompany of Maine, in which the brother of the perience, I apprehend, would satisfy him, would ruin General (Washburn) is one of the Directors. Mr. anybody, even if the Government was at his backSweet and Mr. Hammond represent the Atlantic a variety of stamps would be required; how many I and Pacific Telegraph Company, which is also one will not say. But when you add the number of of the large opposition companies. Mr. Mason, of rates for the various distances over which mesNew York, whose name is to be inserted in the bill sages are sent to those for the excess above is a representative of the Franklin Telegraph Com- the minimum, whether of ten or twenty words, pany. The other principal telegraph company, the Pa- you are involved in quite serious complications. cific and Atlantic, are not represented, although they It may be remedied by having stamps of small have at different times asserted to me and approved denominations, and using a sufficient number of of the provisions of the bill. It was thought by them for the larger rates; but these stamps cost a these opposition companies that it was better, and good deal of money, and they are liable to be counthat they would prefer to unite under a new and terfeited. I have given the subject very serious independent corporation than under the wing of the consideration, in view of the saving which would Western Union Telegraph Company. ensue in simplifying and cheapening our system of Another question was asked in regard to stamps- checking, but I have not yet been able to see my I would say that, under the bill which I have had way clearly for the adoption in this country of any the honor to present before the committee, there stamp system. will be but veryfew different kinds of stamps re- Mr. HUBBARD-I have drawn up nine or ten reaquired. I suppose that three quarters of all the sons here why I think this system is to be preferred telegrams that are sent to-day, are sent within 500 to the present system. miles. There would, therefore, be but one stamp The first is: because it will reduce the cost of required-the 25 cent stamp. The bill also provides telegraphing by utilizing the post-offices and postthat for every additional five words or figures one- masters, and adopting stamps. fifth of the above rates are to be added, which will Second-Because it will greatly reduce the cost give a five or a ten cent stamp in addition. Night of telegraphing, by consolidating the existing rival rates, also, are 25 cents for a thousand miles. You interests. I believe my fiiend (Mr, Orton) will say do not therefore, under this bill, use near as many to the committee that he has no doubt in his own stamps as are required by the Post-office Depart- mind that if all the existing telegraph companies ment to-day, or anything like the number of stamps were incorporated together as one, the entire cost that are required to carry on the financial business of all the opposition companies could be saved to of the country, so far as promissory notes and bills the community. That is, about seven or eight of exchange are concerned. Under the present hundred thousand dollars a year could be saved by system, where they have a variety of rates, it would one company doing the business, and giving just as be very difficult to introduce a system of stamps. full accommodations to the public. GO VERNMIENT TELEGRAPHS. Mr. WABHBURN-YOU propose that your company New Jersey could not constitutionally impose that should furnish the operators? tax. Mr. HUBBARD-Yes, sir. Mr. ORTON —I admit the right of a State to im" Mr. WASHBUR —Do yOU propose, too, that the pose such a tax on all business done within the postmasters shall act as operators? State; but I deny that any State has the right to imMr. HUBBARD-A provision provides that the pose a tax upon commercial intercourse or commupostmasters may act as operators, with the assent nication between the citizens of one State and those of the Postmaster General. of another. That certainly is a plain violation of the Mr. WASHBURN-Exactly. Then where a post- Constitution. But, as to the license tax, I don't see master acts as an operator, would he receive his how we can get around that. We are taxed now pay from the Government or the company? as high as a thousand dollars for the right to do iMr. HUBBARD-He would receive his pay by way business in a single place. I think our license tax of commission on the business done from the Govern- in the city of Mobile is $400 or $450. ment, the same as many country postmasters now Mr. HUBBARD —My idea in regard to these State do on the business that is done at their post-offices. taxes is this, that until Congress regulates the matMy friend here (Mr. Orton) was at one time presi- ter any State can impose a tax of this kind. dent of the strongest opposition company that was The Fifth reason is, because this bill regulates ever started in the United States-the "United commercial intercourse with foreign countries, and States Telegraph Company. Even he, with prob- among the several States which are now without the ably the greatest executive ability of almost any regulation of any general law. officer in this country, could not save that company Sixth-Because it fixes a maximum sum for press from making an annual loss of a hundred thousand rates, instead of the agreements they may make bedollars a year. And yet he will tell you that when tween them. that company was merged in the Western Union Seventh.-Because it will popularize the telegraph Telegraph Company, the entire expense of doing by adding to it the postal facilities. The universal the business was reduced by the Western Union experience in England, and I believe the same in this Telegraph Company, besides saving the seven country, is that increase of facilities increases busihundred thousand dollars which that company ex- ness almost as much as the reduction of rates. The pended. present facilities accommodate a certain kind of busiMr. ORTON-That is substantially true: opposi- ness, but are not adapted to accommodate the great tion increases the expense to both parties. mass of business. Because the general business of Mr. HUBBARD-Third-Because it substitutes the country settles around the Post-office, and not uniform and low for variable rates, which discrimin- around the railroad station, where the majority of ate against different sections of the country. There the telegraph offices are, except in the large cities. are now, as I explained the other day, four centres, Now, by reducing the rates, it will bring into being with four different rates for each centre, and in each or existence an entirely new kind of social corresone of these centres different rates on competing pondence, which is now done but to a very limited lines, and where there is no competition. That is extent. That social correspondence will be aca great drawback to business, because no one can commodated through the post-offices. tell, until he gets to the office of the Company, what Eighth.-Because it will remove all danger of the rate he is to be charged. control of the telegraph falling into the hands of Fourth-Because one State can now, by taxes or speculators and dishonest men. I have stated here licenses, prevent any general system of low tariffs before that I believe the telegraphs are now manbeing carried into effect. For instance, they opened aged honestly and fairly; the first interest being the some lines in Montana, a short time ago, and the interest of the stockholders, the second interest the territory at once put very high licenses upon each interest of the public; but it can, at any annual office that they had opened. Any State, I suppose, election, pass out of the hands of these officers into has a right to impose whatever tax or license it may the hands of other officers, who will manage it, for please to. As long as that is the case, no national the purpose of speculating out of the interests of system can be introduced. It is just exactly like the country. the case of New Jersey, imposing a tax upon every Ninth.-Because it fixes the capital of the busirailroad passenger passing through the State. You ness at the actual cost of construction, limits the can't fix and agree upon a regular tariff of rates dividends, requires accounts to be rendered, and when you have this uncertainty to deal with, and authorizes directions of the routes to be made by the when at any time anyone of the States can impose Postmaster-General, and because the postal telea heavy tax on you, and put an end to your plans. graph is controlled by the Government and the other Mr. LAWRENCE-The Supreme Court decided that is not. 8 G 0 VERNMENT TELEGRAPHS. One word more and I am done. In regard to the stronger. You then have a double capital, upon rates: My own belief is fortified by that of the best which dividends must be paid. The corporation, in telegraphers in the country, that the enlarged busi- the long run, will always get a return upon the ness can be done at the rates named in the bill. The capital invested in it. For instance, as Mr. Orton rates of the International Telegraph Company of has said, this Franklin Company is losing money Maine do not much exceed about 30 cents. That from day to day, and cannot long continue without Company pays its expenses, and pays a small an- a failure. nual dividend, and yet has to compete with the Mr. ORTO —You spoke of the International ConWestern Union Company. The Franklin Telegraph pany making a small dividend. Are you aware Company's rates for messages are about 30 cents. that if it should apply that small dividend, which It does not really pay its expenses. And, when I you say has been paid, to a sinking fund, for the say that, I mean it just about pays its operating ex- renewal of the poles when they decay, that the penses, but has never accumulated a sufficient fund aggregate of the dividends would not be equal to to keep its lines in repair. the cost of renewing the poles. Have you ever Mr. WASHBURN-What competition does it have given any attention to the great destruction that is -the Franklin? going on all the while in this property? Mr. HUBBARn-That has a very active competi- Mr. HUBBARD —I have given attention to it, as a tion. But this can be said in regard to the Frank- general rule. I have not given particular attention lin Company, that it has a larger business than the as relates to the International Company. Western Union Company, in proportion either to its Mr. ORTON-It is a general question, covering the capital, miles of line or miles of wire. whole ground. The Franklin Company not only is Mr. WASHBURN-If it had a monopoly of the unable to pay dividends, but has not paid the interbusiness-if it had all the business that is done by est on its debt for two years, and its property is its competitors-at the same rates it is now oper- going to decay, without any ability to restore it. The ating, wouldn't it pay its expenses and make a profit International has had a little better fate, because in addition? there has been less competition. The chairman inMr. HUBBARD-I have no doubt that it would; quired what competition the Franklin Company had. and it is simply from these two facts, that these two I will answer the question, if you will allow me. companies are in existence, that I have been led to There are between Washington and New York the believe that the business can be done at those rates; Bankers and Brokers' Company; between Washington and the managers of those companies have expressed and Boston the Franklin Company; and between the opinion that the business of the whole country Washington and New York the Pacific and Atlancan be done at those rates. Of course the average tic Company-the Western Union Company being a distance over which their messages are sent is small; competitor with all of them over the entire route. I. suppose 150 miles would probably be the average Mr. ORTON (to Mr. HUBBARD)-I understood you that messages are sent on either one of these com- to say, in your general remarks yesterday, that panies' lines-less than that on the International during your investigation of this subject your views Company's lines, and perhaps a little more than that had been modified in respect of the cost of doing the on the Franklin. Of course the expense increases service. with the distance, but not'in proportion to it. Mr. HUBBARD —Yes, sir. Mr. BEC —You have stated that competing corn- Mr. ORToN-Have you based your modifications panies largely increase the expenses, and that one upon information acquired as to the cost of rendering company might be able to do the work and make the service in this country merely, or have you taken money, while two companies would, at the same into account the fact, firstly, that a large percentage time, lose money. (I assert 50 per cent.) of the cost of doing the busiMr. HUBBARD —Yes, sir. ness is paid for labor; and, secondly, that the cost Mr. BEcK-Now, take the Franklin and the of that labor in Europe is less than half what it is Western Union Companies-they both have branch here. I wish to know to what extent you have offices in this capitol. Isn't the effect of this to very considered this subject? largely diminish the cost of telegraphing to the Mr. HUBBARD-I have considered it; and I stated public, by having the two companies in opposition? on the first day that I alluded to that fact, that here Mr. HUBBARD-I do not think it is. I think if operators, according to the statement of the Westyou will examine the history of corporations, the ern Union Company, could do nearly three times world over, you will find that the immediate effect the amount of work that the ill paid and half starved is just as you say —first reducing the prices to the laborers of Europe could do, and that here operators public. Then the next thing is the failure of the receive by sound, which enables them to reduce the weaker, and the absorption of the weaker by the expenses, and reduce the number of operators, and GOVERNMENT TELEGRAPHS. 9 receive a greater number of words in the same Mr. HUBBARD-I do not know exactly. Belgium time, which, to a considerable extent, therefore, gets one franc upon it. compensated for the higher wages paid here than Mr. ORToN — ere is the tariff. From Paris to abroad. Belgium there are five different routes. The rate Mr. ORTON-You admit -the fact of the higher depends upon the route by which the message is wages here? sent. The presumption is that it always goes by Mr. HUBBARD-Of course. the most direct route, and at the lowest rate; but, Mr. BECK-I understand you to say that the rate in the event of an interruption of that line, it would of charges for telegraphic messages all over Bel- go by another route. The lowest rate is 3 francsgium is now ten cents. 60 cents. Mr. HUBBARD-The rate of what is called inland Mr. WASHBURN-Rut you can send from Paris messages, that is, from one town to another within to the Belgian frontier for 1 franc. the territory of Belgium, is ten cents. Mr. ORTON-YOU can send from one part of Mr. BEC —And that the average cost of sending France to any other part of France for 1 franc; but a message in Belgium was 17.49 cents in gold? from the French side of the frontier over the border, Mr. HUBBARD-Yes, sir; in gold. ten miles, it would be 3 francs. I have a list of Mr. BECK-Yet, at the same time, the telegraph European charges, which I may as well put in here: in Belgium paid its own expenses.* From Calais to the Hague is 120 miles, and the Mr. HUBBARD-Yes, sir. I say so. tariff is from 4 to 7 francs, under the circumstances Mr. BEKx-I do not quite comprehend how far which I have explained. The lowest tariff is 80 cents, the international messages, and the cost of them, gold; it may be $1.40. And so with the other rates were able to bring up that great difference between comprised in this list. 10 cents and 17 cents and a fraction, and yet pay Mr. ORTON — read, while in Paris, last January, expenses, in a small country like Belgium. Please the speech of the chairman, delivered in December explain it. last, and I recall particularly his statement that Mr. HUBBARD-The reason is that on every inter- from the most southerly part of France to the most national message passing through its territory, Bel- northerly part of Great Britain a message may be gium gets a franc. They estimate the cost of that sent for 55 cents. The chairman had been misinmessage at about a quarter part of a franc; so formed. I have the new French tariff in my hand, that on that message they make three quarters of and I find the rate charged is $1.20-more than a franc. double the amount stated by him. But that is not Mr. WASHBURN-If you wanted to send a dis- all. I have now taken the most northerly part of patch from Paris to Brussels what would be the France and the most southerly part of England-.expense of it now? only 23 miles apart-and I find the tariff is the same. TABLE OF TELEGRAPHIC TOLLS BETWEEN STATIONS IN FRANCE AND OTHER EUtROPAN COUNTRIES. Distance Tariff for 20 words. Address ^FROM T1 in Air Line. and signature charged for.'Toulon............................... Rome............................... 310 Miles. $1 00 to 2 00 Cherbourg........................... Channel Islands.................... 30 " 8 Nice................................ Belgrade......................... 600 2 00 " 2 20 Nice................................ Geneva...............................................0 0 200;Strasburg............................. Kalise............................. 490 " 1.0 2 40 Bayonne........................... Saragossa.......................... 110 " 80 Calais................................. Hague.............................. 120 80 1 40 Metz.................................. Luxemburg... 30 50 1 30 Cambray.............................. Cologne....................... 140 " 80" 140;Strasburg........................... Munich............................. 160 60 140 etz.................................. Dresden............................ 320 80 140 Cambray...;................... Brussels........................... 60 " 60 " 1 40 Besancon............................. Constance............ 140 1 20 " 1 40 Nice................................. Bastia............................. 100 40 Calais................................ Copenhagen...................... 510 1 30 2 20 Perpignan..................Algiers............................. 380 120" 1 80 Cambrayg............................Helsingborg......... 520 " 1 60 250 Cambray.I.. elsingorg. 320 10 o 2 50 Mlarseilles........................... Majorca............................. 250 80 Calais................................. Dover.............................. 30 1 20 Paris................................. Brussels........................... 130 0 " 140 Strasburg............................. Stuttgardt.......................... 60 60 80 Strasburg........................... Carlsruhe........................... 40 60 1 40 Lyons................ Geneva............................. 62 " 60" 140 Bayonne.............................. Braganza..... 250 " 1 00 * The official reports show that the telegraphic receipts in Belgium, from 1865 to 1869, were $819,283, and the ordinary working expenses $918,576, showing a loss in five years of $99,293. The telegraph in Belgium has never paid expenses for a single year since the reduction in the rates for internal telegrams in 1865. ~~~~10- GO T0ERlNMELVT TELEGRAPHS. Mr. WASHBURN-DO you mean to say that a Mr. Hubbard's reply to the question as to Belgiumz cable dispatch across the Straits of Dover is 120 I think you stated they were making profits. cents? Mr. IHUBBARD-I stated that, according to a Mr. ORTON-Yes, sir. letter which I have from the Director of the TeleMr. WASHBURN-Does that cable belong to a graphs for Belgium, for last year, the expenses were private company? about 17 cents and the receipts were about 18Mr. ORTON-I cannot answer that question. I that is for 1869. do not know. Mr. ORTON-In order that our statistics might. Mr. WASHBURT —This is true, in point of fact, not be challenged, as they have been by the honothat from Nice, if you please, in the extreme south rable chairman and others, we have taken muchl of France, you can send a dispatch for 20 cents pains, since the 1st of January, by correspondence to Calais; and from Dover, in England, to Inver- with the Directors of Telegraphs of every country ness, in Scotland, you can send a dispatch for 24 in Europe, to procure the latest information on this, cents; that would be 44 cents for a dispatch from subject, and we are prepared, not merely to makeNice to Inverness, leaving out the crossing of the the declaration, but to give the authority for every channel. Are not cables more expensive to ope- material statement we may make. According torate than land lines? our data the receipts of Belgium in 1868 were Mr. ORTON-On routes where the volumeof busi- $239,420, and the expenses $258,385, exclusive ness is large enough submarine cables are a great of the amount paid for construction, which was deal cheaper than land lines. $21,288. They have got into the habit, on the other Mr. WASHBURNE-Is this submarine cable ope- side, of manipulating their statistics, and we have rated by private parties? dug out of the Swiss report how it is done. Instead Mr. ORTON-I do not know, but I think not. of charging up their construction expenses right Mr. WASHBURN-I think there is where you will along, they set aside a capital sum, and draw from find the expense comes in. it what is required, but charge into the construction Mr. ORTON-But this discrepancy is not confined account nothing but the interest on the capital to cables. From Strasburg to Stuttgardt, 60 miles which is expended in construction. Now, by that. distant, the tariff is from 60 to 80 cents; and from sort of hocusing returns, I could make a splendid Strasburg to Carlsruhe, a distance of 40 miles, the exhibit. tariff is from 60 to 140 cents. There are no cables Mr. PALMER —Mr. Hubbard made the statement there. This extra charge is put on in consequence that in Europe, as a general rule, messages were reof crossing the line, even without repeating the dis- ceived by the eye instead of by the ear, while in patch. It is the protective policy applied to the this country they are received by the ear or by telegraph. Some of the European Governments sound. Did you find that so in your observations charge more for permission to shoot a message in Europe? through the air, over the soil, than they charge their Mr. ORTO —As a general rule, a modification of own people for rendering the entire service upon the Morse register-an instrument which makes: lines which they construct and maintain, so that the the Morse characters on a strip of paper-is used discrepancies in the charges for telegraph messages not only in England but throughout Europe. The are not all confined to the United States. And this needle system, working with two levers right and. will explain why the losses of some of these coun- left, read by the eye, from the fluctuations of a tries are so much less than they would otherwise needle, has been used to a considerable extent in be. If we take the receipts of all these countries England, but is now generally abandoned. The' separately, there is not one of them that would Morse register, the first Morse instrument intronot be found to have sustained a large loss; and duced into the United States, has been substituted taking all the countries of Continental Europe, the almost entirely for the others. We' have received: loss on the telegraph business in 1868 the last from Mr. Cully, the electrician of the. Post-officeyear, for which we have complete returns, was over Telegraphs of Great Britain, within a fortnight, an $2,000,000 in gold. order to make and send out to him some of our Mr. WASHBURN-That observation in regard to latest and most improved sounders-the instrument. transit messages will hardly apply to any extent to to read by sound. England under their new system. Now if the Eng- Mr. PALMER-Mr. Hubbard made that point, aslish system is a success, it must be from its internal illustrating his statement, that the increased facility business, must it not, in the main? in this country for receiving messages was more Mr. ORTON-There is a large volume of business than equivalent to the cheapness of labor abroad. between England and points on the Continent- Mr. ORTON-In that Mr. Hubbard is mistaken, France and Germany especially. I want to answer The Morse register will run as fast as the instru GOVERNMiENT TELEGRAPHS. 11 ment that is read by sound. It takes no more tined to be introduced largely for use between time to make a dot and dash on the paper than it offices and private residences, if the Government does does to make the " clicks" by the sound of which not prohibit it. There is a very large use made of they are distinguished. If it is running, as in the it now in the principal cities, between nianufactories case of the automatic machine which is used in and counting-houses, and a variety of machines are England, in connection with the ink writing re- being produced, such as neat printing instruments, gister, up to 80 words a minute, it is faster than by which the message is printed in Roman letters, an operator can copy; that rate of speed would the dial, and many other instruments-all useful. require a copyist. But both operator and copyist Mr. WAsISBUR — But those instruments require together receive only an average of 28 shillings skill on the part of the operator? sterling a week, the total for both being about half Mr. ORTON-Some, but not very much. They the average pay of competent operators in our work very slowly, as a general thing, and are not principal cities. We are able, however, to do better adapted for use on long lines. work with our facilities-that is, we can work a Mr. BECK —It occurred to me to be the fact that longer circuit with our apparatus on No. 9 wire, in when a message is taken by sound, the person rethis country, than they can work with their heavy, ceiving, without looking at the thing that was comlumbering, complicated machines on the No. 6 ing, would write out and have it finished by the wire. We should do still better if we had the No. time the instrument finishes. 6 wire, and I have been introducing, within a few Mr. OaTON-That is exactly the case. He cornmonths, a larger size. mences to write when the first "click" is made Mr. PALMBER-How long a circuit can they work, and, if you will reflect a moment, you will see that without repeating, by paper? he is listening precisely as this stenographer is lisMr. ORTON-I cannot answer that question. They tening to me-concentrating his attention on the are not obliged to work very long circuits; 600 paper before him, but with his ear fixed to catch miles or so, I suppose to be the maximum, while what is coming; and as he gets the connection in the average is much less. what is coming along, it aids him to interpret the Mr. LAWRENCE - Isn't this about the case as sounds; and when the writing is done at the sendbetween the sound and registering insuments ing istr: ation, the message is all written out at the rethat the sound instruments are cheaper, while the ceiving station, and ready for delivery. registering instruments afford more perfect guaran- Mr. BEcK-Therefore he must do a larger amount tees for accuracy, and at the same time preserve the of work than if he had to look at the paper and record-for instance, an operator receiving a mes- take it off after it is all done? sage by sound is liable to forget, in writing down Mr. ORToN-Yes, sir. An expert operator will the sounds he has received. take it from the paper when it comes along, but Mr. ORToN —No; the two acts of hearing and with this division of his senses: the eye, the finger, writing are almost simultaneous. The fact is, there the touch, are liable to confuse each other-to opeare fewer errors made by the sound operators than rate as disturbing influences; and he may misread by those who read by sight. and make an error-in fact, is more liable to do it Mr. LAWRENCE-How can errors be made in from the paper; but it should not make any particu writing from the record of the instrument, when all lar difference as to time. The principal saving is in the dots and dashes are on the strip of paper on the expense of the instruments, and the facility with which the record is made? which they can be used, the register costing about Mr. ORTON-The errors which will be made by three times as much as an ordinary sounder. the operator who reads by sound result, not from Mr. HUBBARD-I would like also to bring here his ignorance of the alphabet, but chiefly from im- the statement of Professor Morse, lately published, proper writing at the other end, making a dot too in which he gives a statement of the messages sent long or a dash too short; and such errors change in this country and on the other side. not merely a letter but a combination of letters, Mr. ORTON —The statements of Professor Morse and make new words entirely. If I should take up were based upon a series of tests made at his request, your time I could demonstrate how it is done-even while abroad, acting as one of the commissioners to a flash of lightning on the wire may do it. the Paris Exposition, as to the utmost capacity of Mr. LAWRENCE — -ave you seen this new instru- American operators, lines and instruments. Of course ment-the specimen presented to us the other we selected those known in the service as the most morning-by which anybody can send messages? expert operators, and the results exceeded anything Mr. ORTON-Yes, sir. which has heretofore been accomplished by any Mr. LAWRENCE —Is it of any value? operators in the world. But, you will see in a Mr. ORTON —It is. The telegraph system is des- moment that this was not any more a test of the 12 GO VERIVNMENT TELEGRAPHS. actual capacity of the American operator,ascompared business in NewYork must have delivered 1,000 with the English operator, than the fact that Dexter messages per day during the same time. Taking can go a mile in 2.17 establishes the fact that the these into the account and reducing press reports to average American horse approximates to that rate messages it would appear, that in proportion to popuof speed as compared with the English horse. lation New York City received nearly ten times as I desire to refer to one point, which I may as well many messages as London. put in here. I think the impression prevails to some extent, especially among those who have been listen- Mr. Chairman'and Gentlemen of the Committee: ing for two years to the able arguments and re- In endeavoring to answer some inquiries propresentations of Mr. Hubbard, that,the telegraph pounded by the committee, and addressed more in the United States is a convenience which our directly to Mr. Hubbard, I have anticipated people would be exceedingly glad to use, their tastes some points which would have come in more appro" and inclinations being in that direction, but which, priately at another place in the argument which on account of the exorbitant rates, and the general I desire to submit; and yet, perhaps, the best bad management of the service, they are debarred place to furnish any item of information will be from using; so that, compared with European coun- where, by the inquiries of the members of the comtries' the use of the telegraph in the United States mittee, it appears to them to be needed to illustrate is merely a bagatelle. Now, if any such impression the subject as it is passing through their minds. I has been made upon the minds of this committee, shall therefore be glad if, during the progress of this let me ask you at the outset to sweep it entirely discussion, you will interrupt me at any time for a aside. In no country in the world is the telegraph fuller explanation of anything I may submit, or used so much, in proportion to the population, as in with any inquiry which may be suggested to you. the United States, at the present time. In Switzer- - It is scarcely necessary that I should speak of the land, I believe it is about the same. The differ- importance of the telegraph as a means of comence is very slight, if any; but I think I am munication, either to the people of the United safe in making no exception, and in saying that States, or to the people of all other civilized counat the present time there is no country in the world tries. The fact that this Committee is in session, where the telegraph is so much used, in proportion considering the subject, is evidence of the interest to the population, as in the United States. It has which is being felt concerning it here. But wherebeen represented that, since the inauguration of the as, in other countries it has been necessary for the Governmental system in England, there has been a Government to provide telegraphic facilities, as very large increase in the number of messages. I well for the convenience of the people as an element shall not dispute that statement, for no comparisons of power, there has not existed in this country, at have been made between the traffic of this year and any period of our history, any necessity for the years before; but there was published in The Electric intervention of the Government in any of the enterTelegraph Review for February 26, 1870, an article prises undertaken by the people, and in the success making what was supposed to be a startling announce- of which they are directly interested. It was unment showing the average number of messages which doubtedly necessary that, in the early days, the had been delivered every day in the City of London. Government should assume the postal service, else It was stated that during the week ending February the colonies might not have enjoyed the means of 19, 1870, there were delivered in the City of London communicating with each other-and some means 15,479 messages, being an average of 2,579 per day. of communicating were undoubtedly essential to Now the population of London, at the last census their protection and development. But in respect was 2,800,000, and taking that week as a basis, it of the telegraph, we have now reached a period appears that all the telegraphs in Great Britain and when, more than at any other in our history, it Ireland-and for that matter all European tele- meets all the wants of the public in all sections of graphs-centering in London, delivered in that great the country; and yet at this time a Congressional city but one message per day for each 1,087 inhabi- Committee is considering the propriety of taking tants, while the number of messages delivered in the charge of this business, and of prohibiting its further City of New York, by the Western Union Telegraph extension by private enterprise, on the assumption Company alone (for the month of February), exclu- that such action is necessary for the protection and sive of press reports, was 77,'45-being an average promotion of the public good. It seems proper that of 3,239 per day, and, the population of New York at this point I should inquire-as I do most rebeing 805,658, shows that the Western Union Con- spectfully, Mr. Chairman-whether any portion of pany delivered one message per day for every 248 the people of the United States have, during this inhabitants, against one for every 1,087 inhabitants session of Congress, or any preceding session within in the City of London. The other companies doing your knowledge, either by personal appearance be GO VERNMIENT TELEGRAPHS. 13 fore committees, by letters addressed to members, not I didn't intend to say. And I also stated that or by petition, requested any intervention on the I believed the suit was still in progress on appeal. part of the Government in this business-and es- Mr. ORTON (to Mr. Hubbard)-Did Mr. Davis aupecially whether they have alleged any grievance thorize or request you to submit any complaint against the company which I particularly repre- against us to this Committee? sent? [No reply was made to this inquiry.] I Mr. HUBBARD —He did not. realize the disadvantages under which I labor, Mr. LAWRENCE (to Mr. Orton)-You spoke of in representing an interest to which has been fasten- correcting abuses. Do you concede the power of ed the catch-word, and against which has been Congress to regulate and correct an abuse of the raised the cry, "monopoly." And yet there is no telegraph, where the lines extend into two or more greater monopoly in the hands of any private com- States; and when you deny the power of the State pany than the post-office is under the control of the to tax your income derived from messages sent from Government. The mere fact of a monopoly proves one State into another, do you not thereby concede nothing. The only question to be considered is, that it is a subject over which Congress has power, whether those who control its affairs administer under the clause of the Constitution giving power them properly and in the interest, first, of the to regulate commerce between the States, and canowners of the property, and second, of the public. not Congress regulate and correct abuses-regulate It seems to me that this is the proper question, and the charges, I mean? that, so long as private enterprise provides reason- Mr. BEc —Suppose this case of Davis was true, ably well for the public convenience, it is impolitic and was worse than that, what is your idea of the for the Government to interfere, unless for the correc- province of Congress over you? tion of flagrant abuses. But if no abuses are alleg- M ORTON-Congress has no control over such ed-if no citizen of the United States comes here matters any more than they have over the private directly in his own behalf, or through a representa- business of any man who seeks to profit by deceiving tive, and alleges a grievance against the company g the public. That abuses exist, as offences existed with which I am connected - in the olden time, is undoubtedly true. The only Mr. WASHBURN-YOU were not here, I believe, question which concerns us is, are we doing our best when Mr. Hubbard stated a grievance-the Davis to remedy the abuses and to protect the public from case. them? Let me say here, at the outset, that I hope no Mr. HUBBARD-What I stated, as near as I can sensitiveness on the part of the gentlemen of the recollect, was this: I began by stating here, as I committee will deter them from asking me any queshave often stated before, that I believed the officers tion whatever, on any subject concerning which they of the Western Union Telegraph Company intend to would like to have information. I will either give manage their business fairly and honestly; that I you a frank, straightforward answer, or tell you I believed they had a monopoly of the commercial do not know, and in either case it will be the truth. news of the country, which, in other hands, might Now as to the Davis case. I had not long been operate greatly to the injury of the whole commer- connected with the Western Union Company when cial community. I then stated, as an instance, as I was assigned to duty as chief of the bureau for a way in which it might be done, the case of Davis, the redress of grievances, and for nearly a year my of Cincinnati, without stating whether the facts were knowledge of the business was principally confined true or not. It would have answered my purpose to learning, with great accuracy of detail, what the equally well as an imaginary statement of facts. I telegraph did not do, or what it did not do well. I stated that Davis was in the habit of receiving from ascertained that parties in New Orleans, in Cincinhis partner in New York commercial messages, and nati, and in the different cities of the country, were selling them out to his customers; that the commner- in the habit of receiving from correspondents encial bureau of New Yoik was established; that they gaged to report the markets, from New York and desired to establish an agency in the city of Cincin- other principal cities, full market reports during the nati; that they asked Davis to become associated day, which were duplicated ten, twenty, or a hunwith them as their agent, which he declined; that dred times, as the case might be, and sold to subsubsequentlyto that he complained that his custom- scribers at an agreed price per week. Competition ers did not receive their messages as promptly as between the rival parties engaged in selling these the messages were received through the Western market reports in the same place had introduced a Union Telegraph agency at Cincinnati. One by new competition; they were competing with each one they fell off, and Davis thereupon sued the other to see who could bribe and control our operaWestern Union Telegraph Company, alleging that tors most to put their messages ahead, and thus they were improperly detained, and recovered dam- give one an advantage over another. ages against them. Whether the facts were true or Sir, it was to correct such abuses, which if per 14 GOVERNMIENT TELEGRAPHS. mitted to grow, would demoralize the whole tele- the cables on the other side send their messages in graphic service, destroy public confidence in the such order as they please. We assume that they integrity of its management, and seriously damage send them in the order in which they are filed, but important interests, both public and private, that the we do not know anything about it. In the next Western Union Company established the Commercial place, the foreign market reports distributed by the News Bureau-this great bugbear, represented to you Commercial News Bureau do not come to us at all; as endangering the public interests, but which is real- they are sent to the New York Associated Press ly a means for their protection, as I hope to explain to in cipher; and although the messages pass over our your entire satisfaction. It was after weeks, and lines, we have no means of ascertaining their conindeed months of careful consideration, that we de- tents until they are translated and handed over cided to undertake it, more as a means of disci- to us. Now, if the officers of our company should pline for the correction of abuses in our service, collude with their subordinates, and both together and to protect the public against fraud and imposi- should collude with the Associated Press, and these tion, than as a source of profit. At the time of three parties should combine with the managers of the which Mr. Davis complains, some of the corres- cables on the other side, it would be possible to take pondents in New York were in the habit of sending some temporary advantage of it. But I submit, out reports from that city purporting to give the gentlemen, whether the fact that it would require state of the foreign markets on days when the the cooperation of so many persons, subordinates lines connecting with the cables were not working, and superiors-whether that would not of itself be a and no foreign messages could come through. These barrier to any improper use of this news? reports, manufactured in New York, were sent to Again, the same news can be, and is obtained Cincinnati and other western cities over our lines, daily by private individuals. There is a contest all and thus we were being made parties to the fraud the while as to time. The banker in Frankfort, if which was being perpetrated upon the unsuspecting he gets a point, seeks to send it to his house in New purchasers of this bogus news. Only the men en- York as soon as he can. The great bulk of this gaged in this nefarious business have complained, business is done in code or cipher, the dispatch and it was because of our efforts to.break it up that being composed of such words as " cats," " dogs,'" we were brought into court at Cincinnati. We "bricks," which are entirely meaningless, to all have paid no damages, and do not expect to pay except the holder of the key. any. But to resume the Davis case. The bribery of Mr. BECK — statement was made, I think, when our employes was proven and admitted. It exyou were not here, by Mr. Hubbard, which impressed tended even to the bribery of the boys who carried me at the time, and which I wish your views upon. our messages; and if the amount of genius that has He remarked, truly, that we received, say in New been and is to-day being expended by that same York, at 10 o'clock in the morning, news of all that crowd (for they are still in the field) had been was done in London up to two o'clock; and as you directed to some useful purpose, I see no reason went westward, at the opening of the business why they should not have achieved eminent success. day, we had information of what had been done Mr. Davis's messages were being sent by an operator in London, and elsewhere during that business who had been bribed-I do not say by him, for I do day; and if a great war, or commercial revulsion, not know who gave him the particular money we or information of that kind, that it was extremely detected passing into his hands-to send them ahead important should come by the cable, your company of everything else from a side office in the City of could withhold it until it suited their purposes, and New York. We simply cut out that side office from in the mean time control the market here, put up or direct communication with Cincinnati, and required down the prices, and in fact control the whole cor- all its business to go through the main office in New mercial business of the country. York. That stopped that fraud, but Mr' Davis had Mr. ORTON-I remember, not many years since, the same opportunity precisely, if he filed his busihearing the subject discussed very gravely among ness in the main office, that every other customer several venerable and eminent clergymen and dea- has. During the investigation concerning this comcons, of the immorality, and of course, the impropri- mercial news business, we became satisfied that there. ety of educating the sexes together. The education was a demand in the principal cities for quotations. of boys and girls together at the same school was of American and foreign markets, giving the fluclooked upon with serious apprehension, and it was tuations during the day, which was not being met gravely affirmed that it should be prohibited and either by the papers which are published in the prevented; and yet the very opennesss of such morning or in the evening, or by the private parintercourse, as we all know, is the surest prevention ties engaged in the sale of market news. And w&of any abuse. In the first place, those who control thought it was in the interest of the public that these GOVERNMENT TELEGRAPHS. 15. two competent, and, as we assumed, responsible they were ever familiar with the facts at all-that parties should openly and publicly undertake the years ago, before the establishment of the telegraph,. business, advertising to the public that the New- there were established by enterprising newspapers, York Associated Press and the Western Union Tele- especially by Mr. Bennett, of the Herald, horse exgraph Company together would undertake to serve presses to carry news. The Presidential election them with foreign and domestic market reports. news was carried in that manner for several years.. We assumed that the combined facilities, character After the introduction of the telegraph, and the esand responsibility of the parties, would tend to in- tablishment,.I think, of telegraphic communicacrease that business by giving increased satisfaction tion with I-Ialifax-perhaps even earlier than that to the public. We therefore embarked in it, and -these papers combined, agreeing that certain the business is carried on substantially in this man- news should be prepared of a non-partisan character, ner: When a message is received at the end of the that would be interesting to the public and serve cable wire, it goes up the tube and is sent across the purpose of papers of all complexions of politics, the street through the conductor to the Associated and thus enable them to give a larger volume of Press office. They have the only key by which this news at a dimished cost to each. That was itsmessage can be translated. As soon as it is trans- primary object, and that is its object to-day. There lated they send it back to the commercial came a time, however, as newspapers increased. news office, where the foreign quotations are pre- in numbers and importance, when it became very pared and sent out. The quotations are then desirable for papers at a distance from New York sent to Cincinnati or Chicago, as the case may be, to have news. The result has been that there are occupying say a minute in the transmission; and now in existence, besides the New York Associated when this is done they are then manifolded and Press, the New England Associated Press, the duplicated for distribution through the City of New York State Associated Press, composed of New York. Now, to the extent of the occupa- the country papers in the State of New York. tion of that wire, you may say that it is a prefer- Then we have the Western Associated Press, the ential use of it. Some operator up stairs, if you Northwestern Associated Press, the Kansas and please, is sending a message on that wire; but at Missouri Associated Press, the Southern Assothe signal " C. N. D.," representing the Commercial ciated Press, and the California Associated Press. I News Department, he gives way, and his wire is believe these are all the organized associations. Thetaken for the moment that is required to send that New York Associated Press either supplies the quotation, and in a few minutes the merchants of news at New York for all these associations, or New Orleans are advised of the state of the cotton supplies it under an arrangement with the Western market at Liverpool; Pittsburgh of the petroleum Union Company, for transmitting by telegraph quotations at Antwerp; and Chicago and Milwaukee directly to the papers of the association, for stipuof the grain markets of the world. Thereports are lated sums. In this case the New York Associated sold at very low rates, and are open to all who desire Press contract with us to transmit, at certain hours to receive them. Now, then, if there is anything of the day or night, despatches of 250, 500, 1,000, about this business that is not in the public interest, or 5,000 words, as the case may be, deliverable nobody is so much interested in discovering the fact to so many places; and there may be two, three,. as we are. It was undertaken, as I have stated, in four or five papers in each of those places to which the public interest; is conducted in the public inte- the news is to be delivered. Another arrangement rest; and I here assert, deliberately, that we should is like that with the New England Associated Press. have made more money if we had left it to the cor- They provide their own reporter, who has the entre'e petition of irresponsible parties, but we should to the office of the Associated Press in New York not have served the public so well. city, access to all of its news, and he there makes Mr. WASHBURN-You speak of this news being up from the news arriving by telegraph at the New distributed by the Associated Press. Explain your York office such reports as, in his judgment, will be arrangement with the Associated Press, and state acceptable to the association he represents. We what composes the Associated Press. serve the New England Associated Press by Mr. OrToN-The New York Associated Press is a direct contract with them, they buying the news partnership in which the Tribune, Times, Herald, of the New York Association and paying a stipuWorld u, n, Express and the Journal of Commerce are lated sum for it, and paying us the prices agreed partners. I believe they have regular articles of upon for our services. We have a similar arrangecopartnership, precisely as a business firm. They ment with the Western Associated Press, and with, were organized primarily to cheapen the cost of the the other associations to whioh I have referred, news which they desired to publish. It may be within except the Southern Associated Press, which is the recollection of gentlemen here —it is certainly if supplied directly by the New York Associated %16 GOVERNMENT TELEGRAPHS. Press, the latter paying us the stipulated amount Mr. ORTON-We did have a contract with the for the services which we render. New York Associated Press. We have had no Now, the result of these combinations is, that the contract with them for more than a year, because it Western Union Company delivers to the press of was terminated upon notice given by our Company. the United States annually, for less than a million We, therefore, have no contract with these seven dollars in currency, more telegraphic matter than is newspapers, but are serving them at rates agreed transmitted by all the other telegraphs in the world. upon from time to time, but without any compulsion That is a fact entitled to very grave consid- whatsoever on their part to say anything for us, or -oration. Ours is a popular Government-our peo- not to say anything against us, except as they are ple have an interest in the dissemination of news, so inclined. while most European governments have an interest Mr. WASHBURN-Had you such contract? in suppressing the news. In France, the telegraph Mr. ORTON-We never had such a contract with lines are the arms of its police, and during a portion the New York Associated Press as that stated by of every twenty-four hours the telegraph is brought Mr. Hubbard. One of its members, the New York to a stand still, and no messages are transmitted Herald, in its issue of yesterday, gives the followuntil the supervision-the espionage of the Govern- ing, which, as it is much more uncomplimentary ment superintendents-has been concluded. I say, to the committee than it is to me, I perhaps ought therefore, we are entitled to have taken into to apologise for introducing here: account this valuable service which is rendered "THE POSTAL TELEGRAPH.-The select committo the public at large, and for which they only pay tee which has charge of Mr. Washburn's excellent with their newspapers. The telegraph of the Uni- bill for the reorganization of the telegraph of the ted States is entitled to credit for the enormous con- country has notified r. Orton, President of the Western Union Telegraph Company, to come up tribution which it makes to that result, so that the and make a last dying speech and confession against newspapers printed in Chicago and San Francisco the bill before they report it. If this is all there is this morning are almost as full of news from all parts of the matter there is no harm; for neither Mr. Orf t wrl a t pri i t C o N nor any other man can disprove the great advantages of the bill. But it is well for the people to watch York. I stated to a friend in London last winter, that the movement, lest this invitation to Orton prove I would undertake to produce an American journal, the cover to some new ruse of jobbery." printed a thousand miles from the Atlantic coast, So that, gentlemen, if my arguments shall be so that should contain more news from all parts of the plausible, persuasive, and convincing as to induce world, in a single issue, than could be gleaned from you to modify the judgment which I fear you the London Times in a week. And it is true. Our have formed against us in advance, as "the great telegraphic system-unlike that of Europe, which monopoly;" if you let up one iota, the HIerald is gois under a separate, independent and, in some res- ing to hold it as a cover to some jobbery. I, of pects, antagonistic control in each of the several course, feel complimented by the imputation that it nationalities-covers a continent. We endeavor to is possible for me to "job" with this committee.:meet the requirements of the Press with the utmost I will say further, in reply to Mr. Washburn's liberality. With but few exceptions they are en- question, that we have a stipulation in some of our tirely satisfied with our service, and their voice press contracts, that they will not advocate the estaband influence are overwhelmingly on the side of lishment of competing lines to the injury of the busileaving in private hands a business which has done ness of the Western Union Company. We have so much to promote their interests, and done it so such a stipulation now. well. Mr. LAWRENcE-That is a contract against public Mr. WASuHBURN-Mr. Hubbard remarked, when policy. you were not here, that you had a contract with Mr. ORTON-But it was voluntarily signed, and this Associated Press, which did not allow them to was originally suggested by some of the press speak in disparaging terms of the Western Union themselves as the best means of keeping some of Telegraph Company. their own attaches from occasionally running off Mr. BECI —It has been, I think, suggested by with a few shares of new telegraph stock in their Mr. Hubbard that perhaps the very cheapness with pockets, and writing the swindle up in the paper -vhich you were furnishing the press, especially, next morning against the interests of the proprierequired you to charge private individuals a great tors. They thought it would be best to have it in deal more than you otherwise would, in order to the contract, and then there could be no dispute keep up the general average profits, and pay a divi- about it. I fail to see wherein it is against public dend on your stock, and that the private individual policy. I think the holders of stock in the bankrupt is paying more than he ought to, in order that you Telegraph Companies which have sprung up within.might serve the press cheaper than you ought to. the last few years, have not a very exalted opinion GOVERN1IMENT TELEGRAPHS. of that exercise of the freedom of the press, which members of the committee concerning the orgainduced them to invest their money where it will nization known as the "Associated Press," and never return either principal or interest. the relation of the Western Union Telegraph Mr. WASHBURN-There are seven papers in New Company to that association. I explained that York that compose this Associated Press? it was a partnership of seven journals, in the Mr. ORTON-Yes, sir. city of New York formed, primarily, for the purMr. WASHBURN-Was that the original number pose of increasing the quantity of news, for associated together? their own use; but which had become dealers Mr. ORTON-I believe the number was originally in general news by supplying similar organisix, and subsequently increased to seven by the ad- zations in different parts of the country with mission of the New York Times. news gathered at New York, and receiving in Mr. WASHBUR —Can any other paper in New return news collected by them. I explained that York come into that Association-can any new under this arrangement between the Associated paper be established in New York? Press of New York and the various news assoMr, ORTON-NO other paper can be admitted ciations throughout the country on the one hand, without the consent of the present members. The and the Western Union Telegraph Company on fact that other papers have been established, I sup- the other, there was served annually to the press pose, will be a sufficient answer to the last part of of the United States a larger mass of telegraphic the question-such as The Evening Post, The Com- matter than was transmitted by all the other mercial Advertiser, The Star and Mail. telegraph lines of the world. I claim that that Mr. WASHBURN-Doesn't The Evening Post be- fact should be taken into account and allowed long to the Association? due weight in the consideration of any action Mr. ORTON-No, sir; the Post has an arrange- proposed to be taken by the government in referment by which it buys and receives the telegraph ence to the Western Union Telegraph Company news, as does The Commercial Advertiser. The Eve- In this connection allow me to refer to a little ning Mail, The Star and The Democrat do not be- incident which occurred recently in London. long to the Associated Press nor receive its news. During a session of Parliament one evening, a I can see no reason why it should be claimed that few weeks ago, the Marquis of Hartington, the a new newspaper, established in the City of New present Postmaster-General of Great Britain, York, should be admitted into the partnership of the was inquired of whether' the statement in circnpapers which constitute that partnership-the Asso- lation was true, that the reports of parliamentary ciated Press-any more than if I undertook to set up proceedings supposed to be transmitted by telein the dry goods business I should demand that A. graph were being sent out by railroad, on acT. Stewart-who has the largest dry goods mono- count of the inability of the telegraph lines to poly on the continent. if not in the world-should carry the amount of news with which they were let me come into partnership with him. It is purely supplied. The postmaster-general replied that a private matter. It is not against public policy, it was true, to some extent. The low rate of The telegraph lines are open to all those other service offered the press, and the rivalry of cornpapers, on the same terms precisely that they are to peting associations, had resulted in putting upon the Associated Press; there is no abuse, and there the wires a mass of news entirely beyond their has been no abuse. We have an interest to get as capacity to transmit; and to get the news to the much as we can get for our services, and they have country papers, it was found necessary to send it an interest to get as much as they can from our out by train. He declared that he saw no remedy lines, and pay us as little as possible for it. for that condition of affairs, except by a combinaMr. WASIBURN —Suppose these other papers, tion on the part of the newspapers, and tliat unthe Post, and the Star, and the Mail should combine less some such combination was effected-(simiand make a new Associated Press, would you give lar to the combinations among newspapers in them dispatches on the same terms as you do the America)-the telegraph in England would be present Association? utterly unable to render a satisfactory service. Mr. ORTON —Yes, si'f-precisely. Telegraph men in England anticipated that The Committee then adjourned. result, in my discussion with them in January, Mr. WASHBURN.-Hiave the British press made WASHINGTON, D. C., May 11, 1870. any serious complaint with regard to delay in the Mr. ORTON addressed the committee as follows: transmission of news? MR. CHAIRrMAN AND GENTLEMEN OF TlHE COM- Mr. ORTON.-I do not understand that there is MITTEE: When the committee closed its last any considerable complaint at present; there has session, I was replying to some inquiries made by been a markedimprovement in the servicerecently. 18 GO VERNiMET TELEG'APtHS. Mr. WASHBur.- Has there been any increase they are well paid for their work, and are rein the number of messages sent since the govern- tained in office so long as they continue to perjment took possession? form their duties properly; and if, after a life Mr. ORToN.-There has been an increase every spent in faithful service, they become unable to month in the number of messages transmitted as perform their duties, they are retired upon a pencompared with the preceding month, which was sion that will keep them at least out of the workto be expected, since the traffic always materially house. The trouble in England is not peculiarincreases in all northern countries from February ly with reference to any difficulty in the governto June; but as no comparisons have been made ment operating the telegraph; but in erroneous with the corresponding months of last year, I ideas as to the capability of the telegraph, and cannot say whether there has been any actual what is requisite to operate it successfully. There increase over the business of 1869. seems to be a general impression that the only Mr. tWASHBIRN.-Some timle ago, there was a fact to be taken into consideration is, that a wire circular placed upon the desks of all the members, can convey so any es i twenty-four in which the system was represented to be a per- hours. But this idea is a great fallacy. It fect failure. Are you now satisfied that that re- is necesary to provide facilities to meet the presentation was incorrect? presentationL was incorrect? largest emergency that will arise, and when it Mr. ORTON.-NO, sir. I have no doubt of its arises. The great demand for the telegraph is.correctness. I think it has been a failure up to during a very few hours of the day; between a very recent time. I have not the least doubt 10 in the morning and 4 in the afternoon, the a very recent time. I have not the least doubt as to that. great bulk of the telegraphic business in the Mr. BECK.- DO I understand you to say that country is done. In our practice, we make a large te Postmaste:r-General of England declared difference for services rendered before 9 o'clock -tVie Postmaster-G1-eneral of England declaredock in the aerthat the only way in which the difficulty referred in the morning and after 6'clock in the afterto could be overcome was by adopting a system Between ocloc and, we want nearly like that which we have in nAlmerica? as much for news transmitted to the papers as like that which we have in America? Mr. ORTON.-He said, the difficulty could only for private telegrams. be obviated by a combination among the news- There is some difference, for this reason: if an papers. I merely added the suggestion that such operator sits down to send an ordinary ten-word a combination there would be similar to our press message he actually has to transmit on an average associations here. about thirty words. First comes the date and Mr. BECK. —Has there never been any com- address, and afterward the signature, and the bination among their papers?, check-words, bringing up the length of a tenMr. ORTON.-Not that I am aware of. word message to an average of thirty or thirtyMr. BECK.-Had the same evil been existing five words. But a message sent to a newspaper before the government took possession of the tele- in New York has no such address as "Alexander graph? H. Abercrombie, care of Obadiah Robinson, NumMr. ORTON.-No, sir; but the very low rate ber 13 University Place, New York," nor any of adopted-one hundred words for a shilling-and the other extraneous words necessary upon an some rivalry among the papers, had resulted in ordinary business message, except the signature, putting upon the wires, for the press, a much and very often not that; but perhaps three or larger amount of matter than they were formerly four hundred words in succession. in the habit of receiving. On account of these and other reasons, it is as Mr. WASHBURN.-There were not wires enough easy to send one hundred words of ordinary press to accommodate the increase of business. In news, as two ten-word messages. So we can afford,.other words, all that was wanted was, an increase even in our busiest time, to send a hundred or of wires. five hundred words of news at half the price Mr. ORTON.-Increase of wires was wanted cer- charged for ordinary business messages. tainly, but whether that was all, I am unable to But, as I was saying, it is necessary to provide -say. Perhaps it will pay to put up additional facilities enough, not only for the average amount wires to carry news, at the rate of one hundred of business for which the wires will be demanded, words for a shilling, in England. It will not but to meet the great pressure which is put upon pay in this country, however. them during the few active business hours of the There is a great difference between the British day. government and that of the United States in It is true that we can do something to relieve one respect. In England, officials are selected this pressure by inducing the public to send wvith reference to their fitness for their duties; messages during other hours, at a lower rate of G VERNMiENT TELEGRAPHS. 19 service. We are thus able to utilize the wires 5th. That is a larger number of complaints than during a larger part of the twenty-four hours the Western Union Telegraph Company have rethan before, and to give a little lower rate of ser- ceived in ten years. You will observe that novice during that part of the day, without mate- tice is given here, that in case of further corresrially diminishing the profits. pondence on this subject, the above number The British government made a mistake in as- should be quoted. I desire, at this stage of tie discussion, to reply suming that the telegraph offices could be put at this stge of t discussion, to reply into the post-offices and serve all the demands of very briefly to a fe of the poit of difference business; that if telegraph companies had been committee and self, as raised in the speech of the chairman, demaintaining, for instance, five offices, it was a great aste of rent, and f other epeses livered in the House in December last, in so far as great waste of rent, and of other expenses; and gre wast ofr, ad of oer e s ad lie refers to the previously published statements that they could close up four of the offices, and either of myself or of my company. I think I crowd all the business into one. The attempt to o s do this resulted in a great deal of confusion. It shall be able at least to justify the statements I was as if, il New York, the offices of te produce have made, if I do not succeed, as I hope to do, in was as if, in New York, the offices of the produce -, I~~~ -i ^ i fully establishing' their correctness. exchange, the stock exchange, the cotton market, 9.,., i -i ^ I The chairman, in his speech on that occasion, the oyster. market, the petroleum market, etc., as quoted in the Globe of December 30th, 1869 etc., to each of which a wire now leads and an remarked: operator is provided during business hours (as an t i " Though the inventor of the electric telegraph operator is here, during the session of the House was a Aerican, and though the people o the of Representatives); it is as if all these offices United States were the first to adopt that method should be abolished, and transferred into the city of conveying intelligence, they are to be the last post-office. You will at once see that it wTould civilized nation to enjoy the full benefits of that wonderful invention; for it can not truthfully be result in very great confusion and much delay. denied that telegraphing in the United States is When the offices were separate, a message could far more expensive, inaccurate, uncertain, and be transmitted and delivered to the person to tardy in transmission and delivery than in any whom it was sent inside of three or five minutes other enlightened country. It is claimed by all other civilized nations that the same reasons that and a great deal of business could be crowded exist for their controlling the post-office also exist into a short time. But if every operator in gold, for controlling the telegraph; and acting upon or government or railroads stocks, or cotton, or that impression, they all do control it. With engaged inl any other business were compelled to what result I will show by official figures before engaged in any other business were compelled to I close." send every message down to the post-office, and cairman undoubtedly believed INow, while the chairman undoubtedly believed have every message intended for him delivered have every message intended for im delivered that statement to be strictly true, I claim and to him from the post-office, that kind of business shll endevor to show that it is erroneous in would inevitably diminish, whatever the expense every essential particular. of transmission might be. every essential particular. of transmission might be. bsns pl f In Europe, the ratio of miles of line to populaMr. WASrBURN.- Are the business public of tion is as 1 to 2238. In the United States, as 1 Great Britain dissatisfied? to 420. Mr. ORToN.-They have been, very largely. I In Europe, the ratio of miles of wire to populahave no idea but that in Great Britain the plan tion is as 1 to 800. In the United States, as 1 to will ultimately succeed; but it has been a failure 238. up to this time. In Europe, the proportion of messages to popuI hold in my hands a lithographed letter, a lation is as 1 to 19. In the United States, as 1 form provided by the British Post-Office Depart- to 3. ment, relating to its telegraphic service. This In Europe, the proportion of telegraph offices letter is addressed to R. Stewart, Liverpool, in- to population is as 1 to 47,200. In the United closing a one shilling stamp, refunded to Mr. States, as 1 to 6000. Stewart on account of a message not properly The average tolls upon telegrams in Europe transmitted. It commences by saying, "With and in the United States are about the same; but reference to your letter "-these words being in Europe they are managed at a loss of over lithographed. The words following " the 21st of $2,000,000 per annum, while in the United States March," are written, as are also some other por- they pay internal taxes amounting to over tions of the letter. Let me call your attention to $300,000 per annum, besides yielding profit suffithe fact that this sheet is numbered, " 30,307;" cient to provide for large extensions of lines, and showing that 30,307 complaints of thislpccrticulacr some dividends to stockholders-although such kind, had been received, by letter, and acted upon, dividends average less than upon most other inup to the date of this lithographed reply —April vestments on the basis of the cash value. 20 GO VERNMENT TELEGRAPHS. The next paragraph to which I will call your From this it will be seen that the average tolls' attention is the following: between Berne and eleven principal cities in En"The Government of Switzerland appears to rope, in 1852, were seven cents and two mills have been the first to appreciate the importance per mile. Between New York and eleven prinof supplying the public with a comprehensive telegraph system, and to recognize the wisdom telegraph system, and to recognize the wisdom cipal cities in the United States, the average tolls of adopting a low scale of prices." were two and three tenths mills per mile. We have recently received from the Swiss ad- In 1870, the average tolls between Berne and ministration of telegraphs its latest report, ex- eleven principal cities in Europe, are one and tending from the organization of the telegraph three tenths mills per mile. Between New York system in that country down nearly to the pre- and eleven principal cities in the United States, sent time. That report has been translated, the the average tolls are one mill per mile. statistics contained therein carefully digested, and All the above rates are given in American gold, a circular in reference thereto placed upon the excepting the rates in America for 1870, which are desk of each member of the House, a few weeks given in paper currency. ago. I shall only refer to that now, instead of This statement refers to messages sent in the entering into any elaborate review of the matter. daytime, although, as before mentioned, a service I will say, however, that the official reports show of half rates is now provided in the United States that in 1852 Switzerland had thirty-four telegraph for messages not requiring immediate dispatch. offices, and received $708.39 for transmitting mes- They may be filed at the office during the day, sages. sent as opportunity occurs, and delivered the In the United States, in 1852, the telegraph next morning, at one half the ordinary rates. A had been in successful operation for seven years, considerable number of such messages are sent and there were no less than three competing lines at these reduced rates, though the number is in operation on all the principal routes. Lines much less than one would naturally suppose; were in operation from Maine to Louisiana as still, it does stimulate some new business. The early as 1848. number is steadily increasing, and is destined, no The Swiss administration publishes a table doubt, to become quite large, and to constitute an showing the original rates between Berne and element that will effect a material reduction of various cities in Europe, and those charged at the average of the telegraphic tolls in the United the present time. The following is a reproduc- States. tion of this table, with the addition, for purposes I read the following from the remarks of the of comparison, of the rates from New York to chairman in relation to Switzerland: cities of the United States of the same or nearly "On January 1st, 1868, the rate was reduced to the same distances. one half franc for twenty words. For ten cents, therefore, a message is transmitted from one part Dstae Tariff Tarif to any other part of Switzerland; while to nearly FEROM BERNE TO in l iles. in 8i n 1870. every post-office, even in remote localities, a tele-... ______________graph is attached. The introduction of a low London................... 00 $6 59 1 40 scale of charges, which at first was regarded as a Paris..................2400 63 60 bold experiment, has proved a complete success. Marseilles................... 360 4 70 60 The rece0ipts s7how a large surplus over the expencliBerlin....................... 700 3 0 0 80 tures." Vienna....................... 650 3 50 80 Stuttgadt................... 1 00 40 I hold in my hands an extract from a paper Carlsruhe.................... 50 1 21 40 Turin......................... 2 00 40 containing.a summary of the statistics of the olme......................... 90 98 80 Naples........................ 0 6 84 60 telegraphic service in Switzerland from 1852 to Constantinople............... 50 1 60 1869, copied from the official reports of the Swiss 6350 $45 95 $8 40 administration. The total expenditures for tele_______~________ _-~ - __ ~ graph service from Distance Tariff Tariff 1852 to 1869 were..1,72.......... 4,49 82 FROM NEW YOREK TO in miles. in 1852. in 1870. The receipts for telegrams were.. 1,5.,664 47 Louisville.................... 00 $195 5 esulti in a loss of.......... 79,733 35 Wheeling.................... 400 1 35 80 Pittsburg..................... 330 115 25 During those seventeen years 4,294,023 interChicago.....7................. 50 2 05 1 00 Cincinnati.................... 600 1 90 60 nal telegrams were transmitted, the receipts for Buffalo................. 00 7 5 which amounted to $825,386.53, or 19 cents Baltimore.................... 200 70 35 Boston................... 195 30 30 each; and 1,708,293 international and 507,758 Milwaukee.................. 750 2 25 1 10 Galena....................... 1400 2 35 1 20 transit messages, the receipts for which were Memphis..................... 2000 2 85 719,277.94, or 32 cents each. The total num_ 7625 $17 60 $ 60 ber of messages transmitted during tllis period.~~~~~~~~~~~~~~~~~~~~~~~~~~IC~~IIVV t o —~~ GOVERNMENT TELEGRAPHS. 21 was 6,510,074, the receipts upon which amount- administration for that special purpose, and only ed to $1,544,664.46, or 23 cents each. the interest on the sum annually expended is The average distance over which messages are charged to expense account. transmitted in Switzerland is 50 miles, making Mr. WASHBURN.-Mr. Harrington, who has rethe cost of each message per mile 4 6-10 mills. sided in Switzerland, was before this committee, The average tolls upon messages in the United and made the [statement that the Swiss GovernStates is 58 cents, and the average distances that ment received back enough in profits to pay inthey are transmitted 300 miles, making the cost terest on the investment. per mile 1 9-10 mills, or less than one half as much Mr. ORTON.-I submit whether the official reas the average Swiss rate. port of the telegraph in Switzerland is not a more By an examination of the Swiss tables it will be reliable authority before tlis committee than the seen that $210,387.67 were received from " divers opinions of Mr. Harrington. other sources," which the official report states are Our company charges the cost of construction essentially composed of contributions from the and extension in the current expenses; and as communes. The various states belonging to they extend the lines, and add new wires, they the confederation are required to contribute to- reduce the rates. We are now issuing no stock ward the first cost of establishing telegraphic nor bonds; but are putting all we can spare into facilities in any given locality. Every commu- the extension of our property, giving the public nity, desiring to possess a'telegraph within its the benefit at reduced rates. The result is, we district, has to share, pro rata, in the expenditure have now nealy twenty thousand miles more attendant thereon. This contribution is regula-wire in operation than we had two and a half ted by a tax, fixed at 60 cents for every 100 in- years ago, are under larger expenses, and realize habitants. There is a further stipulation which less profit than then requires from the local or municipal authorities I read again from General Washburn's rea guarantee to pay the current office expenses marks: at the minor stations during the first three "The Western Union Telegraph Company havyears. ing made statements in regard to the workings of the telegraph in Switzerland that are unsusThe official report of the Swiss Telegraph Ad- of the teleraph i Switzerland that are unsustained by the facts, I desire to read in this conministration for 1866, contains the following ex- nection a letter from a Swiss gentleman of high planation regarding these forced contributions standing, and one fully informed in regard to all and the necessity for continuing them: the facts of which he speaks." "The general financial result is especially in- I will quote from this letter, thus referred to by teresting, showing an excess of $43,226 in re- the chairman, enough to show how easy it is for ceipts over the expenses, a sum which represents even a high official to be mistaken concerning a the net benefit to the confederation from the t h e net benefit to the onfedera tie i ion romth businesswith which he is not conversant or ditelegraph since the origin of the institution. Or, as the divers other receipts, foreign to those ret connected. He says, "Itwill be seenfrom of the.telegraph proper, amounted during the same the annexed tables that the number of offices in period to $187,296.82, it shows that if the con- Switzerland, in September, 1869, was 442, or one federation had not created these extraordinary for every 5667 of the inhabitants; and the numresources-that is to say, if the government had desired that the expenses of the telegrap7 service er of internal telegrams for 1868, under the reshould be covered by the receipts upon messages, duced rates, were, December excluded, nearly there would be a total loss of $144,070.82." 1,500,000, each message averaging in cost 45 cenMr. WASHBURN.-I have here a letter from times; and apportioned to each 1000 inhabitants our Minister to Switzerland, Horace Rublee, in 600 internal messages." which he says, under date of March 21st, 1870, I hold in my hand the official reports of the that the total receipts from the telegraph service Swiss administration of the telegraph, giving the for 1869 reached 1,043,350 francs; the cost to the whole number of internal despatches transmitted administration for the same period, 913,104 francs; during seventeen years, among them the year leaving 130,246 francs as net receipts. 1868, December included. The number, instead Mr. ORTON.-I will venture the assertion, and of being a million and a half, as the writer of that will prove it from the official record, that, so far letter represents, is but 798,186. I submit therefrom that statement being true, the telegraph in port of the director-general of the telegraph in Switzerland, during that year, did not pay its Switzerland should be accepted as evidence own expenses. There is this fact to be taken into against the opinion or estimate of any other perconsideration: in Switzerland, instead of the ex- son whatsoever. I will explain, however, how the pense of construction and extension being charg- mistake occurred; and it is a very natural mised to profit and loss, they are covered by a special take: he counts every dispatch twice-once when credit of $100,000 —an appropriation made by the sent and again when received. 2 22 GO ERiNENT TELEGRAPHS. Mr. WASHBURN.His statistics are not full, one franc for twenty words, numbered 332,724, December being omitted. But with that omis- in 1867, under the reduced tariff of half a franc, or ten cents for twenty words, reached 817,652, sion, and with the exception of this error of twice ten cents for twenty words, reached 817,652 and this vast increase is not due to any considercounting, is his statement correct, so far as he able extension of telegraph line, less than four goes, in regard to the number of dispatches sent? hundred miles having been added in the meanMr. ORTON. There are other errors. I. will time." read from the letter again. "It will be observ-' The official reports of the traffic of the Beled furthermore, that the allusions, on page 108, gian Telegraphs, published in the Annals of of the statement of the Western Union Tele- Public Works, to which department the telegraph Company, that probably one half of the graphs belong, state that in the beginning of messages transmitted in Switzerlandi were in- 1865 there were 4420 miles of wire in operation ternational or transit is erroneous, as not even in Belgium, and in 1867 there were 7398 miles, one fifth of the total messages transmitted be- being an increase of 2978 miles, or 67 per cent. long to that class." While it is true that the internal messages inThe official report for 1866-the year alluded creased in two years from 332,721 to 817,652, the to-gives the number of internal dispatches at international and transit increased only from 383,159, and of international and transit at 341,316 in 1865 to 471,067 in 1867; thus making 285,758, showing that the latter was 43 per cent the total number of dispatches, in 1865, 674,037, of the whole, or nearly one half, as stated in our and in 1867, 1,288,719, being an increase of pamphlet. 614,682, or 90 per cent. But in anticipation of I quote again from Mr. Wermuth's letter, the enlarged traffic from the reduction in the rates - In regard to the remarks made on page 44 of for internal telegrams in 1865, the Belgian adthe statement relative to the difference between ministration constructed the previous year 1524 telegraphic and postal communications, etc., it miles of wire, so that the total increase of wire might be said that the former, as it exists at pre- was 354 miles, or 80 per cent. The increase i sent, will certainly admit of improvement; one feature of which is being solved in Switzerland expenses was also equally marked In 1864, the by the use of M. Hipp's autographic telegrams, expenditures were only $114,411, while in 1866 which enable messages to be transmitted in the they were $242,901, being an increase of $128,original handwriting of the sender and obviates or 0 per cent. I 1864 the receipts were the necessity of any employee of either telegraphic, n 186 442, h an bureau needing any thing more than the address, t157,87, and in 1866 92,442, sowing an in which at the receiving office is written on the'en- crease of only $34,563, or 22 per cent. velope wherein the autographic message has I read again from Gen. Washburn's speech: been placed, and thus sent unread to the party for whom it is intended. The undersigned "The experience of Switzerland has been merely mentions this fact to show that even equally or more remarkable. In 1867, under the telegraphic communication is being simplified in tariff of one franc, the internal messages for the a manner calculated before many years to require first eleven months of the year amounted to 739,but little more skilled service than is required in 107; while, for the corresponding months of our modern post-offices." 1868, under the tariff of half a franc, the internal messages reached 1,479,304." In reply to the above I will quote the following a from the official Swiss report for 1867. I have already exained ow the chairman " We have attentively observed the improve- w ments in the Morse apparatus, as well as the pro- In Switzerland, during the year 1867, in angress which has been made in the apparatus of ticipation of a large increase of business by the' the various printing, autographic, and other sys- t a o tems. But we are compelled to say that the last reduction of the tolls, great additions were made model of the Morse apparatus, which we have to the lines and wires. At the beginning of 1867, adopted this year, responds to the exigencies of there were 4098 miles of wire in operation in our service in a very satisfactory manner, and Switzerland and on the 1st of January, 1869, that the time has not arrived, in the condition of t our service, for replacing the Morse apparatus there were 6438, (including 832 miles belonging by any other system." to the railways,) being an increase of 2340 miles) From the same authority I quote the following or 57 per cent, in the number of miles of wire, from the report for 1868: while the total increase in the number of mes" The apparatus has not undergone, during the sages transmitted was but 63 per cent. And yet year 1868, any modification of a nature to be it is oficially stated in the report of the working of mentioned here, and the Morse apparatus, under the Swiss lines that there was a time during the diverse forms, has continued to be solely employed summer of 1868 when the number of messages by the administration of telegraphs.". by. Wamishbrntin hi speechnwacs found to exceed the means of transmission. Gen. Washburn, in his speech, next refers to Belgium. He says, "It will be seen that the Let me call your attention to the fact contained inland messages which, in 1865, with a tariff of in that last paragraph. I desire it to be under GO VERNMIENI T TELEGRAiPHS. 23 stood as admitted, that the number of messages mittee a table of your rates throughout the counwill be increased; but also wish you to under- try we shall be very glad. stand that there is another side to the case. The MR. ORTON.-I may say in this connection receipts in Switzerland, in 1867, of all kinds, that the preparation of a table of tariff rates for from the sale of stamps; the receipts of inter- a telegraph system to cover the United States, as national and transit messages;. the contribu- that of the Western Union Telegraph Company tions of communes, etc., amlounted to $164,- does, is a work of immense magnitude. When 707.70; in 1868, to $184,236.49. The expendi- you reflect for a moment that if there are five tares in 1867 amounted to $149,795.29; in 1868, thousand offices, each separate office must have a to $211,821.29. In 1867 there were $34,008.13 separate tariff to each of the 4999 other offices, expended for the construction and repair of lines; you can see by simple multiplication what is inin 1868, $62,881.23. So we see that while the volved in the preparation of such a tariff. The hereceipts went up from $164,000 to $184,000, the terogeneous and confused list of tariff rates growexpenses went up from $149,000 to $211,000; or ing out of the old segregated system of lines, was taking out the amount expended for construction one of the first obstacles sought to be overcome and repairs during the two years, the other ex- by the consolidation of the various lines in 1866, penditures were increased from $115,787.03 to and one of the first duties undertaken after that $148,940.06, showing the increase of expenses, consolidation was the preparation of a complete for 1868 to have been $33,153.03, or 29 per cent. and consistent tariff system. It took the labor I will refer in this connection to another item of from three to five men two years, and cost profrom the chairman's speech, in which he gives bably thirty thousand dollars. The foundation credit to Mr. George Sauer, an American gentle- of the system is air-line distances. This system man residing in Paris, for valuable information was put into operation on the 1st of October last. in regard to European telegraphy. When that system went into operation, a very I caused to be placed upon the desks of the large reduction was made everywhere. In Texas members of the House, a few weeks ago, a review and some portions of the South, the reduction of Mr. Sauer's book,* for the express purpose of wa estimated at fully one haf. giving any who desired to do so an opportunity to You may obtain some idea of the amount of examine them, to institute comparisons, and to reduction when I tell you that the first month confront me with any erroneous statements that after that system went into operation, our reveI may make. Without going into details, I in- nues dropped $40,000. At this time, with ten vite the attention of the committee to that docu- thousand miles more of wire in operation than we ment. I simply put Mr. Sauer himself against had a year ago to-day, and two or three hundred himself. It is impossible for him to state the more offices, making our expenses from $10,000 same item twice alike. He counts his messages to $20,000 heavier, our receipts are $10,000 less both ways, thus doubling the number and greatly per month. The estimated reduction by that reducing the average cost per message. Other tariff throughout the entire country was sixteen errors will be seen by referring to the document per cent. A few days ago, we made a calculation before spoken of. which will show the difference between our preWe claim credit for the Western Union Tele- sent rates and the old rates in a striking light. In graph Company for some progress, from the fact January and February of this year, there was an that the chairman of this committee has not been increase in the number of messages sent by our. able to keep up with it in regard to the reduction lines of twelve per cent over the number sent durof its rates. At no time when statements have ing the corresponding months of last year; our been published in regard to our rates, have they expenses were' increased eleven per cent and a come within gun-shot of the facts. fraction, while the difference against us in net reMR. WASHBuRN.~-Those rates I obtained last ceipts was over $200,000. summer, directly from the telegraph offices. I Mr. WASIHBURN says, in reference to the avehave no doubt but you have reduced the rates rage cost of sending messages: on many lines, and between many places, since " To obtain the true average, they should have then. taken the rate of messages to the capital of each MR. ORTON.-I want you to admit that we ^State from Washington, and then struck the have made a very general reduction. Such is the average." ~fa~ct;-.. That plan involves a great fallacy. It could exhibit a true result only upon the condition that an MB. W7ASHBURN.-I certainly want to be accurate wn I cn. If yu equal tnumber of dispatches were sent to every ofcurate when I can. If you will furnish the cornfice in the United States. The correct way is, to * See appendix. divide the tolls by the whole number of dis 24 GO VERNMENT TELEGRAPHS. patches actually sent. Suppose ninety-nine mes- condition of business is at any given time in any sages are sent from Washington to New York, locality in the United States. After three while one is sent from Washington to Los An- years of careful study of the matter, I am ready gelos, California. Would it be right to add to- to appeal to the telegraph receipts as a criterion gether the cost of the one message to Los An- under all circumstances. gelos, and one- to New York, and call that the This last year the grain business in the West average cost of all the dispatches sent to those has been very dull; as a consequence, the receipts two places? from telegrams from that section, have fallen off Mr. WASHBURN.- But on the shorter lines twenty-five per cent. Business in the South has you do a larger business, while on the longer lines been gaining a little month by month, for the last but little business is done. year or so; and now, the telegraphic receipts from Mr. ORTON.-I scarcely know what you mean that quarter give stronger indications of returnby that remark. Do you desire to have it infer- ilg prosperity than at any previous time since red that the price of transmission is all that en- the war. ters into the question? In other words, that if There is another statement that I desire to you makeithe price low enough, messages enough make, in reply to the challenge of the chairman will be sent to prevent diminution in the net re- concerning the cost of the telegraph lines. In ceipts? the report of the Western Union Telegraph ComMr. WAaSHBIURN.-Oh! no, sir. pany, to which Mr. Washburn refers in his speech, I was not discussing the subject of cost Mr. ORTON.-I wish to say that, while, as ag e subjct of cost general rule, the number of messages will be in- as a matter of ay particular cosequece, but rather to give inform-ation to my stockholders as creased by the reduction of rates, that rule is by iormation to y stockholders as no means universal; there are other elements to to what had been done by the telegraph in Great Britain. be taken into account. I can prove a reduction in ritain. thle nulmber of messages following a large reduc- I stated that it was in evidence by Mr. Scudaion in the rate. I appeal to the statistics in re more, who has been working up this subject in tion in the rate. I appeal to the statistics in re, ference to San Francisco. Under the formlertariff, England, that the lines in England cost a certain the expense of sending a ten-word message from SUm per mile. New York to San Francisco was $7.85; the rate Well, now, see how easy it is for a man to be from San Francisco this way was the same in mistaken in a matter which he knows nothing gold. We endeavored to adjust that inequality about, and to forget one day what he said the by reducing the cost of transmission from San day before. The chairman, I infer, has addressed Francisco to New York 35 per cent, that being at a letter to Mr. Scudamore, to which the latter that time the premium on gold. The rate is now replied, "I am at a loss to understand how I can 15 from New York to San Francisco, and $4 in have been quoted as authority for the statement gold from San Francisco to New York, the ad-, that a mile of English telegraph costs ~143 15s." justment being made on the basis of 20 per cent I will now refer you to what he does say: I difference between gold and currency. Now, hold in my hand the parliamentary blue-book on there are not so many messages sent at $4 as the subject of the telegraph. I refer to the testithere formerly were at $7.85. mony of Mr. Scudamore, on page 149; he says, Mr. WASHBuRN.-TThe reason of this is very "I find that the [telegraph] companies have exapparent. pended in construction somewhere about ~2,200,Mr. ORTON.-It is very apparent to me. 000 or ~2,300,000-I am not quite certain of the Mr. WAsHBURN.-The railroad has greatly de- amount. I think it is probable that I am within creased the time of mail communications between the mark rather than over it." San Francisco and the East. On page 150 he states that the number of miles MR. ORTON.-I think that has very little to do of line in operation was 16,000. with it. The trouble is, that business on the What I desired to show was, the average cost Pacific Coast is now very stagnant. They are of telegraph lines. I simply took what Mr. going through a transition state, without know- Scudamore, under oath, declared that they cost ing what is the matter with them. Telegraphic in the aggregate, and divided that sum by the business should have been increased by the build- number of miles as set forth in Mr. Scudamore's ing of the Pacific Railway. statement. I am myself responsible for the arithThe fact is, the telegraph lives upon commerce. metical part of the calculation. As to the It is the nervous system of the commercial sys- matter of fact-the aggregate cost and the total ten. If you will sit down with me at my office number of miles-I am not; I take those statefor twenty minutes, I will show you what the ments from Mr. Scudamore, and he is responsible GO VERENM1ENT TELEGRBAPIS. 25 for them. I shall therefore leave him to recon- line before commencing to do business, would cile the discrepancies in his testimony before the have all the expense of superintendence and exeparliamentary committee, and the statements in cutive control, in addition to the actual cost of the letter to General Washburn, in whatever putting up the poles and wires-expenses not manner is most agreeable to himself. necessary with an already organized company. Having impeached Mr. Sauer, it is perhaps not As I have said before, I have not devoted any fair for me to cite him as authority; but we will particular attention to the subject of cost, and in at least see what he has to say about it. On the report to which reference has been made I page 140 of his book he states that the expendi- was not attempting to show the cost of constructture, computed per mile, stands as follows: ing the telegraph lines, but simply to institute Per mile of line........... $737.78 comparisons with reference to the value of our Per mile of wire........... 154.21 property-a subject upon which I have been MR. WASHBURN.-Does not Mr. Sauer state much inquired of by our stockholders. I supthat this expenditure is largely made up of pre- posed then that there was no occasion to consider liminary expenses and other matters outside of the value of our property, so far as our governthe actual cost of constructing a telegraph line? ment was concerned, for the reason that no proMR. ORToN.-I am disposed to be entirely frank position to buy the lines had at that time been witl the committee; I must say, I have had too submitted. The year preceding I had been much to do to read through a great many of this combating the scheme then pending for the conkind of books. struction of telegraph lines by the government. MR. WASHBURN.-State what the cost of con- Mn. WASHBURN.-The idea before this comstructing telegraph lines actually is? mittee is, that the government should buy existMR. ORTON.-I should as soon undertake to ing lines; consequently it is a matter of some state the cost of building houses. You might as importance for the committee and for Congress to well ask me what the houses in Washington cost. know how large an expenditure the government MR. WASHBURN.-Do you have your lines of would have to incur should it decide to carry out telegraph built by contract? that project. MR. ORTON.-No, sir. MR. ORTON.-In that connection I will say MR.) WASI-BURN.- What is the average cost that, while we have accepted the provisions of the for a line of one wire? law of 1866; and therefore are estopped from IR. ORTON.-Where we have been building making any objection to the purchase of the lines recently, the cost has been about $150 a mile. by the government-further than such criticisms That is out west. as every citizen has a right to make-we do not MR. LAWRENCE.-Out on the plains and prairies, propose to be a party to a sale of our lines upon where timber is scarce and few facilities for trans- a basis which estimates the value of our property portation? simply by so many thousand poles, and so many MR. ORTON.-No, sir: in Illinois, Iowa, etc.; tons of wire. I do not admit that the cost of our and where the railroads haul the poles for us lines or the value of our property is a proper subwithout charge. ject of investigation by this committee. WhenMn. WVASHBUBRN.-That is not according to ever Congress decides to purchase, we are entiyour former statement of the amount that had tled to select half the jury which is to decide the been expended for new lines. question of value. When that time arrives we MR. ORTON.-You will see again how an ounce shall claim that all our facilities, contracts, and of fact will sweeten a great deal of theory. Pro- franchises, as well as our poles, wire, and appabably for every mile of telegraph built by us, a ratus, shall be treated as property, and valued mile is built at the cost of the railway company. with reference to their united capacity to earn For every mile of poles put up, there are two money. The question of cost need not be raised miles of wire put up on the eisting poles. These at all. If you were goingto buy us out on the basis are advantages, and very important ones, which of so many miles of poles and of wire, would you would not be possessed by the government, should give no higher price for a line doing a large busiit enter upon the work of constructing and operat- ness, and making a heavy profit, than for aning telegraph lines. Take the insulato e other wworking at a loss, and bankruptingits now use, not the best kind, perhaps, but the owners? cheapest in the long run, and ordinary number Mr. WASHBUTRN here read a letter from Mr. eight wire, and the expense for wires and insula- Scudamore to himself, as follows: tors will be about $50 per mile. But there is a Registered No. good deal of expense that does not appear in that. In any further correspondence on this suject, A corporation starting anew and building its the above number should be quoted. 26 GOIVERNMENT TELEGRAPHS. Telegraphs. the cases in which on inquiry we turn out not to'e" TEpNERAL P TOST- TFTICTE LTNONDN ) be in fault, and though our traffic increases steaAPOST-OFFI, LONDON,1870. dily from week to week the number of complaints 19 April, 1870. does not increase. "DEAR SIR: I have to acknowledge the re- "I do not pretend that we have not yet much to ceipt of your letter of the 28th of February, and do to make our system what I mean it to be, but to express my regret that great pressure of busi- I am certain that before this year closes it will ness has prevented me from sooner replying give entire satisfaction, and that not one of the to it. expectations that I have from time to time held "The cable dispatch, which you inclosed in out will have failed to be realized. your letter, is nothing else than a series of mali- "I am, dear sir, your obedient servant, cious exaggerations, with the very slightest "FRANK IVES SCUDAMIORE. groundwork of truth in them, strung together "The Hon. C. C. WASHBURN, etc., etc., for the purpose of damnaging your scheme. I do Washington." not for one instant pretend that we have not in refer had blunders, or that we have not had delays, or r.ORTO have word say eference that the blunders and delays have not given rise tothat. It is a rule concerningthe credibility of evito complaints. But I say, without the slightest dence, that the testimony of several disinterested fear of contradiction, that these blunders and de- parties is to be received against that of one inlays were unavoidable and inseparable from a wrk so largve and so complicated as that which tensely interested even if of equal credibility. The work so large and so complicated as that which we undertook; and I say also that we have over- extracts referred to were from the leading Engcome the greater part of our difficulties, and that, lish journals of the day; I submit the opinion of though we have still room for improvement, we people of credibility, as expressed through their are even now doing the work better than it was ever done before. representative journals against that of Mr. Scu" I send you a schedule showing the number damore with not only the success of his scheme of messages forwarded by us in every week since but a baronetcy at stake. we began. You will perceive that it has risen Mr. WASHBURN.-Do you find such complaints steadily from 127,000 in the week ending 12th of the jornas o w February, to 169,000 in the week ending 9th of a N g April.* It is impossible for me to give you a more. ORTON.-I think not so generally, alstriking proof that we have the confidence of the though complaints are constantly being made. public. Telegrams would not pour in upon us, in daily increasing numbers, if we continued to transmit them tardily or inaccurately. WASHINGTON, D. C., iMay 11th, 1870. "We are now forwarding nearly thirty thousand. OnrTO appeared and resumed his statement messages per diem and the complaints which we receive daily average 35. This number includes as follows _________ At the adjournment this morning, Judge Law* The telegraph traffic in February is always less, in all rence repeated an inquiry which he put to me the northern countries, than any other month in theyear,and other day, as to my opinion concerning the authorincreases regularly every week until July. Mr. Scuda- s s s ity of the Government to establish the rates at more's statistics, therefore, which show that there was an increase in the number of messages transmitted from which our company, for instance, should be re12T,000, in the week ending February 12th, to 169,000, in quired, to perform telegraphic service through the the week ending April 9th-being an increase of 42,000 or States; and I said I would answer that question, at 33 per cent-is only what would ordinarily be expected least so f as my own opinion is concered. ow Our own statistics for the same period for messages transmitted upon lines situated relatively in the same latitude ter are to points nvolved in that uestion exhibit nearly the same results. In the eastern division First, the power of the Government; and secondly, of the Western Union Company-embracing the territory the extent to which it may be rightfully exercised. north of the Potomac and east of the -Ohio rivers-the course it is not necessary that I shall submit to number of messages transmitted in February was 279,751, and in April 369,883, showing an increase of 90,132, or 2 this committe a dissertation upon the power of the per cent, being about the same as the increase for the cor- Government of the United States, after the exresponding time in the United Kingdom. Taking the hibitions of its power, which we have witnessed number of messages transmitted in April as a guide, the during the last ten years. But it certainly will number of messages transmitted per annum in Great Britain and Ireland would be 8,788,000. which, for a popu-not be improper for me to say that we have lation of 30,000,000, would be 1 message to each 3.4 inhabi- gone already a long distance away from what was tants. The number of messages transmitted iper annum understood to be the limitations of its power by -in the States comprised in the Eastern Division of the founcers. And I think we have practically Western Union Company, taking the month of April as a guide, would be 4,438,596, which, for a population of 10,- nullified that provision of the Constitution which 000,000, would be 1 message to each 2.2 inhabitants. It declares that the powers not expressly conferred by should be borne in mind, however, that while the Eng- that instrument upon the Federal Government, lish statistics show the entire traffic of all the telegraphs have been reserved to the States. I am not critiin the United Kingdom our returns show only the busi- ness of a single company, there being no less than seven g the fct; I a merely stating hat I ecompeting companies operating lines in te same ter- lieve to be the fact, and, to a certain extent at least, ritory. I acquiesce, in the presence of what appears to G O VERANMLENT TELEGRAPHS. 27'have been an overwhelming necessity, in that re- ines to make a stipulation which would enable the Asult. And belonging, as I do, and have done since Government at some future time to acquire the its organization, to the political party which is now lines of the assenting parties to those stipulations, in the ascendancy, I may, perhaps, speak by way of without raising any such question as we are now criticism upon this subject with more freedom, and considering. with a larger toleration than would be permitted to I claim, therefore, that you have no more right a representative of the party of my friend Mr. Beck. to prescribe a rate at which we shall operate the It is my opinion that the time has come when it telegraph for the public than you have to fix the is the duty of our statesmen, our public men, to very price at which certain kinds of merchandise.carefully consider, not what the power of the Go- whether produced in the States or imported into vernment is, but how far that power may be right- the States, shall be sold; the principle on which fully exercised. I hold in my hand a copy of Put- y such right would be exercised would be the nram's Monthly Mlagazine, for the month of May, same in both cases; that it is an invasion of the 1870, which contains an article entitled, "Political private right; that it is not an exercise of any Degeneracy." I know nothing of its authorship-. function conferred upon the General Government -and there are sentiments in it not in accordance with by the States and was not originally contemplated, my own views; nevertheless, there are a few sugges- in my judgment, by the founders of the Government. -tions which seem to me to be pertinent. Here is The only private business that was contemplated one: -, to be taken in hand by the general Government "' Is there, in truth, in the whole range of philosophic discussion any question so vital and mo- t the outset was the postal servie. It is true'mentous as that which relates to the proper objects that the Government has since legislated in respect -of the political function. That question we hope to of, and has in a measure been connected with the.consider with some degree of minuteness and philo- business of banking; but only to the extent of per-.sophie precision hereafter; but at present we have only space for a few suggestions. Two points are forming that function of the Governent which, evident. First-That it cannot be an object of the by the Constitution, it was clearly authorized to State to accomplish purposes which individuals may perform. And we must of course assent to this.achieve for themselves; for in that case its interfe-, t rence woulbeimprtientnd selss. view of the case, because that was the decision in rence would be impertinent and useless. Nor, 7 secondly, can it be an object of the state to annihi- th famous United States Bank case-that when late the agency of individuals altogether, in which ever it was clear that the Constitution conferred up-.case it would be worse than despotic-it would be on the Government the right to perform a certain destructive; destructive of society, which is com-, Congress might be an Congress would posed of individuals, and destructive of itself as an agent of society. Again, consider for a moment be the judge of the process by which the function what the mysterious entity which we call the State should be performed; and that. if it chose to perform ~practically is. It is the whole force of a nation it by incorporating a national bank or national organized into an ultimate and paramount authority. banksnd erformin the function through that It dominates every individual, and its decisions in regard to him are final. What avail for an indi- agency, it had undoubtedly the right to do so. vidual to resist its decrees? It can crush him as From these remarks you will understand that I Behemoth crushes the spires of the grass. Laying distinctly deny the right of the Government to hold of the individual as soon as he is born, the State claims some sort of jurisdiction over him to require us to perform any service within the States the end of his days." at a rate of compensation to be fixed by Congress. Now, as to the power of the Government of the Telegraph companies have been created by State "United States in the premises, and if it has the laws, and are being operated under their permission. power-and a great many good people think it has There is no more authority for fixing the price of a recently been exercising it to so reform the judicial telegraph message over the lines of these companies department of the Government as to secure a pre- tan for declaring what shall be the freight by rail determined decision. upon an important public on a barrel of flour from St. Louis to New York, or -question-whenever it shall determine to enforce the price of a bushel of wheat at Chicago. My:and compel the performance, by its citizens, of a theory of our Government is that it is a protecting specific service, on terms fixed by itself, if it have power, and not, as appears to be the desire of some the will, in my judgment, it will undoubtedly find to make it, an aggressive enterprise. the way. But the telegraph to-day is a purely Mr. BEC —What did you mean to-day when you private business. The Federal Government has no said you consented to the act of 1866?,official knowledge of its exitsence except in so far Mr. ORTON-I will explain not only my stateas it has a few times conferred authority to construct ment, but give the reasons for our acceptance: lines through the territories, contributing in some It is known to you all that, during the rebellion,'small degree to that construction, and, more re- all the telegraph lines within the territory of the cently, holding out an inducement to the telegraph Confederacy were taken possession of under the 28 GOVERNMENT TELEGRAPHS. authority of the Confederate Government, and ope- created for meeting charges gainst the service, and rated by it. As fast as they came into the posses- attending the discussion of this subject; and the sion of our Government, they were operated by the five years will expire about a year hence-in 1871. War Department until about the spring of 1866, The agitation of the subject in Congress has prewhen they were turned over to their original own- vented us from deriving an important advantage ers. The lines upon the.Southern railways, with which we anticipated; but, having accepted the which arrangements had originally been made, re- provisions of that bill, we are estopped, as I have quired a good deal of reconstruction. These roads said before to-day, from objecting to the purwere in the hands, in many cases, of new parties, chase. who ignored their former relations, whether of con- Mr. LAWRENCE-You say that the National Gotract oral or written, and we were very seriously vernment ought not to interfere in your private interfered with and embarrassed. We were ordered business, so as to compel you to transmit messages to vacate the routes of some railways along which at a price to be fixed by the Government? our lines were constructed; interference was threat- Mr. ORTON —Yes, sir. ened, and it is my impression that in some cases Mr. LAWRENCE-The question whether they ought our lines were cut down. You will remember that to do so or not, as a matter of justice, is one thing; under the military laws enacted with reference to but you say further that the Government cannot the control of the Southern States after the rebel- step in and compel you to transmit messages at a lion, there was a provision, making it the duty of price to be fixed by the Government. military commanders to enforce the laws of Con- Mr. ORTON-Cannot rightfully, I say. gress. In 1866 Congress passed a bill conferring Mr. WASHBRN —That is, that it would have no upon the telegraph companies which would assent legal or constitutional right? to its terms the right to build, maintain and Mr. ORTON-Yes, sir, that is what I mean. operate telegraph lines over all the post roads in the r. L E -D you mean to say that if you United States, and everywhere across the public continue to operate your lines that Congress has no domain. The Western Union Telegraph Company domain. The Western Union Telegraph Company constitutional power to fix the rate at which you accepted the terms of this bill, the principal reasonmit messages Now, ill state the for which, was, that it would enable us at once to reasn h as tht estion. I is urged tha reason why I ask that question. It is urged that claim the protection of the military in the South- Congress ought to buy up all the telegraph lines in ern States against any interference with our lines. the country and operate them, in order to give It raised no question as to the right of Congress to cheaper telegraphic service to the peple. The give us authority to build on those railways. The q question whether that is the only mode of getting military commander was not obliged to go to Court cheaper telegraph service at once arises; because, for a determination of the constitutionality of the constitutional power to fix the if Congress has the constitutional power to fix the law. It was his duty to enforce the law of Con- transmitting messages, then the only ques price of transmitting messages, then the only quesgress; and as this law stated that we had the right gress; and as this law stated that we had the right tion remaining is whether it is expedient to exercise to be there it was his business to protect us in that Congress that power. and further, if you deny that Congress right. That was one reason The other was simply has the power to fix prices, do you mean also to this: It was clear to me at that time that this subject t say that the States have no power to fix the price which we are now considering was to be agitated States? for transmitting messages within the States? if for some time to come. No one was more conscious the States have the power, of course Congress canthan I of the great defects that then existed in the not have it as between the States; but if Congress telegraph system in the United States, but I believed'~.~ "has the power, it can exercise it not only to reduce that if we could have five years of uninterrupted your charges, but to protect you against unjust control of the business we could produce a telegraph, t t. t reduction by the States. It is a power that can be system and a service so satisfactory to the public e p used both ways-as well for your protection as to that thereafter there would be no demand from any quarter for intervention by the Government. your injury. And I expected, when we accepted the provisions Mr. ORTON —I am glad to have these points raised. of that bill, that we were to be let alone during the They are very important, and all of them have receivperiod of five years. I am glad my attention has ed from me some consideration. Possibly it may be been called to this point otherwise I might have competent for the States, when conferring privileges: forgotten it. Within less than two years thereafter upon telegraph companies, either created under their a bill was introduced proposing to construct lines own laws, or doing businessunder their permission, to by the Government; from that day to this my at- fix a limitation of charges. But it seems to me very tention has been very largely distracted from the clear that when the State has exercised its authority, work of developing the telegraph system in the and has granted that permission, that then it has United States, by the necessity which has been lost the right to fix limitations Now, there are, GOVERNMiENT TELEGRAPHS. 29 two divisions of this service to be considered Mr. WASHBURN-What do you mean by the in connection with the question which you raise:'cash value" of your property? the rights of the States concerning business done Mr. ORTON-I mean the value to be ascertained within their own territory, and the rights of precisely on the basis we were discussing-not the Federal Government in respect of that other merely the cost of so many poles and so many miles portion of the business which is done between of wire, but what this property is worth in its prethe States. Whether Congress would have any sent condition, as a means for conducting a business. more right to fix the rates for business done Mr. WASHBURN-As a means for earning money? between one State and another than it would Mr. ORTON —Yes, sir; for making fair, legitimate, have to fix the rates for business done within the reasonable profits. State which had authorized the doing of such busi- Mr. WASHBURN-That is, if it earns you profits on ness without any limitation, is a question that ad- fifty millions, and the government will guarantee mits of some discussion on both sides, and es- you ten per cent. on fifty millions you are satisfied? pecially on the side of the view which you have On that principle? originally presented, inclining towards the right of Mr. ORTON-Yes, sir; but why make your suppoCongress to interfere in the premises. But there sition so extravagant and impossible? why not come need be no difficulty about the matter at all. Cer- down to the domain of probabilities? tainly the company that I represent-and I have no Mr. WASHBURN-Call it forty millions, then, doubt the same would be true of every other com- which is about the amount of your stock; if it earns pany-would be very glad to accept the provisions ten per cent. dividends on that sum you would be of a proper law, precisely as all have accepted the satisfied if the Government would guarantee you provisions of the law of 1866, by which we should that? be estopped from raising any objection-indeed by Mr. ORTON-Let me state, in this connection, that which we shall voluntarily surrender the control of one or two years ago Mr. Hubbard, who has cerrates to the Govornment in consideration of its pro- tainly no interest in misrepresenting our side of the tection and such contributions towards the efficiency case in our favor, went into a careful ascertainment of the service as it can give without any expense. of the cash value of our property, and in his arguIn this connection, permit me to read the con- ment before the Post-office Committee of the House eluding remarks of my argument before the Senate demonstrated to his own satisfaction, by several Committee, which strike me as pertinent to this pages of statistics, that it was not worth over sixcase: teen millions of dollars. I did not discuss that sub"You desire to have the present rates for tele- ject with the Committee. I simply stated that he had graphing reduced. So do I. You do not desire to proved too much for his case. The capital of our accomplish this result at the expense of the Trea- Company is forty millions. We have tried hard to sury. Nor do 1. Yet, in order that both these may be sury. Nor do I. Yet, in order that both these may be pay for the last three years four per cent. a year on accomplished, it will be necessary to materially reduce the expenses of conducting the business. Now, it; missed it once one semi-annual dividend having it takes the profits upon about $1,000,000, equal to been passed, and another one, on the 1st of July about one-seventh of our gross receipts, to pay our coming, will be. Now, four per cent. upon forty miltaxes-Federal, State, municipal, &c.-a burden no- lions where imposed on the business under Government o ill s s eaty ten er sixcontrol. Relieve us from this, and we can make an teen illions. And I undertake to say that the stock average reduction of one-seventh of our present of no corporation in the United States can be placed rates. If you have power to give free right of at par unless every man who takes it believes sinway along railways in all the States to Mr. Hubbard's cerely that he is going to get ten per cent. from it. company, you can give it to mine. Do this, and we should be enabled to reduce another seventh with- Because you can go out all through the West, and out interfering with present profits. Then let Con- buy first-class railway mortgages, based on half the gress provide for a commission to ascertain and fix cost of the road to build through a rapidly developing the cash value of our property and franchises, on which sum we shall be entitled to earn and divide country, that will pay 12 to 14 pecent.-averaging annually to our stockholders ten per cent. We will the difference between the par value and the presthen surrender to the Post-office Department the ent price, and adding it to the current rate of interright we now possess to fix and modify tariff rates, st Therefore when you have proven that the so that as fast as the actual profits exceed ten per. e cent., the surplus may be applied to the reduction of Western Union property is not worth but sixteen rates in such manner as the Post-office Department millions of dollars we answer, that we are paying shall direct. If the rates proposed by Mr. Hubbard our stockholders only ten per cent. upon sixteen milcan ever make the business self-supporting, they lions earned, it is true, more prots than will ultimately be reached by this plan, under which all the facilities the Government can supply can be that. But what have we done with those profits? availed of to the fullest extent, but without incur- We have put them into extensions of existing lines, ring any expense or assuming any responsibility." and to increasing the facilities of pre-existing lines, 30 GOVERNMENT TELEGRAPHSS. in order that we might do the increased volume of would have been it is not easy to predict. If you business rendered necessary by the reduction of tolls, ask what would have been the result if there had in order to give us the same amount of revenue as been no competition, and we had made no exbefore. And now having expended three millions tensions, I should say that we could have divided'of dollars in construction and reconstruction-after about five per cent. upon the forty millions-posputting that amount in clean cash within three and sibly a little more..a half years upon our property-we are in receipt Mr. WASHBuRaN-What proportion of the lines of less profits than we were before. I claim, in are owned and controlled by your company in the view of such a fact, that the surplus profit above United States? that which we have divided, is not to be taken into Mr. ORTON-I should say 90 per cent., approxithe account. Is it not far better for the government mately..and the public that we assess this tax, if you so Mr. WASHBTURN-I think I understood from you please to call it, requisite to increase and provide in a remark the other day, that most of these oppoproper telegraphic facilities for the people of the sition companies are not earning money; that some United States, directly upon those interested in the of them were on their last legs, and must either go business, than to impose it upon the whole people, out of sight or be absorbed by your company. including the large majority who are not interested Mr. ORToN-There is no sort of doubt but what in it? every so-called opposition line in the United States Mr. LAWRENCE-Would you be willing that Con- is losing money-some of them more than others.,gress should pass a law saying that the Secretary of Mr. WASrBURN —And sooner or later will be the Interior should fix a rate for transmitting mes- wound up? sages at a price which would yield to your com- Mr. ORTON-AS to what the result will ultimately pany a sufficient sum to make $1,600,000 of divi- be, it is, and it is not, difficult to predict. When dends, and to keep your lines in repair, and no those companies have planted a pole by the side of greater amount? every one of ours, and have duplicated every wire Mr. ORTON-I should not be willing to make that of ours thereon, and have opened a station by the:stipulation. side of ours in every place where we have one now, Mr. LAWRENCE-That would give you ten per we are are then in precisely this situation: they have cent. more than multiplied the expense of doing the busiMr. ORTON-Yes, sir; upon Mr. Hubbard's esti- ness by two, and if we assume that they get half mate of the value of our property. of it, have divided the receipts by two. There is Mr. LAWRENCE-That is your own estimate. no business in the world that can stand that test. Mr. ORTON-N- o sir; I simply took Mr. Hubbard's Now; somebody has got to break.,estimate, and turned it against himself, to show that, Mr. WASHBURN —You have no idea that these assuming it to be true, we were giving our stock- companies are going on to multiply lines alongside holders no more than they were entitled to. of yours to the extent you name. Mr. WASHBURN-I understand you to say that Mr. ORTON-No; but they are going to add more you are earning ten per cent. on sixteen millions? to them. Mr. ORTONw-No; I said that we had tried to Mr. WASHBuRN-That is, between profitable and divide it; but we have passed one semi-annual important points? dividend, and shall probably pass another. Mr. ORTON-There is a great deal of error on Mr. WASHBuaRN-How much could you have this subject of profitable points. Unprofitable points divided, and kept your lines in repair, without ex- are just as necessary to telegraph companies as protensions? fitable points are. Mr. ORTON-The answer to that question, you Mr- DAVIS-But these opposition lines are built will see in a moment, involves several considerations. mostly between what are called profitable points? If we had not extended our lines, the effect of compe- Mr. ORTON —Yes, sir; entirely between what are tition over that portion of the territory where we so considered. have active competition would undoubtedly have Mr. WASHBURN-I inferred that these opposition hampered our operations very much more than is ap- lines must go, sooner or later, to the wall. parent, in view of the fact that we have built more Mr. ORTON-If that is true, doesn't it prove too new lines every year than the opposition has built, much? The tendency of these competing lines is We have been compensating for the loss by reduction to reduce the rates, and increase the expenses unof rates and division of business with our competi- necessarily. There is no doubt of that. But that tors, by the extension of our lines into a section of is a private loss: that does not concern the Governcountry where the opposition does not come. There- ment; and so long as the public derive the adfore, if we had not extended any, what the result vantage of the lower rate which competition gives, GOVERNfMET TELEGRAPIHS. 31 it seems to me that there is nobody to complain ex- Mr. WASAUsEuR — Whhen an opposition is started cept the unfortunate stockholders. and does not cut under your rates you do not cut Mr. WASHBURN-That is all true; but if, under theirs? eventually, this is to be the result, that you are to Mr. ORTON-NO, sir: we have never done it since absorb all the lines, and that these other lines must my connection with the business. give up as competing lines, the telegraph will be Mr. WASHBURN — But as they are pretty sure to practically in your hands; and I understand you to cut under you, in order to get business at all, you say that there is no earthly power that can interfere feel at liberty to follow up their example? with your right to charge what you please. When Mr. ORToN-Certainly. I consider that we are peryou shall control all the telegraph lines you may fectly justified in doing so. I should state, however, charge five dollars for a message to New York from in this connection, that the United States Telegraph here, as well as twenty-five cents, if it should suit Company, with which I was connected when I first you to do so. went into the business, had an understanding with the Mr. ORTON-I think you add a good deal of un- other companies-a number of them at that timenecessary emphasis to the statement I made. I do by which they would not reduce their rates; and not wish to be understood as saying that there is moreover, a year or two before my connection with no earthly power to control us; on the contrary, I the business the telegraph rates were actually addistinctly admitted that the power was there, but I vanced, by the common consent of all the parties, claimed that Congress had no right to exercise it as and there was no competition as to rates in doing things now stood. Well, sir, suppose, for the pur- business. pose of the argument, that I had made the state- Mr. WASHBURN-That was by a combination ment, in the broadest possible form, and then let me among lines occupying different territory. ask you, what of it? What power have you over Mr. ORTON-It was a combination among the lines the railway? You pay two dollars for a hard bed to since absorbed in theWestern Union Company. There sleep on from Washington to New York, in addi- was the American Company to New Orleans, and the tion to.eight dollars fare, but a competing railway Southwestern, with headquarters at Louisville; the cannot be established between these points unless Western Union Company, north of the Potomac and the authority to provide it is vested here. Now, the Ohio, to the west; and the United States Telethen, the moment the Western Union, or any graph Company, which had lines in the territories other telegraph company, should undertake to pur- occupied by both the Western Union and American sue the policy suggested by your remark, a few Companies, and was a competitor with them both, thousand dollars would build a new line between covering an extent of country rather larger than is New York and Washington, and, like the gimlet hole now covered by the opposition lines. in the hogshead, tap the business, and compel us to Now, let me speak of the question of taxes. I come to the lowest rates fixed by that little concern. hold in my hand a paper containing an extract from There is no business in the United States so secure, the tax laws of the State of Mississippi, approved so far as the public is concerned, against oppressive February, 186; and I produce this as an illustraexactions, as that of the telegraph-because it is so tion of the class of taxes we are obliged to pay. easy to provide competition against it; and that Chapter 3, sec. 1, is as follows: competition will come just as soon as unreasonable " On all telegraph companies two per cent. on profits are being earned. the gross receipts, to be collected in any county Mr. WASHBURN-Woqldn't the effect be that where an office is located." "Section 5. Be it further enacted, That all the the moment that competition was put on, that you subjects of taxation in this act mentioned shall be would put the prices down on that particular line lawfully imposed by the boards of police, in addiand crush it out? tion to the taxes imposed by this act; and said county taxes shall be collected and enforced in the Mr. ORTON-I am very much obliged to you for same manner as the State taxes are enforced and asking that question, because it gives me the oppor- collected by law." tunity to say that the Western Union Company has Under this act, Warren County, Mississippi, colnever reduced its rates upon a competitor. I ask lects 2 per cent. for county taxes, and 21 per cent. you to accept that declaration as a fact, and to give for special tax on gross receipts. The county and us all due credit for it. The Western Union Com- school tax is regulated by the board of police of pany has simply attended to its own legitimate each county. In addition to these the city of Cobusiness, but when its competitors have attacked its rinth, Miss., imposes a license tax of $25 per anrates we have not always permitted them to fix num, and many other places tax us just as heavily. them for us. When they cut the rates on us we We returned for Warren County, as for all the coundo not always accept them. But the facts are pre- ties, only the receipts for blsiness done within the cisely as I state them to you. State, claiming that was all they had a right to tax 32 GOVERNMEVT TELEGRAPHS. Some of the counties assented to our claim in that plained to you that it takes the profits of a million regard, but a majority of them refused it. Warren dollars of our gross receipts to pay our taxes-a burCounty happens to be one that took our own view, den not imposed upon the telegraph in any other counand taxed us, in 1868, upon the gross receipts in try in the world. If you have any power to remedy that county, as follows: State tax, 2 per cent., whatever abuses may exist in respect to the tele$44.74; county tax, 2 per cent., $44.74; special graph, have you not the power to relieve us from these tax, 2 per cent., $44.74; school tax, 2 per cent., unreasonable and unjust exactions? Of course I $44.74, and Probate Judge's salary tax, $5.36, do not claim that you can stop the taxation on promaking a tax of $184.32 upon receipts for business perty estimated at its true value in the State. It done within the State, of $2,237. If the taxes in would be necessary for us to take our chances, and that county had been imposed upon the gross re- prove the value of our poles and wire. And so it ceipts for business done throughout the country, as would be with you, sir, as representing the Governsome of the other counties have done, our tax in ment within the States. Unless the State shall cede that one county would have been over $1,300. property to you, and with the cession of jurisdiction I submit, Mr. Chairman, whether our turn has shall relinquish its right to tax, you are liable to not come, and whether we should not be entitled precisely the same taxation on that Federal proto be treated as having some rights which Congress perty within the States as if it was owned by a is bound to respect, and which it should compel the individual. States to respect; and I submit whether, in the face Mr. WASHBURN —You say you are taxed pretty of such facts as these-and I could go on and en- high in Ohio? large upon them, showing a license tax as high as Mr. ORTON-Yes, sir, pretty high. $1,000-whether we are not entitled to some con- Mr. LAWRENCE —Ou taxes are enormously high. sideration. Mr. WASHBURN-Who is the superintendent of Mr. WASHBURN~-Why don't you shut up your that division? offices where they act in that way? Mr. ORTON-The headquarters of the Western Mr. ORTON —Because we should read in the next division is at Chicago. General Stager is the supermorning's ITerald that a large delegation of indignant intendent. citizens of that county were on their way to Mr. Mr. WASHBURtN-He is a reliable man? Washburn's committee at Washington, to urge upon Mr. ORTON —Yes, sir, we think him so. it the necessity of the Government's taking charge of Mr. WASHBURN-I have a statement before me, the telegraph. We have submitted to a good deal which purports to declare that General Stager made of this thing for the sake of peace. a declaration, under oath, to the Commissioner of Mr. WASHBURN —I should tell them that, while Telegraphs for Ohio, of the value of lines in that I agreed with that view of the matter, before they State for 1868, which makes the value $35 a mile could talk to me they must learn to deal fairly with of wire, not including branches. the telegraph companies. Mr. ORTON-If you will reflect, you will see there Mr. BEK —These taxes were not imposed by any is nothing out of the way in that. The taxation is State legislature; they were imposed by the mem- by the State upon property estimated according to a bers of the convention held under your reconstruc- custom existing there, which has all the sanctity of tion acts, under the pretence that they had a right to law. That custom is to estimate property at what impose taxes to pay their own expenses as a Con- it could be sold for, for instance, by the sheriff. vention. That was not done by any legislature in Now then a telegraph line-and I speak from exany State. The action of that convention was per- perience, for we have been the largest dealers in fectly frightful in regard to the exactions they im- second hand telegraphs in the country-is a pretty posed and the stealages they perpetrated. poor piece of property to be sold by the sheriff. Mr. ORTON-But' you will allow me to say that Primafacie it is good for nothing as a telegraph. the State of Mississippi is no exception in this re- It becomes simply a question of how much a certain gard. South Carolina slaps on by one act five per quantity of wire would be worth to take down and cent., and we pay three per cent. into the Federal dispose of. treasury. But this illustration is valuable in another Mr. LAWRENCE-The language of the statute of point of view. It illustrates the growing tendency Ohio is "its true value in money;" and the instrucat this moment in this direction, which is reaching tions of the State Auditor, printed on the Assessor's into other States. We have a very onerous tax in returns, state that the test is, not what it would sell the State of Massachusetts, amounting to somewhere for at a forced sale when there was no demand for about $6,000 a year. Ohio has also imposed a very it, but what is its fair, honest, market value. severe tax. Mr. DAVIS-Don't they, after all, assess it at half Now, I have made this proposition: I have ex- its value? GO VERNilIENT TELEGRAPHS. 33 Mr. LAWRENCE-No, sir, I think not. they sincerely believed that the Government was Mr. DAvIS-In New York the law requires the about to take the telegraph into its management, estimate to be at the price at which the assessors would protest most earnestly against it. I, at least, estimate the property received from a solvent debtor have been so assured. in payment of a debt. The idea is the same, but Mr. WASHBURN-For what reason? the property is not assessed above one third of its Mr. ORToN-For the reason that they do not value in New York. believe (as I do not believe) that the Government Mr. ORTON-I now ask the attention of the com- can administer such a business with that efficiency, mittee to a few considerations which I desire to sub- eergy and flexibility as is essential to provide what mit, tending to show why Congress ought not to commerce demands of it. pass this or any similar bill. And I submit, Mr. WASHBuRN —But if they believed that the first, that whenever the Government undertakes to Government could manage it as well as it was provide anything for the comfort or convenience of managed by private individuals, and would reduce the people at a lower rate than private enterprise the rates very largely, they would be in favor of it; previously provided it, it cannot be justified in thus would they not? entering the domain of private business except on MIr. ORTON-Before I answer your question, affirmthese conditions: Firstly, that it is essential; sec- atively or negatively, I want to raise this point. ondly, that it is not properly provided; and thirdly, If you will select any portion of the community that it concerns the largest number of people. that is subject to a specific tax, and propose to them Does this proposition come within either of these to diminish that tax to them by imposing it upon conditions? I claim that it is not demanded by the somebody else, I have no doubt but what they would people. I do not understand that any petition has accept your suggestion. And ifitwas proposed that been presented to this House; that any organiza- the cost of telegraphing to those who pay that charge, tion of merchants or other citizens from any part of was to be materially reduced without any deteriorathe country have come here, either to allege a griev- tion in the character of the service, I apprehend there ance against the Western Union Company, to de- would be no sort of objection: I should certainly have mand redress, or to ask the intervention of the none, except so far as the broader question of the Government so as to produce a better and a cheaper policy of the Government might be considered. But service. what ground is there for claiming that the GovernMr. WASHBUTRN-There are several memorials ment can do the service any cheaper than private enfrom States here. terprise can do it? Has this Government ever done Mr. ORTO —If you will permit me to see the anything any cheaper than private enterprise would memorials I think I can undertake to expose to you have done it? Hasn't it been contemplating, of late, the little machinery that made them. I happen the surrender of some of its business, and turning to know, concerning two of them, that they were it over to private enterprise, because it would do it drawn in this city, and I know who sent them cheaper, and relieve the Government from a great to the legislatures, and what appliances put them burden? through. I do not consider that memorials which Mr. WASHBUr —What, for instance? come back here on the rebound are entitled to a Mr. ORTOT —Navy yards, &c. Take as an illusvery great deal of weight. tration the Pennsylvania State Canals. I have it Mr. WASHBURN-You do not mean to intimate from high officers of that State that those canals, that those memorials went out by any instigation or under the management of the State, cost from influence of mine? five to six hundred thousand dollars a year, and Mr. ORTON-I am exceedingly glad to have an came finally so near bankrupting their finances opportunity to more fully explain myself, and say that they sold them. In the hands of the prithat I do not mean to intimate anything of the vate parties who bought them for a song they kind; I hadn't you in my mind at all. have since been the source of considerable profit. Mr. WASHBURN-I simply want to state that I It is not necessary to multiply examples. It is not have made use of no such machinery. in the nature of things that men who are put into Mr. ORTON-If these propositions are reasonable, places by other considerations than their fitness for and entitled to consideration, then this bill ought the service that they are required to perform, and not to pass; first, for the reason that it concerns whose retention in those places may be procured by but a small portion of the people directly, and the other influences than such as relate to the energy people whom it most concerns would be the last, in and ability with which their duties are executed, my judgment, to favor its adoption. I entertain no will perform the service so satisfactorily as those doubt that the business men in the principal cities who have the stimulus of personal profit, gain and most concerned in the operation of the telegraph, if advantage. 34 GO VERNIENVT TELEGRAPHS. In this country the people have not been ac- have an interest or a sort of proprietorship in the customed to rely upon the Government to provide line in so far as it can be used for the convenience of those things for them which they are able to secure the railway, and yet all of its revenues from comby their own exertions. If this principle is right in mercial business accrue to the telegraph company. regard to one enterprise it is also in relation to all You have the right, under the law of 1866, to purothers; and if infringed upon in the case of the chase our property. How do you propose to acquire telegraph companies, what pursuit will be safe from the rights of the railway companies in that property Governmental interference? in respect of its use for their benefit: and, leaving Again: There are more people concerned in rail- aside the question of how you propose to do it, way traffic than in the telegraph. There are more when it is done, what substitute, if any, is proposed people concerned in the price of boots, shoes and to take its place? clothing, than in the price of telegraphing, and yet It strikes me, also, that the following section of the there is before the House, every session almost, bills bill before the committee is peculiarly arbitrary. tending to create and affect prices-to advance Section 11th provides: prices- "That any company, corporation or person, who Mr. WASHBURN_-Why should we not give up shall transmit, or who shall aid or be concerned in the Post-ofce to private enterprise? transmitting, any telegram or information in contravention of the terms of this act, or who shall reMr. ORTON —There are a great many reasons why ceive, collect or deliver such telegram or informayou will not do it, but you don't want to hear them. tion, shall, upon summary conviction, be liable to a Mr. WASHlBURN-Yes, I do. penalty not exceeding one hundred dollars for every Mr. ORnTN-Because no set of men, within my such offence; and where any person so offending is. a servant or person hired to do the act complained observation or knowledge, has ever voluntarily sur- of, the master or other person employing such serrendered a source of power and of advantage to vant shall be subject to a like penalty." themselves. And' this leads me to say that the That sounds very much like an extract from the' telegraph to-day is wielded in France precisely as French law upon that subject. It really sounds Napoleon wields his police, and is one of his arms of very autocratic and arbitrary. power; and it was the height of autocratic policy The passage of this bill would largely increase that prompted provision for his revenues from other the burden of taxation without contributing corressources, and the popularizing of this institution, and ponding benefits to the people. The official statisthe concealment of its uses and abuses in oppressing tics show that in Europe, during the year 1868the French people. the last year for which complete returns have been Mr. LAWRENCE-Are the express companies published-the Government telegraphs were opemanaged better in private hands than under the con- rated at a loss of over $,000,00, notwithstanding trol of the Government? the tolls received averaged as much per message as Mr. ORTON-Until recently, the express compa- those charged in the United States. Now, is it nies on the Pacific coast have been paid 25 cents reasonable to suppose that the telegraph can be each for carrying and delivering letters with the operated bythe Government in this country at one postage paid on them, because the public would not third the rates imposed in Europe, without drawing trust the mails. They have derived large revenues heavily upon the national treasury? Labor, the from carrying letters for people who were willing to principal element of expense in operating telepay them 25 cents in addition to the postage-which graphs, costs more than twice as much here, on a of course the law compels them to pay. gold basis, as in Europe. If it costs sixty-three Mr. WASHBURN-Do you mean between points cents in gold to transmit the average telegram in on the Pacific coast? Europe under the governmental system, is it within Mr. ORTON-It has existed throughout the entire the bounds of probability that you can transmit it mining region of the Pacific coast. I cannot say in this country at a uniform rate of twenty cents in to what extent it exists to-day, because my atten- currency? tion has not been called to it for a year or more. t During the past year the Western Union ComMr. DAVIs-It exists now to a great extent, even pny transmitted 8,000,000 messages, at a cost of in New York State, as regards valuable letters; be- $3,500,000. I presume it will not be seriously cause the express company is responsible for their claimed that the Government can do the work more safe delivery, and the government is not. economically than a private company; and yet the Mr. ORTON-It seems to me that the passage of receipts for 8,000,000 messages, at twenty cents per this bill would be an interference with the rights of message, the rate proposed in this bill, would only other parties than those merely who own the tele- amount to $1,600,000, or less than half the cost of graphic lines. Take, for example, the railroad com- the service, to say nothing of the interest on the panics; they have special wires in some cases, and value of the lines. i GOVERNMiENT TELEGRAPHS. 35 Much has been said about the great increase in 55 per cent., and transmitted 1,506,802 messagesthe number of messages which would ensue from a an increase of 534,408, or 54 per cent. reduction in the tolls. It is true that a material in- In Bavaria, in 1865, there were 2,921 miles of wire, crease in the traffic would result from a reduction upon which were transmitted 490,935 messages., of ninety per cent in the rates; but it must also be In 1868 there were 4,067 miles of wire-an increase borne in mind that a corresponding increase would of 1,146 miles, or 39 per cent., upon which were be required in the facilities for working off this transmitted 709,284 messages-an increase of additional business, and that a proportional increase 218,349, or 44 per cent. would ensue in the cost of operating the lines and In 1865 Prussia had 25,723 miles of wire, and of delivering the messages. Upon this point I have transmitted 1,527,455 messages. In 1868 she had. a good deal of accurate and valuable information, 48,903 miles of wire-an increase of 23,180 miles, or, obtained from the official reports of European telo- 93 per cent., and transmitted 3,544,650 messagesgraph administrations. an increase of 2,017,195, or 130 per cent. In Switzerland, during the year 1867, in anticipa- Thus it appears that in the principal countries in tion of the large increase of business by the reduc- Europe there had been an average increase of 65 tion of the tolls, great additions were made to the per cent. in the number of messages transmitted lines and wires. At the beginning of 1867 there during the past four years, and an increase of 56 were 4,098 miles of wire in operation in Switzer- per cent. in the number of miles of wire. and, and on the 1st of January, 1869, there were I submit, Mr. Chairman, that these statistics 6,488 (including 832 miles belonging to the rail- deserve the gravest consideration. If it shall appear ways), being an increase of 2,340 miles, or 57 per that every ten per cent. increase in the number of cent. in the number of miles of wire, while the messages is to require an approximate increase in total increase in the number of messages transmitted the number of miles of wire, then we shall begin to was but 63 per cent. And yet it is officially stated, comprehend what there is before us, when we in the report of the working of the Swiss lines, that undertake to provide for such an amount of traffic there was a time, during the summer of 1868, when as would be necessary to make the system self the number of messages was found to exceed the means sustaining at such rates, if indeed, it ever could be of transmission. done. In the beginning of 18651 Belgium possessed Mr. WASMBURN-To what extent are your 4,420 miles of wire, and transmitted 674,037 mes- wires now employed during the business hours of sages. In 1868 she had 8,072 miles of wire-an the day? increase of 3,652 miles, or 80 per cent., and trans Mr. ORTON-I will illustrate by a diagram. Supmitted 1,502,599 messages-an increase of 828,562, pose Ne York is represented at one end of this or 110 per cent. line (illustrating) and Washington at the other In 1865 Italy had 22,805 miles of wire and trans- No. 1 wire. mitted 1,339,721. In 1868 she had 29,326 miles of ~ - wire-an increase of 6,521 miles, or 28 per cent., I and transmitted 1,578,677 messages-an increase........... — of 238,956, or 18 per cent. No. 2 wire. In 1865 France possessed 63,591 miles of wire, The lines I have drawn between these points reand transmitted 2,473,147 messages. In 1868 she present two lines of wire, numbered 1 and 2. On had 89,086 miles of wire-an increase of 25,495 No. 1 wire there are say three intermediate stations, miles, or 39 per cent., and transmitted 3,503,185 A. B. C.; on No. 2 but one, G; rendered necessary messages-an increase of 1,029,438, or 41 per cent. for the purpose of " testing," i.e., ascertaining where,. In 1865 Sweden had 5,370 miles of wire and sent in the event of the line being interrupted, the 328,464 messages. In 1868 she had 7,560 miles of difficulty occurred, so that repair men can be sent wire-an increase of 2,181 miles, or 40 per cent., and to restore the line in the shortest possible time. transmitted 503,062 messages-an increase of Now you will see that if New York or Washing174,598 or 53 per cent. ton is communicating with any station on No. 1, In 1865 Switzerland had 3,719 miles of wire, and that wire is useless for the time being for all other transmitted 649,876 messages. In 1868 she had stations, and the operators are waiting there idle. 6,438 miles of wire-an increase of 2,719 miles, or 73 You might visit hundreds of offices and find an idle per cent., and transmitted 1,153,092 messages- operator at each; and it would occur to you that an increase of 503,216 or 76 per cent. that company had better be sending messages at In 1865 Holland had 3,517 miles of wire, and ten cents, even, than to have the operators revolving transmitted 972,394 messages. In 1868 she had on their stools, doing nothing. But if you listened 5,471 miles of wire-an increase of 1,954 miles, or you would hear the "click-click" of the instru 3-6 GO VERNMENT TELEGRAPHS. ments on their desks, showing that all the facilities 1865, while the number of messages of all kinds of those offices were being occupied elsewhere. transmitted were only increased 52 per cent. Thus it is that, through a large portion of the The comparison between the traffic of 1865 and country, hundreds of operators sit waiting their 1868, in these four countries, is as follows: Receipts turn, simply because there is not one wire from in 1865, $684,155. Expenses, $685,250: Profits, every one place to every other place. Suppose $1,095. both wires run into the same stations, and all have Receipts in 1868,. $784,901. Expenses, $1,013, an equal opportunity to use either one of those 907: Loss, $229,006. wires; so soon as the volume of business between The increase in the number of messages transthe two extremes, added to that between the inter- mitted was 52 per cent.; in the number of miles mediate stations, equals the capacity of the two of wire, 51 per cent.; in the cost of working wires during the hours when their use is demanded, the lines, 52 per cent.; and in the receipts, of it becomes necessary to put up another; and the only 14 per cent. An average reduction of 8 cents same thing occurs again and again, until the business in the tolls on each message resulting in a loss of of every intermediate point gets to be of sufficient $229,006, or 30 per cent. on the gross receipts in volume to require a separate wire of its own; and 1868, in place of a profit of $1,095 in 1865. then the operator who works that wire will be These facts prove, beyond all question, that in using it all the time, and still there will be another Europe the increase in wires and operating exoperator provided there, and another wire that he penses is very nearly proportional to the increase will have an occasional chance at. So, again, on inthe number of messages transmitted. Now it is way wires, the initial station at one end calls them claimed, and the statistics in nearly all cases subin order for business until it gets to the end. Then stantiate the claim, that a reduction in the rates for the next one takes"its turn and calls; and so on, telegraphing is followed by an increase in the numgoing around. As soon as the business gets to such er of messages offered for transmission propora point that there is too much delay in waiting for tionalto the reduction. If this result should follow that, it is necessary to put up another wire. When, th adoption of the bill now before this committee, by the increase of the number of messages between what would be the effect upon the telegraph system New York and Chicago, say, the existing wires will the United States There are now transmitted not enable us to give messages proper dispatch, it is by all the lines operated in this country, exclusive necessary to put up an additional wire. Now, a of all press and railroad messages, not less than wire put up on existing routes from New York to 10,000,000 private telegrams, at an avearge cost Chicago costs $50,000. The increase in the volume of about 60 cents. of business, at the rate charged, must be sufficient no osnlyto pa the intechrges on th inestient a This bill proposes to reduce the rate to 20 cents, not only to pay the interest on the investment and and to increase the number of ds from 25the and to increase the number of words from 25-the the cost of repairs, but for the additional operating average number now sent at the mimimum rate —to expenses. 30, an increase of 20 per cent. in the number of That the expenses of operating the lines and t te e s of o t l a words in each message. The receipts from 10,000,-offices are proportional to the amount of traffic isges, at 60 cents would be $6000000. 000 messages, at 60 cents, would be $6,000,000. shown by the official returns: In order to realize the same amount of money at In 1865 the expenses in Belgium were $189,703, and-in 1865 theexpensesina Belgium rea f $189,1, a tariff of 20 cents, it would be necessary to send andin 1868, $255,385-being an increase of $68,682 3 or 3dinlS8$5535-a pe en.30,000,000 messages, of 30 words each, equal to or 37 per cent. Iorn37 p1865r thentexp. i36,000,000 messages of the present limit, being an In 1865 the expenses in Bavaria were $114,35., In 1865 the expenses in B a were $1458, increase of 26,000,000, or 260 per cent. There are and 868195122beinganincreaseof$80 now in operation, in the United States, about 130,or 10 per cent. nor 160 per cenxt en iHolnwe4. 9 000 miles of telegraph wire employed in transmitTn 1865 the expenses in Holland were $249,643, nIn 1868 $eingan ire, o ting 10,000,000 messages. Assuming that the wires and in 1868, $351,579-being an increase of'are now fully occupied, if you increase the business $101,936, or 42 per cent. 260 per cent., an increase of 260 per cent. will be In 1865 the expenses in Switzerland were $131,- required in the number of miles of line and wire, 546, and in 1868, $211,821-being an increase of or an addition of 338,000 miles of wire, making a $80,215, or 61 per cent. total of 468,000 miles. That this estimate is a Thus, the returns show that in Belgium, Bavaria, reasonable one is demonstrable. In Continental Holland and Switzerland (the most densely popu- Europe, 18,000,000 messages are transmitted upon lated and the most favorably situated for cheaply 300,000 miles of wire-being an average of 60 performing a large telegraphic service ofany countries messages per mile. In the U. S., 10,000,000 in the world), the expenses for operating the lines, messages are sent upon 130,000 miles of wirein 1868 were 52 per cent. more than they were in I being an average of 77 messages per mile. In Con GOVERIVNIENT TELEGRAPHS. 37 tinental Europe, however, there is no press service MR. ORTON-About 40 to the mile, and in some like ours, nor such use of the telegraph by rail- cases running as high as 50 and 60 to the mile. roads, the railroad companies having lines of their We have seen that the average cost in Europe is own. Our wires actually perform, therefore, three over $300 per mile. If we estimate the expense times as much service as the European. here-where materials and labor cost more than MB. WASHBun~-How many miles of wire are twice as much as in Europe-at $400 per mile, we there in the United Kingdom-Great Britain and shall certainly not be deemed extravagant. 195,000 Ireland? D. miles of line, at $400 per mile, gives us $78,000,000 R. OTO-Abt one hundred'thousan as the expense which would be required to put up MR. OnTON-About one hundred thousand, I.. the additional line necessary to transmit the inthink. According to the statistics obtained from creased traffic under this bill. the European reports, if the number of messages in te E n r, if te It should be borne in mind that every mile of Europe were increased from 18,000,000 to 36,000 - Europe were i d from 18,00,00 to 36,00, wire that is put up in this country costs nearly dou000, an addition of 300 000 miles of wire would be s n E a,~~~,^~~~~~~,. \ble what it does in Europe; and, notwithstanding required, making a total of 600,000 miles; because n, TO~ ij ~ ~ ~I, ~~ i'timber is alleged to be so scarce in Europe, poles I claim to have proved substantially that during the can be purchased and delivered, on the average last four years the percentage of increase of wire t four ys t pce o incr o wie after being treated with reference to increasing their has been approximately the same as the increase in r i r th nmbr f esd T - ^Coliu- ~durability min the ground, cheaper than the average the number of messages transmitted. In Continen- poles cost us in the United States without such tal Europe, however, the minimum message is 20 treatment. words, counting date, address and signature, while The cost of prepared poles in Belgium is shown this bill makes the minimum 30; therefore, 36,000,- by th following extract from the report of the 000 messages sent under this bill would be equal Engineer of the Belgian Telegraphs: to 54,000,000 European messages, and would re- The results of the preparation of 1865 are as quire for transmission, according to European sta- follows tistics, 900,000 miles of wire. I think you will__ admit that if I allow only 468,000 miles of wire for No. of the Price of Cost of PrePoles. the Wood. paration. Total net Cost, the transmission of as many messages in the United_ _ States-in addition to the immense amount of press 3 3.2 $105 4 ess 3.73.32 $ 1.05 matter and railroad business-as can be sent over.88.37 1.25 900,000 miles of European telegraphs, I am not 7 1.40.74 2.14 making an extravagant estimate of the extensions 8 1.90.90 2.70 which will be necessary if this bill is adopted. Several foreign contractors have offered to the Let us now consider the probable cost of construct- administration prepared poles at an advantageous ing this additional amount of line. There are now price. A public auction occurred in 1866 of a lot in operation in the United Statesabout 75,000 miles of 3,400 spruce poles, injected with sulphate of of line, or 130,000 miles of wire. An increase of copper, and with the bark taken off delivered at 260 per cent. would require the construction of the station of Mons. The dimensions of these poles 195,000 additional miles of line, making a total of differed from those of the poles furnished at Lierre. 270,000 miles of poles and wire. The cost of build- We give below an abstract, with the price of the ing a telegraph line depends, like that of any other different samples: structure, upon the value of the materials and labor No. of Length Circumference, Approximate employed in its construction-costing from $150 for Poles. in ft. 6 ft. from bottom. size, cubic ft. Price. a single wire line to as high as $2,000 per mile for 2 20 18 inches. 3.955 $1.34 lines like those we have constructed during the last 3 20 15 4.48 1.40 6 20 24, 7.75 1.40 few years in the city of Chicago and the approaches 7 25 24 8.57 1.78 9 I 30 27 9.97 2.40 thereto. MR. WASHBURN — How did they happen to cost Another reason why the European lines cost less so much? than ours is because they use a smaller sized wire, MR. ORTON-There are poles costing from $7 to as a general rule. As a proof of this I submit the $15 apiece, and it takes a small army of men to following statement from the Annales du Genie Civil, handle them. We have been rebuilding those lines Paris, 1869: at an average cost of $2,000 a mile. " The conductors put in service within two years are composed of iron wires, of Nos. 6 and 8 gauge, MR. LAWRENCE-YOU use wooden posts? ungalvanized. The wire of No. 8 gauge is employed Mn. ORTON. Yes, sir; cedar-some pine, 55 feet upon the lines of the interior service, and the wire long in some cases. of No. 6 gauge is used upon the international lines. All the lines established along the railroads are cornMR. WASHBURN — About 30 to the mile? posed of galvanized iron wire, of No. 11 gauge." o 38 GOVERNIVENT TELEGRAPHS. No. 6 wire weighs 538 lbs. to the mile. 1st Assistant Auditor......... 480 00 per annum, " 8 " " 389 " " 2d " "....... 360 00" I" " 9 " " 323 " " 4 Inspectors.......$540 00 to 720 00 "'L "11 " " 211 " " Managers of Offices..360 00 to 600 00 " " Now, while we have some No. 6 wire in use, and Operators, 1st class...........480 00 " a large amount of No. 8, we have never employed " 2d "......... 420 00 any iron wire for telegraph conductors smaller than " 3d "..........360 00 No. 9. " I4th "......... 320 00 " Mr. WASHBURN-DO you mean to say that the PORTUGAL. lines of the Western Union Company cost anything ctor-General1,500 00 per annum Director-General...........$1,500 00 per annumJ like $400 a mile? I? Inspector................ 1,100 00 " " Mr. ORTON-I do not mean to say that, because spe r...00 00 Superintendents.......... 500 00 I do not know, and it would be impossible to ascer- 4500 Office Managers, lst class... 450 00 " tain with precision. A new telegraph line may be 2 2d 360 00 " aptly compared with a new house, which serves a 3000 Operators, 1st class.........300 useful purpose for the time being, but which re- " 2d......... 0 " " 2d "......... 240 00 quires continual outlays for additions, repairs and 3d i.200 00 " furniture. The original cost of some lines has been " 4th ". 150 00 " doubled in five years by such additions. " 5th..... 15 00 " Now, let us see what will be the annual expense Repairers, class. 10000 " Line Repairers,!st class..... 100 00 " " of operating the lines provided the Government per- 2d ". 00 " forms the service as economically as private companies; because it is of no sort of account what ITALY. your lines cost if you cannot do the business for Chief Inspector...........$1,200 00 per annum. the receipts. 10,000,000 telegrams are now sent at Sub-Inspector......... 800 00 " an expense of $4,000,000, or 40 cents apiece, there- Directors of 1st class....... 1,100 00 " " fore 36,000,000 telegrams would cost $14,400,000, " 2d "....... 900 00 " " or $8,400,000 more than the tolls received. But Chiefs of Section of 1st class 600 00 is it probable that under Governmental control the " " 2d " 560 00 " service could be done as economically as under Operators, 1st class......... 440 00 " private management? It is generally believed that " 2d "........ 400 00 work done by Government employds is more ex- " 3d "........ 360 00 pensive than that performed by private enterprise. " 4th "........ 300 00 In Europe we have seen that it costs upon an aver- " 5th "........ 240 00 " age 63 cents for the transmission of every despatch,BAVARIA while the salaries paid to the operators is less than The average compensation per year is as follows: one half as much as similar employds receive here. The following are official statements of the sala- For the assistants-First three years.... $172.00 ries paid to the officers and employes of the tele- " " After " ".... 189,00 graph service in several European countries: " " " six ".... 236,00 FRANCE. " " " twelve years.. 268,00 General Superintendents...... $2,400 per annum. " Telegraphists —First three ". 193,00 Division " 1st class 2,000 " " After ".. 236,00 " I 2d " 1,800 i' "' " " six ".. 300,00 Managers of offices, Ist class.... 560 " " " " twelve ".. 364,00 " " " 2d ".... 520" " " Chief " -First six..38600 Liu irs si "Fr.. 429386,00 Principal Clerks............... 500 II rincipal Clerks............ 500 " " " After " ".. 429,00 Operators, 1st class............. 480 twelve " "2,00 " 2d ".......,.... 420 " " " " " " eighteen".. 514,00 3" d "............ 360 " " At stations where the traffic is not large enough 4th "......... 320 " to warrant the employment of a special telegraph 5^ th "........... 280 "' operator, the duties of the latter are performed by SWITZERLAND. officers in charge of the railroad or post-office. In Superintendent...............$900 00 per annum. remuneration for this service they receive a com1st Secretary................ 600 00 " mission of 25 per cent. on the receipts for a single 2nd "............... 500 00 " " message of 20 words, throughout the kingdom, for Auditor................. 600 00 "' each internal despatch sent, and international sent GO VERLTNMIET TELEGRAPHES. 39 and received. The present tariff is 20 cents. The breakdown compared with which the failure in rate of the premium is 5 cents, irrespective of dis- England might be regarded as a great success. tance and number of words. The rates between all the great commercial cities, Mr. WASHBURX_ — Do you assume that there where the chief business is done, is already very would be no saving by occupying the telegraph low, as the following table will show: offices in conjunction with the post-offices, and by employing postmasters? r TO Distance in Tariff'rio I Principal Cities in Air Lines. in T. S. Mr. ORTON —Not a particle. Take, for instance, __ United States. MILES. Cur. the city of New York. In order to accommodate New York..Albany............... 133 $0 40 Baltimore........... 200 35 the volume of telegraphic business that is even now.. Boston.......... 5 30 done there, it would be necessary for you to move il. 7len a3,',~ 70 120 done there, ".. ~~Buffalo................ 300 50 out of the post-office there, give it all to us, build.. Chicago.............. 750 1 00 "..Dubuque.............. 880 1 20 another post-office just like it, give that to us also, Indianapolis........... 650 60'.Cincinnapti.......600 60 and then look out for yourselves. We occupy more ".Cicinat i. 1,00 1 50 than twice the space that the post-office occupies in ".Louisville............ 700 75 1" Milwaukee............. 750 1 10 order to handle the present volume of business., Philadelphia........... 90 25 But when you come to enlarge that business 260 " Nrovidence............ 155 00 - Nashville.............. 800 1 00 per cent, it involves an expenditure which I do not ".. Memphis.........,... 1,000 1 25 wish to contemplate, at the present rate of rents in.Wheel D ng............. 00 0 Hreeings.4........... 4 75 30 the city of New York. That is a view of the case " Sa arrisburg............ 175 25 "..San Francisco.......... 2,675 5 00 that has not evidently been taken into the account. St. Louis.............. 900 1 50 Rochester.............. 270 50 Mr. Hubbard comes here and savs that Postmaster " tsburg.............. 0 25 Burt, of Boston, says the business could be squeezed Detroit............. 500 1 00'".. Washington............ 230 40 into a chamber of the post-office there; but it simply. Cleveland........ 420 00 Toledo.............. 500 1 00 cannot be done; and if it cannot be done on the New Haven...'....... 0 00 present volume of business, what are we to do when Hartford............... 100 20 "I Troy............. 140 40 you have taken our 200 wires, leading into one ". 1 Charleston............ 700 1 85 " New Ohrleans......... 1,200 2 50 building in the city of New York, and increased w Orland.......... 1,200 2 50 Portland............... 290 50 them 260 per cent., and increased our 100 operators " Richmond............ 330 1 05 M. obile................. 1,130 2 50 260 per cent. more? You can see something of'.. Savannah.............. 780 2 20 the expense that would be involved. This service, Galveston... 1,530 4 00 it should be borne in mind, is the labor of indi- 26,813 viduals. The minute you reach the limit of capacity of one operator and wire, you must add another of No you will say that applies mainly to points each; and that is why these results are so sur- where we have competition. A moment' reflection will show that every time we reduce between points prising. I had no conception, three years ago, when points p I C) where there is competition there begins to operate I commenced the investigation of this subject, that where there is competition there begins to operate I c c e s o tat once the necessity for lateral reductions. Those I was going to develop such results, and was still at once te necesi o l reductions. Those reductions are going on all the while. We have a more surprised when, by the investigation of our o are o o the e e hae a own statistics, we found we were travelling very bureau devoted to the management of the tariff'muc in the? same direction, and it is a part of my duty every week to revise much in the same direction. consider and examine the reports from that bureau, As the number of words to be sent for the mini- as to reductions made necessary between points mum rate under this bill is 50 per cent. more than where there is no competition, in order to enable us that allowed in Europe, we should, in order to in- to harmonize rates between intermediate points stitute a fair comparison, add this to the cost, but where there is competition. And this process of reassuming that the number of words is the same, the duction is going on all the while. I have probably cost of transmitting 36,000,000 messages would be, reduced a hundred tariffs since I was here last according to the European standard, $22,680,000, week. It is a matter that attracts no attention and thus showing a loss of 16,000,000 in operating the receives no announcement. But the tendency of lines, to say nothing of the interest on the cost of our proceedings has been, I am free to say, in some the lines. respects, to reduce rates more rapidly than we can But the loss on the service, great as it would be, afford. is nothing in comparison with the m damae Butwe are normous damaget here to complain that e are doing that would ensue to the commerce of the country it. We only claim that so long as this process is by the utter breakdown in the entire telegraphic going on, and the public is deriving the benefit, and system of this continent were this bill to pass-a is not making complaint, that there is no provoca 40 GO VERNJENT TELEGRAPHS. tion, and, I may be permitted to say, no justification would be like answering the question, " How fast for interference by the Government. can a horse run?" it depends upon such a variety of In order to increase the number of messages in conditions. One operator will transmit more than proportion to the reduction in the rates, under the another; and it also depends upon the character of proposed Government system, the additional traffic, the messages. Here is a message that has 15 or the greater part of it, must be conducted between or 20 free words, and here is another that has distant points, since the rates between contiguous only five. How many words to a message do you localities, where the bulk of the business is done, mean? are already approximately as low as those proposed MR. WASHBURN-I mean ordinary messages of in this bill. 10 words. Take the rates between the cities along the Atlan- MR. ORTON-I think the best answer I could tic coast; they are now very low, approximating to make to that question is to say that we find that in the rates proposed by this bill. But it is not serving the continuous press reports, they run along between these contiguous places along the Atlantic for an hour, and sometimes two hours without stopcoast that the increase of business is to come from ping-and that would be probably the best illustrareduction. There is very little increase in the tion of what could be got out of the operators if business of the City of Washington made by any they were kept up to work all the while. Now reductions. Its business with New York is but while we have furnished data showing that one very slightly increased by our offer to send a mes- operator in the United States has received 2,700 sage -to New York at night for 20 cents, exactly words in an hour and written them out —another the rates proposed by this bill. You can now send one, of course, transmitting it-the average (and a message from here to New York for 20 cents, de- we call it a very good average, too), on these press liverable to-morrow morning, yet there is very little reports is 1,000 words an hour, where they work of that business done. Why? Because a letter right along without interruption. will do as well or better, and costs but three cents MR. LAWRENCE-Then probably an operator could Mr. WASHBURN-What do you think would be not send over 60 or 70 separate messages an hour. the effect of reducing the rates one half during I R. ORTON-Nothing like so many as that, as a business hours-that is, to 20 cents? general rule; thirty would be considered an excelMr. ORTON-There would be a considerable in- lent average. crease in the number of messages by-and-by —per- M. BEC~-I should like to get this question exhaps, in the course of a year, an increase of a hun- plained. You spoke of the immense number of dred per cent. in the number of messages; but we wires that would be required to transmit the busishould increase our expenses also. And if such a ness across the continent —from here to San Franreduction rendered it necessary for us to put up cisco —under Mr. Washburn's low tarif the charge more wires between here and New York we should being five dollars a message now, and that you lose largely, even if we doubled the business, since have two wires. You can tell, I suppose, with we should increase both our capital and expenses, great accuracy, how many messages you receive without any compensating increase of profits. daily now, on the average, from San Francisco? The tariff betweeen New York and San Francisco Ma. OTON —I can tell how many messages are is now $5, while under this bill it would be but 20 received at any one point; but, going back to my cents. Now, if the increase of the number of mes- illustration, let me say, that while New York may sages is proportional to the reduction in the tolls, be handling its business with San Francisco, all statwenty-five messages would be sent at 20 cents tions between those points and west of the Missiswhere one is now sent at $5; and as the facilities sippi, where there are but two wires to San Franfor transmission must be proportional to the number cisco, and between one or two hundred stations, of messages to be transmitted, it would require would be idle, except in so far as they could be twenty-five times as many wires to send them upon. accommodated with the other wire. There are now two wires in operation all the way IMR. BEC —-But from Omaha to San Francisco, across the continent, and a portion of the way three. where the two wires begin, you receive, perhaps, If this bill passes, and the anticipated increase in not over fifty messages a day? the traffic should follow, it would require at least Mr. ORTON-I cannot answer that question here, 50 wires to do the business. but I can give you the information hereafter. MR. WASHBURN-How many messages can be Mr. BECK-In other words, if 20 messages could sent on an average over a single wire? be sent an hour from San Francisco to Omaha, or MR. ORTON-As to the number ot messages that anywhere along those two wires: those wires are could be sent in an hour, to simply answer that not worked up to within one tenth of their capacity question, without bringing in collateral matter, it at present? GOVERNr2IENT TELEGGRAPES. 41 Mr. ORTON-I will undertake to say that they are The estimated number of messages which such a worked up to 75 per cent. of their capacity. line is capable of transmitting per annum is obtained Mr. BEK —At five dollars a message? as follows; We have a statement, prepared with Mr. ORToN-Oh, no. I have alluded incidentally much care, two years ago, showing the number of to two classes of service, that I have not supposed words sent and received per day on each wire from you would take the time to consider and dissect, and to New York, from January 4th to January yet I must allude to them in this connection. We 10th, 1868. The total number of words sent during transmit 2,500 words a day to San Francisco, for the six days is then divided by six, to get the the California State Press. We transmit on these average per day. We then divide this amount by same wires press matter to Denver, Colorado, to thirty, the average number of words in the minimum Salt Lake City, and up to Helena City, on the line message, according to this bill, and this amount going towards Fort Benton, thus occupying one of again by the number of wires actually employed. the two wires a portion of the time; a portion of it The number so found we multiply by two-for the goes during business hours and a portion goes in two California wires-and this sum by 313-the the night time. Again, we transmit a large number number of working days per year. No better result of messages that we do not take into the account at than this could reasonably be expected, as I assume, all, for railroad companies, in return for rights of in this estimate, that two wires will work through way-a service that is costing us, even though pay- to California with as good an average result as we able in telegraphing, considerably more than it ought work the short lines centering at New York, which, to cost, and is becoming quite a tax on us. of course, could not practically be done. Mr. BECK-The idea I was pursuing was the im- Assuming, according to the European data, that mense number of wires that would be required. the rate of increase in the expenses is proportional Mr. ORTON__If you will wait a moment I will to the rate of increase in the number of messages, come to a demonstration, made from actual data on the result, under the Government rate of 20 cents that subject. To cover that point I have prepared between New York and California, would be as the following statement, showing the annual loss follows: that would result from operating two wires between If the reduction in the rates increased the New York and San Francisco, at the rate of 20 cts. business twofold, the annual loss per message of 30 words: would be......................... $700,000 Interest on cost of 3,500 miles of line, @ $500 per If the increase was fourfold, the annual mile, $1,750,000, @ 10 per cent..... 175,000 losswoldbe..................... 1,400,000 Cost of maintenance............500 If the increase was sixfold, the annual BaCost of maintery nance............. 87.5002,, Operators and clerks.............. em A 65,0)000 If the increase was twelve fold, the anOperators and clerks.............. 65,000~ Rent............................ 12 nual loss would be............... 4,200000 Rentloss would e..........12,000 4,200000 Messengers............. 3,500 If the increase was twenty-five fold, the ~Stationery.......8,000 annual loss would be............. 8,750,000 Stationery........................,81000 Light and fuel................... 3,500 But the mere loss of $20,000,000 or $30,000,000 Office furniture and repairs......... 2,300 per year.is an insignificant item when compared to State taxes...................... 5,000 the injury that would result from the great increase in the business beyond the capacity of the lines. Total expenditure...... $372,300 Take the California lines, for example. Suppose Receipts on 111,428 messages, @ 20 that on the 24th day of July, 1871. the rates were cents......2..................... 22,285 reduced to twenty cents between the Atlantic and Loss.v........................... $350,015 Pacific States, and that instead of 400 messages per day, 10,000 messages were offered for transmnission, These are pro r'ata estimates, derived from our what would be the result? An entire cessation of expenditure account for last year, and believed to all electric commerce between the two sections, and be below, rather than above, the actual cost of a general state of telegraph anarchy. This is no operating such a line. mere speculation, but is precisely what would happen A thousand miles of that line across the plains if the traffic increased in proportion to the reduction cost a fabulous sum. We paid five dollars a pole, in the tolls. in gold, to the Central Pacific Railway Company, In this connection, let me say that that was the simply for transportation. Our bills for transporta- difficulty in the way of the success of the system tion by the Union and Central Pacific Railway, under Mr. Scudamore's management. Before he within two years, have probably amounted to made any reduction in rates-and he has not made $100,000. much on the average, because the rates between 42 GO VERNVJIENT TELEGRAPHIfS. the principal cities where the business was done having large cities situated thousands of miles apart, was only about a shilling before-he should have closely linked together by the most intimate cornseen that his lines were in proper order, and made mercial and social interests, it will not answer to provision on the trunk lines for the additional busi- adopt a rate of tolls which cannot meet the current ness to be brought upon them by the lateral lines expenses of the system in a little country like which he extended to the small villages and com- Belgium, whose chief cities are but thirty miles munities. Every thousand miles of line that we apart. develop in Missouri and Kansas, and down in the On the first of November, 1869, France reduced Indian Territory, require an increase of facilities the tolls on inland messages, that is to say, on mesbetween St. Louis, Chicago and New York, because sages passing between stations within her own tera percentage of the business which is developed in ritory, from 40 to 20 cents, but retained the old rate that locality flows forward on the trunk lines, and upon international messages, those coming from or that must be kept steadily in view. For instance, going to other countries. we have lines running from New York to Albany, Mr. WASHBuRN —-Vhat was the effect of that Utica, Auburn, and along to Rochester, and so on to Buffalo. But the wires for Chicago and San reduction on inland messages? Francisco must be operated alongside of these, and Mr. ORTON-A considerable increase on inland yet must be free from the accumulation of any of business, I believe. But the telegraph business in this local business. So that whenever the business France was done during the year 1868, at a loss of of the Pacific Coast increases so as to require an over half a million of dollars. Now it has reduced additional wire to transmit it to the Missouri River, its tariff on inland messages 50 per cent., there must it becomes necessary to put up an additional wire be an increase in that class of business of 100 per from the Missouri River to New York. cent., without any corresponding increase of expendThe result that would ensue between the Atlantic itures, in order to leave them with only a loss of and Pacific States would occur upon all other routes half a million per annum for the present year. in the country. The messages offered for trans- I have before me the official tariff published in mission would be from ten to fifty times more than Paris in 1870, from which I have copied the rates the wires could carry. In a great country like the now in force between stations in France and other United States, extending over a vast continent, and countries in Europe, by the cheapest routes: Table showing the Tarif for a message of 20 words, counting date, address and signature from France to other countries in Europe. Tolls in Tolls in DISTANCE,. F other TOTA. France. Countries..From France to Prussia......................... Territories join.................... $.40 $.80 " ".Englandl.........O.,,.....30 miles..............4... 40.80 1.20 " Austria and Hungary........... 150." s.................... 0.60 1.20;' " Baden.......................... Territories join...................40.20.60 {' " "[ Bavaria...................... ".................. 40 20.6. " "Belgium...................... ".40.20.60 " " " Denmark....................00 miles..........................60.0 1:30 " " Spain.......................... Territories join.....................40.40.80 " "Italy......................................40.40.80';' " Greece............. 1,000 miles..............................60.40 2.00.I " Hohenzollern........... 30 "......................... 40.20.60 c " Luxemburg................... Territorites join..0..........40.10.50 " "Norway........................ 900 miles............................60 10 1. 70 "' "Holland......0 0.............................40 ortugal....................... 350...........................40.60 1.00 " Russia........................ 700 "...........................60 1.50 2.10 " " Sweden............ 800 ".............................0.60 1.00 1.60 " " Switzerland..................... Territories join.....................40.20.60 " " Turkey......................... 600 miles...........................60 1.40 2.00.." " Wurtemberg............. 30 "......................40.20.60 The tariff from Paris to London is 80 cents, the from 40 to 60 cents, as her portion, upon all mesamount being ecqually divided between the French sages which go to or come from any other country. and English lines. In case of the adoption of this bill, however, the Thus we see that, while France has made a cheap United States has no neighboring countries upon rate for telegrams which originate and terminate whom to impose an extra tax to help to make up within her own territory, she imposes a tariff of for the deficiency in her interior service. GO VERNMENT TELEGR APHS. 43 In Bavaria, the receipts from 1850 to 1869 were In no country in Europe have the rates for tele$1,564,318, and the expenses were $1,798,018-the graphing been reduced at once upon the whole expenses exceeding the receipts $233,700. volume of business more than 30 per cent., and yet The number of messages transmitted, including this bill reduces the rates 90 per cent. upon all inland, international, sent and received, and transit, classes of traffic. were 4,815,136, making the average tolls per mes- In France, Belgium, Holland, and Switzerland sage 33 cents. the tolls have been reduced upon one class of mesBavaria has an area of 29,637 square miles- sages-the inland-50 per cent., the rates upon inabout half the size of New York-and contains a ternational and transit being unchanged. population of 4,824,421 inhabitants. In England, in 1866, the average tolls upon all In Switzerland, the receipts up to 1869 were classes of messages were 43 cents. When the lines $1,544,664, and the expenses $1,724,497-the ex- were assumed by the government the rates were repenses exceeding the receipts $179,833. duced upon inland messages to 24 cents for a mesThe number of messages transmitted, including sage of 20 words, but the charge for extra words inland, transit and international, both sent and re- will probably bring the average upon this class of ceived, was 6,510,074, making the average tolls per messages to 30 cents, while the rates upon internamessage 23 cents. tional and transit messages remain unchanged. Switzerland has an area of 15,261 square miles- When the lines were under private control the rates about one third as large as New York-and contains between London and Manchester, Birmingham, Livera population of 2,510,000. pool, Cambridge and other large towns were only 24 Belgium received up to 1869 $1,994,603. cents, and between stations in the city of London The number of messages transmitted, of all kinds, only 12 cents, so that while they remain unchanged was 9,417,113, making the average tolls 22 cents. under government control between the great comBelgium has an area of 11,400 square miles- mercial cities, they have been actually increased about one quarter as large as new York-and con- one hundred per cent. in the metropolis. The entains a population of 4,961,644. tire area of England, Scotland and Ireland is only In Holland, the receipts from 1852 to 1869 were 113,500 square miles, while the area of California $2,218,021, and the expenses $2,935,488, showing alone is 189,000 square miles, and that of the a loss of $717,467. United States 3,480,000 and yet this bill proposes The number of messages transmitted, of all kinds, to make the price of a message in this country four was 8,985,096, making the average tolls 24 cents. cents less than in England, so that the rate of Holland has an area of 2,146 square miles-about charges established by the British Government npon the size of Delaware-and has a population of the lowest class of messages in those little islands 3,628,468 inhabitants. would be 20 per cent. higher than the rate for the In 1868 Bavaria received $151,679, and expended transmission of despatches of all classes throughout $195,122. Belgium received $239,420, and ex- the length and breadth of this vast territory. pended $258,385. Holland received $209,566, and I believe it would prove a great misfortune to expended $351,579. Switzerland received $170,- the people of this country if the telegraph were 848, and expended $211,821. Austria and Hun- taklen from private hands, where it has been mangary received $1,390,195 and expended $1,966,396. aged with such unparalleled success, and placed Denmark received $10,314, and expended $126,346. under the control of inexperienced governmental France received $2,013,63, and expended $2,583,- officials; but if the representatives of the people 580. Greece received $39,359, and expended think otherwise, I trust they will examine the $47,983. North Germany received $1,682,895, and matter thoroughly, and adopt such precautionary expended $1,936,867. Spain received $315,022, measures as will insureits success. and expended $681,987. The Western Union Telegraph Company alone The losses were as follows for 1868: In Austria and Hungary...........6 201 possesses more miles of telegraph line than is con" ~Belgium~. 33,885 ~tained in the whole of North Germany, Baden, "Ba ia. Bavar.................. 3,4ia, Wurtemberg, Austria, Belgium, Den"Denmark....................... 56,032 mark, Spain, Hungary, Italy, Norway, Holland, " rance......................... 569,817 Portugal and Switzerland; and yet, enormous as "Greece........................ 8,624 is our extent of line-as these comparisons show~' Holland........................ 142,013 they would be totally inadequate to meet the " North Germany............... 253,92 wants of the country if the rates are reduced as -6 Spail...........3........... 372,965 provided for in the bill now under consideration. 56 Switzerland..................... 40,972 If the Government takes the telegraph into its Total loss................. $2,097,924 hands, and desires to make it a success, it must 44 GO VERNMENT TELEGRAPHS. do one of two things: Either reduce the rates Mr. ORTON-I have no data on that point as to gradually, and provide additional wires and em- what extent it is used for domestic purposes. ployes as the traffic increases, or, if the rates pro- Mr. WASHBURN-I think the data is some 60 posed in this bill are to be inaugurated at the per cent. in Belgium and Switzerland on family outset, build 200,000 miles of additional line, and matters. have them in readiness for operation when the Go- Mr. ORTON-I have seen some guesses of that vernment tariff goes into effect. In either case, kind, but do not place anyreliance on them. But. however, provision should be made for an outlay if our people desired to use the telegraph for social of at least $50,000,000 beyond the amount to be purposes, why do they not take advantage of the paid for the lines now existing, and for an annual opportunity we offer them of sending their mesdeficit of not less than $10,000,000 per year in sages long distances, where it will take two or operating them. three days at least togo by mail, at one half rates I have no doubt that the Government of Great during the night I Britain will ultimately overcome all the difficul- Mr. WASHBURN-They don't understand it. ties under which they now labor in the working generally. of their telegraphs, but these difficulties should Mr. ORTON-I have circulated nearly a million never have occurred. Under private control the advertisements of the fact that we send a message British telegraph system was the best and the at half rates during the night, deliverable the next cheapest in Europe. It had been in successful morning, by inclosing them in the envelopes of operation for over a quarter of a century, and messages delivered-continuing that distribution fully met the requirements of the English people. until I supposed every person who, in the course In taking possession of so complete a system, the of a month, had occasion to receive a telegraphic Government should have exercised great caution message, would know it; and have hung cards in in making changes likely to interfere with its use- conspicuous positions in every telegraph station fulness. They ought, above all, to have foreseen in the United States, and had the fact noticed, I that a reduction of 25 or 30 per cent. in the rates think, in nearly every journal of the United States. upon messages and the opening of a large number There are other items that have not come into of new offices would necessitate the increase of the account at all. There is no fair comparison the facilities for transmission in proportion to the between the postal service and the telegraph serprobable increase in the volume of business. Their vice in this: we provide all the stationery. A failure to make such provision has proved thus customer comes to our counter and writes his letfar a serious misfortune to the people of England, ter on our paper; we have to make a copy of that and should be a warning to us. on our paper at the other end, put it in an envelope and deliver it. It is quite an item. Five Mr. WASHBURN-Does not Mr. Scudamore pro- hundred reams per month, of a single kind of paper, mise, or hold out the encouragement that he will is consumed to make the forms on hich essages is consumed to make the forms on which messages be able to reduce one half of his present rates re written. Mr. ORTON-I do not know what Mr. Scudamore has said on that particular point. It would have But suppose what was urged, when this discusbut little weight with me. Mr. Scudamore has sion commenced two years ago, was true-that his knowledge of the telegraph business yet to ac-the average message in Europe, Great Britain quire. Whether he will be able to make a demon- included, was sent for half the price of a message stration that shall be opposed in toto to the expe-in the nited statesdoes that fact of itself prove rience of every other European Government anything as to the necessity of Governmental inremains to be seen. terference in this business? Has anybody in control of the Government, from its organization I should be perfectly astounded at the results don to to the present time, dared, during sch shown by the Continental lines were it not for the control, to inaugurate and carry ot a policy that fact (which is directly in the face of the assertions pu the price of labor in the United States upon of Mr. Hubbard), that the telegraph is vastly more a par with labor in Europe Isn't the whole used by the people of the United States to-day foundation of the claim of protection to American than by any other people in the world; and for industry, in respect of which there is an almost the very reason that it is not required by a domes- enire unanimity of opinion-except as to the detic people for domestic uses, and is required by a gee of protection-based upon the allegation that commercial people for business purposes, and es- the labor of Europe is so cheap, in every departpecially so over the large distances of a country ment of industry, that it is unfair to subject the like the United States. free American laborer to its competition? And, in Mr. WASHBURN-Isn't it very largely used for addition to 3,000 miles of ocean, and 10 to 30 days domestic purposes in Europe now? difference of time, freight, insurance, interest, GO VERNMENT TELEGRAPIHS. 4 premium on gold, we create an additional ocean as Congress is concerned, is to be repealed. But 3,000 to 6,000 more miles, by the imposition of I ask you to go further, and to prohibit the taxaduties, solely for the purpose of creating a price tion of our receipts by the States, because I expect that will enable the laborer in this country to re- that the announcement of that fact will furnish a ceive two, three or four times the wages paid pretext, under the precedents which have been there, and yet enable the producer here to sell his furnished in the last two years for increasing these product at a profit. I say it would not have sur- exactions in the States, until we shall derive no prised me at all had the investigation proved that real benefit. I not only give the pledge, but I am telegraphing was done in Europe at half the prices prepared to have the pledge put into the bill, charged in the United States. I am only surprised as a condition of availing ourselves of it, that at the exhibit that has been made. I have before concessions corresponding in value shall be stated, I think, that of the cost of this service made to the public in the rates of telegraphing there was paid for labor more than fifty per cent. within ayear from the making of such concessions. The current expenses for carrying on the telegraph Is not the proposition I read a few minutes ago, in the United States to-day-of the $4,000,000 that I made before the Senate Committee, a reawhich are expended, we will say, by all the com- sonable one? Are we unreasonable in asking 10 panies in carrying on the business-more than per cent. profits onthe cash value of our property $2,000,000 are paid as the wages of labor. If we If we cannot make any dividends at all there is. could be provided with operators at the rates paid something radically wrong. Now you will say for such service in Europe, I would undertake to that competition is unncessarily increasing experform this stipulation: to render a better service penses. I grant it. But still, if the public canat half the average rates now existing in Europe. not be served in this country under competition I entertain no doubt of my ability to accomplish as favorably as it can be served in any other way that result. I want to give you a little illustration then it seems to me it is not worth while for the in support of my claim that the telegraph service Government to try it. is better done in the United States than in Europe, Mr. WAsSHBURNu -If the Government would because the contrary has been held. I think guarantee you 10 per cent. on the cash value of the chairman advanced that idea in his speech. I your lines, and take the risk of loss, would you read that speech in Paris, the first days in January. undertake to send messages at a uniform rate I remember very well discussing it with a gentle- throughout the country for twenty cents? man one evening after dinner, when he called my r. ORTON-Yes, sir. That is substantially the attention to this fact: that the French Cable Com-proposition I make. pany was at that moment engaged in laying aing to ta M-r. WAs hBTRN~-Woul d you be willing to takecable across the English Channel, from Falmouth t v o you s in t to ake to,4.t a ct of ~, in o r ti the value of your stock in the stock market as a to Brest, at a cost of ~40,000, in order that basis so much of the business of the French cable as originated in England might be relieved from the MR ORTON.-I would not. The quotations of disgraceful and demoralizing influence of the the stock market seldom give the true value of the French telegraphic administration. It was des- property of any corporation. The present price of troying their business. They could not stand its our stock in the market is about 33-the par value blunders and delays. being 100. I hold a little, however, for which I If I have not succeeded in reaching and convin- paid, more than three years ago, 58. Since that time cing your judgment as thoroughly as mine is con- we have expended, in enlarging and improving our' vinced, as to the accuracy of the statements I have property, more than three millions of dollars in made, I trust at least I have accomplished this- cash, taken from current earnings. Intrinsically, that I have shown you that there is much to be therefore, our property is worth three millions more taken into the account on the side of the telegraph when its stock is selling at 33 than when it sold at. companies when complaints concerning their ser- 58. It is probable that, had we divided the three vice are being made; and, also, that before it is millions among our stockholders the price of the. fair and equitable to insist that in order to improve stock would be much higher to-day than it is, althis service, as well as to cheapen it, the Govern- though it would be actually worth considerably less, ment must intervene, that it is right we should ask You will see by this illustration how unjust it to be put more nearly upon an equality with the would be to ask our stockholders, a majority of telegraphs existing in those countries that have whom have paid very much more for their stock been brought forward in contrast with our own in than it will now bring in the market, to abandon all that regard. I ask that you shall relieve us from expectation of ever getting their investment returntaxation. I may say here that the Committee on ed in full, as well as all hope of any future profit. Ways and Means have assured me that the tax on I have partially considered all the points to the gross receipts of telegraph companies, so far which I desired to invite your attention when this 46 GO VERIMlIENT TELEGRAPIIS. discussion began, except in regard to the bill of of Mr. Hubbard and two others, named first in Mr. Hubbard. I do not like to speak of that in connection with himself in the list of corporators, his absence; but I shall not say anything in his have the right to issue the first million of dollars absence that I have not already said in his pres- of the stock of the company, and there is nowhere ence; moreover, the report is here, which he may in the bill any requirement that there shall be any see; and if your patience is not already exhausted equivalent for that stock rendered, either by lines I will take a few minutes in which to refer to Mr. purchased or lines constructed. That is the bonus Hubbard's proposition. for what is called out West the "promoters." If the Government cannot do the business at That is to pay the expenses of getting the charter. -the rates proposed by Mr. Washburn without Of course, I am not speaking of this as anything loss, how can Mr. Hubbard do it? He may improper. Itis proper, I suppose, for every man reply that his rates are higher than those pro- to take all that Congress will give him when they posed by Mr. Washburn-w-hich is true with know what they are doing. If Congress is disreference to long distances. n'ow, I undertake to posed to pass a bill of that kind, I should be per-,say that it is of no consequence to the projectors eetly willing to stand up here and say I would of that scheme whether it succeeds or not. There give and pay into the Sinking Fund for the payis enough in it for success to them, and they can ment of the National Debt, $250,000, or, perhaps,.abundantly afford to let it fail. It is within your $500,000, for such privileges. knowledge, Mr. Chairman, that telegraph stock is Yet I am opposed to its passage. And I must not sought for very eagerly in any part of the assume that the gentlemen who reported in favor country. The mania which ran through the suc- of it do not understand what they are doing. But,cessive stages of silver and gold mining corpora- if they do understand it-if you propose to give a tions, and petroleum corporations, came down to few gentlemen an opportunity to put a million of telegraph companies a few years ago, and appar- dollars in their pockets by a direct appropriation ently has spent its force. No responsible man un- of stock-I can show you in a moment the butt dertakes to-day to go openly into any community end of another million of dollars in legitimate and ask subscriptions of responsible parties to the profit-I am ready to negotiate for such a franstock of a new telegraph company. Any one con- chise as that, openly, on broad and liberal terms. templating a movement of that kind, therefore, is I have said that this bill in fact appropriates the under the necessity of finding something where- first million of stock to these three parties, because with to varnish it over to cover up its defects, or it authorizes them to issue it without any requireimprove its brilliancy and attractiveness to the ment that they shall show an equivalent. Next, public. The varnish in this case the Government it authorizes the issuing of stock to the amount of is asked to supply-first, with an act of incorpo- $250 per mile of wire purchased or constructed. ration. But Mr. Hubbard can go into the State I think he can get control of a line of telegraph of Massachusetts, or New York, or any one of on which a million of dollars in cash has been the thirty-seven States, and get his act of incorpo- sunk in the last five years, for less than $150,000 ration as readily as I can. We never think of at the present time. opposing the granting of any such charter of Mr. WASHBURN-How long a line. incorporation by any State. There is no difficulty Mr. ORTON-From Boston to Washington-four.about it. There are charters for sale, and some wires. That line is bonded for about $100,000, have been offered to me recently for nothing. and there are two years' arrears of interest on He would then start precisely the same as every those bonds. A holder came recently and wanted other telegraph company has started before. That, to sell some of them to me-said I could go in and however, would be an ordinary "opposition" bankrupt that company, and get control of its line, and he knows there would be no sale lines, and all that. I said we were not doing that for such a stock; but if he can hold out to kind of business; we were not willing to take a the public the advantages of his connection with little piece out of this opposition until we took the Government, whereby the Government is the whole. In the first place we didn't want it, to defray all the expenses, and he is to have and in the second place the parties were not ready all the receipts, it may not be difficult to in- to sell at rates we would be willing to pay. duce the subscription of a sufficient amount of But, I take it that all these opposition lines capital. If the scheme is good for anything would be very glad to come into Mr. Hubbard's at all, it will certainly be good for the first two or scheme. Tow, if he could buy up a portion of three millions of its stock. I have not the bill be- them for $50 to $100 a mile, and then stock them fore me, but if you will refer to it upon this sug- in at $250 a mile of wire, as he may lawfully gestion, you will see that I am correct, when I and honorably do, why the balance, of course, he,say that under that bill three parties, consisting is accountable for to nobody. If, therefore, he GOVERNMYiENT TELEGRAPHS. 47 could buy for $250,000 what wolcl represent when the benefit of a few speculators, and do no good stocked in on that basis, a million, there is the either to the public or shareholders in the existing first two million dollars of his capital absorbed lines. It seems to me it is not worth while to go without having provided a mile of additional tele- any further; that I have presented considerations graph line in the United States beyond what enough: first, that it is a scheme for the aggrannow exists, and without having extinguished a dizement of its promoters; secondly, that instead mile of competition. Now, at that very point these of relieving the public from whatever abuses and men can afford to retire, and go into some other errors and faults which exist to-day, it would leave business. It would be of no consequence to them all the occasions for them to rest precisely as bewhether the scheme succeeded any further or not. fore, with this added disadvantage-that they A few gentlemen who divide a million and three would be absolutely incurable. quarters could manage to live in this country Mr. WASHBURN I understand that if either very comfortably on the proceeds of it, invested of these bills should pass, you would prefer the in United States securities, even at four per cent. Government should have the entire control to this There are no guarantees of any kind whatever, partnership arrangement? ~either to the stockholders or to the Govern-.Mr. ORTOT —If I spoke simply from selfish and ment, and if the bill should pass, the Western i f speculative motives, I should say that I had rather Union Company would stand in the position of ir b n -wom ld st o in bei r Mr. Hubbard's bill would pass; because, with my'either being compelled to come in behind Mr.. r and h o oe i e n -. opportunities and experience, I can see where I ~Hubbard and his associates —who never owned a, Xbadaahi thewoldd never oad a could make a good deal of money for myself. rod of telegraphi the world, and never had any-, rT'od of tele.graph in te But standing here as a citizen claiming a litthing to do with the telegraph business unless it fie patriotism, I say unhesitatingly to the Govwas sending or receiving a message-the option ent, make your contributions in the way of ernment, make your contributions in the way of either to come in with our large property,, protection and immunity from taxation and aninterests and business behind him, and put them'intts and e th noyances open and free to all companies, or take into this pool, and exchange our stock for theirs,. the whole business to yoursef and control it. In,or continue a competition with them after they Le my jllcigment there is no middle ground. Leave have become snugly ensconced inside of the Post-.. officesandunder. it either to private competition, with such protecoffices and under the wings of the Government. I tion as you can give in exchange for the right to submit whether it is fair and just for the Governexercise a certain control of the companies (they ment to do anything of the sort. A S we sh d et to would certainly concede the right for you to conAgain: Suppose we should elect to go in and get control of the stock-as we could have the trol their tariffs), or else acquire the property by get control of the stock-as we could have the. control e so s o r aetf fair, legitimate ascertainment of its value, and control, since we own 80 or 90 per cent. of' ontrl,..since we own or 90percent. of then take the business entirely in your handsthe property-and turn these parties out; it is one or the other. simply then the Western Union Company right over again. If the Western Union Company is iMr. LAWRENCE-If you take the sum of money such a tyrant and monster, with a competi- divided to your stockholders in dividends for the tion existing over a large portion of the terri- last three years. and add to it the money invested tory, what would it be with that competition ex- in new lines and improvements on old ones, not tinguished, and under the protection of the Gov- including mere repairs, what would be the perernment, and in partnership with it? Why, Mr. centum of the gross sum on a capital of forty Chairman, there has never been a monopoly con- millions? ceived so absolute in respect of any business as Mr. ORTON-About six per cent. Probably a that monopoly would be inevitably under the little less. In conclusion, I desire to thank the operation of that bill if the scheme succeeded at committee for the patient and apparently inall. If it didn't succeed, it would only inure to terested attention they have accorded to me. GO VERNIMENT TELEGRAPHS. 49 APPENDIX. A REVIEW OF Mr. SAUER'S TELEGRAPH STATISTICS. By GEORGE B. PRESCOTT. Hon. C. C. Washburn, in a speech on thle and are quite curious, statistically considered, Postal Telegraph bill delivered in the House of for asserting in one place what they contradict Representatives December 22d, 1869, says, "I in another. have been greatly indebted to George Saner,.M. SAUER'S STATISTICS. Esq., an American gentleman residing in Paris, and formerly United States Consul at Brussels, Page 174 contains the following table, purportand more recently one of the promlters of the ing to show the number of miles of telegraph French Atlantic Cable, for many of my facts in wire in operation in Europe, together with the regard to European telegraphy." Mr. Hubbard, cost of constructing them: another advocate of postal telegraphy, acknowledges his indebtedness for European statistics Sennt, oin te F e of es old Costof Coato the same source, while to Mr. Sauer is also Miles. Expenditure, due the credit of furnishing much of the ma- France................... 0, 330 $4,781 103 terial for the speech of Hon. E. B. Washburne BeIiuma.;..............4....199 Switzerland............... 4,612 414,188 on the "Union of the Telegraph and Postal Prussia.................. 45,272 2,418,540 Bavaria................... 4,729 361,374 Systems," delivered in the House of Represen- Baden.........343 200000 tatives in 1868. Thus it appears that Mr. Wrtemberg............. 2,020 150000 Other German States...... 2,000 150,000 Sauer's statistics have been the foundation, or Sweden.................... 7,328 1,151,101 Norway.................. 3,160 660,954 tap root, of all the postal telegraph schemes Denmark..................,32 530,000 which have been started in this country for the Russia....................44,83 5,200,000 Italy..................2.. 26,832 3,000,000 past three years. As the statements relating to Netherlands............... 4,280 695,138 Great Britain............. 85,000 13,000,000 telegraph matters of all three of the gentlemen Austria................... 32000 00000 who have derived their information from Mr. Portugal................ 3,137 500,000 Spain..................... 15,623 1,600,000 Sauer have been almost invariably incorrect, we Turkey................... 26,558 3,000,000 have taken some pains to obtain Mr. Sauer's PaplStates..; 000 1600,000 compilation, for the purpose of instituting a ta.......... Total...............394,793 $41,003,397 comparison between his statistics and those con- Average cost per mile of wire, $103.86. tained in the official reports. We have now before us the work in question, entitled, According to the above table, the cost per mile of line-poles and wire-would be about $300. "THE TELEGRAPH IN EUROPE. As Mr. Sauer, however, acknowledges in his PY pamphlet that he has no information whatever in regard to the expense incurred in the construcGEORGE SAUER. tion of lines in Baden, Wiirtemberg, Austria,.Paris, 1869 Denmark, Russia, Italy, Portugal, Spain, Turkey, Parns, 1869, Greece, Hungary, or the Papal States, but simPrinted for P'ivate Circucltion." ply The first 25 pages of the book are devoted to GUESSES AT THEIR COST, a history of " The Rise and Progress of the and, in some cases, even as to their extent of line, Telegraph," which, if not entirely correct, or we do not think the table referred to can be reparticularly novel, is at least quite harmless. garded as altogether reliable and authentic. The succeeding 135 pages contain brief notes on Besides, we submit that it is not good guessing the telegraph in various European countries, which estimates the cost per mile of wire in Tur 50 GO VERNMENT TELEGRAPHS. key-where there are two thirds as many miles GENERAL INACCURACY. of line as of wire-at $112; while in the. Nether- With a few exceptions, there is scarcely even lands, where there is only one mile of line to four an aproximation to accuracy in any of the figof wire, the official reports show that each mile ures given by Mr. Saner in the above table,. of wire costs $140. Neither does it seem fair to and they have apparently been thrown together estimate the cost per mile of wire in Austria at in the most careless manner. $62, while the official reports show that it ave$62, while the official reports show that it ae- The returns for France, Sweden, and Denmark raged $157 in Sweden. ragced $~157 in Sweden. include the international messages both sent and Page 176 contains a statement of the Pag 17Totisasaeetoh received, the latter also appearing in the reports of AMOUNT OF BUSINESS DONE the countries in which they originated as sent, thus upon the telegraph wires in Europe during the counting theym twice. year 1868, which we reproduce below, together The returns for Belgium, Holland, Spain, and with a correct account of the same, obtained from Switzerland include the international messages authentic sources: both sent and received, as well as the transit, the Steatneent, sowizng the Traffic and Revenue of Telegralphs latter being neither sent nor received in these in Europe. countries, but simply permitted to pass through,-According to —-, — According to ——, them on their way to and from neighboring 1fr. Sauer. Official Reports. Number of Gross Number of Gross states. Countries. Messages. Rec'pts. Messages. Rec'pts. France....... 3,503,182 $1,876,611 3,209,958 $2,013,763 The returns for Bavaria, Baden, and WiirtemBelgium..... 1,502,599 239,420 1,292,599 339,420 Switzerland.. 1,153,092 170,848 939,499 0 T848 berg are strangely erroneous. The lowest rate Prussia...... 3,544650 1,335,000 *4,304,600 1,682,895 for the transmission of inland messages in BaBavaria....... 678,374 151,678 278,795 151,679 Baden........ 430,564 60,981 209,325 60,981 variais25 cents, and in Wiirtemberg, 14 cents, Wurtemberg. 506,986 55,127. 220,462 55,127 whle theinternational and transit are g r Sweden...... 503,062 191,281 409,916 193,304 er Norway...... 350,000 70,00 0, and yet, if we divide the amount of money receivDenmark..... 348,690 70,314 264,001 70,314 Russia........ 1,600,000 2,200.000 746,006 2,280,341 ed by the number of messages reported by Mr. Italy.......... 2,320,271 912,025 1,578,677 911,607 Netyh 2,320er l 9ands.12,02 1,548,6787 911,607 Sauer to have been sent, we should find the aveNetherlands.. 1,496,544 199,087 1,047,823 335,791 Spain......... 550,000 600,000 472,604 315,022 rage tolls in the former country 22 cents, and Portugal...... 350,000 300,000 Austrla... 3,000,000 1,000,000 2,594,852 1,390,195 in the latter 10 cents. GreatBritain. 6,000,000 1,600,000 Turkey.... 1,200,000 474,390 WHICR IS RIGHT Greece........ 300,000 39,359 71,509 39,359W IS RGH Total....9,338,014 $11,596,121 17,640,626 0,010,646ates that 2,320,271 essages Average tariff per message, according to Mr. Saner, 39 were transmitted in Italy during the year 1868, cents.. Average tariff per message, according to official report, exclusive of government messages, the number 56 cents. I of which is excessively large." The expenditures for telegraphic service in the The official report, on the contrary, states that above countries in 1868 were $11,093,424, making only 1,578,677 private and 191,744 government the actual cost per message 63 cents. messages were transmitted in that country durNo returns of the telegraphic traffic in 1868 ing the year; so that if the latter were included have been received from England, Norway, or in the returns the number would still be half a Portugal, and only partial returns from Turkey million less than Mr. Sauer's figures. the receipts in that country being $711,930, and On page 145 Mr. Sauer says, "We have the expenditures $832,775. Thus, according to the official reports, there O INFORIMATION was an regarding the number of messages worked off EXCESS OF EXPENDITURES annually" in Turkey; and yet in the general for telegraph service over the receipts for mes- sumary he puts the number down in ound sages in thirty-two countries in Europe, for the nlubers at 1,200,000. year 1868, of $2,066,042, and an excess of receipts G T BITAIN. for messages over the expenditures in five other countries of $662,419, showing a total loss upon the detailed table for Great Britain and the whole service of $1,403,623. Ireland, Mr. Saner states that he has no returns ~~ ~ ____~____.____ __ for 1868; and yet, in the summary, the number * These figures represent the traffic of North Germany, of messages transmitted is set down at 6,000,000, and include Prussia, Anhalt, Bremen, Brunswick, Hamburg, Hesse, Lippe, Lubeck, Mecklemburgh-Schwerin, and the receipts at 1,6.00,000, making the cost Mecklembrg - Strelitz, Oldenburg, Lauenburg, Reuss, per essae twenty-six cents. A moment's reSaxony, Saxe-Altenburg, Saxe-Coburg and Go[tha, SaxebMeiningen, Saxe-Weimar-Eisenach, Schaumburg-Lippe, flection, however,'would have shown Mr. Sauer Schwarzburr - tRudolstadt, Schwarzburg - Sondershansen and Waldeck. that in this case he had GO VERNMENT TELEGRAPHS. 5I OVERSHOT THE MARK; SWEDEN. for if messages were sent in Great Britain in In the detailed report, he gives the receipts 1868, when the lines were under private ma- in Sweden as $193,304, and in the summary nagement, for 24 cents each upon an average, $191,281. the tolls since they have come under government NORWAY. control must increase the cost, as the lowest rate In the detailed report, Mr. Sauer gives the numnow is 24 cents, and the charges for extra ber of messages transmitted in Norway in 1867words will bring the average up to at least 30 the last year for which he has any returns-at cents. No returns of the telegraphic traffic in 309,604, and the receipts at $111,135, while in that country for 1868 have been received; but the the summary he puts the number of messages at receipts for 1866, the last year of which any sta- 350,000, and the receipts at $120,000. tistics have been published, amounted to nearly PRUSSIA. $3,000,000, which would make the average cost per message about twice as much as stated by In the detailed report for Prussia, he gives the Mr. Saner. receipts in 1867-the last year for which he has GREECE.. any returns-at $1,188,934, and the number of' On page 157 Mr. Sauer says, " The number of messages transmitted 3,093,949, while in the sum — messages transmitted in Greece during the twelve mary the receipts are set down at $1,335,000, and months ending 31st December, 1868, is stated to e number of messages transmitted 3,54,650. have been 77,441," while in the general sum_ AUSTRIA. mary he puts them down at 300,000, thus reduc- Mr. Sauer's detailed statement shows that no ing the apparent cost per message from 50 cents returns have been received by him from Austria, to 13 cents. and that the figures contained in his general DENMARK. table, which refer to that country, are purelyIn the detailed table for Denmark, the receipts conjectural. for messages are stated in one place as $61,485, WS T 1,, EWHAT TIE TRIES TO PROVE. and in another as $70,314. The effect of Mr. Sauer's singularly erroneous SPAIN. table is to show that messages were apparently In the detailed table for Spain, Mr. Sauer gives Europe atan average rate of 39 transmitted in Europe at an average rate of 39 the receipts for messages at 1,689,258 pesetas, or cents while te oicial returns prove that the $270,281.28, and in the summary at $600,000. 70,281.8, and in the summary at $600,000. tolls actually averaged 56 cents, and the cost of PORTUGAL. transmission 63 cents. In the detailed table for Portugal, the number GOVERNMENT TELEGRAPHY. of messages transmitted in 1867-the last year for W X We do not propose to enter into any extended which he has any returns-are given at 134,454, ch he has any returns-are given at 134,45 criticism of Mr. Sauer's arguments in favor of and the receipts at $90,941, while in the summaryal telegraphy, but we can not avoid. governmental telegraphy, but we can not avoid he puts the number of messages down at 350,000, showing the inconsistency of his assertion that and the receipts at $300,000. and the receipts at $300,000. the telegraph in France is more extended and FRANCE. more generally employed than in England, when, In the detailed table, Mr. Saner gives the re- according to his own table, 29,000,000 people in ceipts in France for 1868 at $2,017,364, and in the the latter country possess 85,000 miles of telegeneral summary at $1,876,611. graph wire, and send annually 6,000,000 messages, while 38,000,000 in France possess only R. SAUERS INGENUITY. 70,330 miles of wire, and send but 3,500,000 mesIn the detailed statement, Mr. Sauer puts the sages. When we add, further, that, according to receipts in Switzerland for 1868 at $184,236, and Mr. Sauer's table, the average cost per message. in the summary at $170,848. In the one case, by in England was 26 cents, and in France 53, the. reducing the camount of the receipts, the apparent UTTER _T'NCONSISTE"Cv average cost of each message is lessened, and in the other, by increasing them, an apparent profit is of his deductions will be still more apparent. shown in conducting the business. THE PROOF UNSATISFACTORY. RUSSIA. Mr. Sauer says, " The steady and continuous' In the detailed table, Mr. Sauer gives the re- progress in France as regards the extension of ceipts in Russia in 1867-the last year for which wires and the augmentation in the number. of he has any returns-at $1,967,115, and in the stations, has always been made without regard summary at $2,200,000. to the numerical population of small towns or $52 GO VERIVMEVT TELEGRAPHS. villages. The French government undertake If the work of the office renders assistance these extensions without reference to whether necessary, the administration provides what is the working expenses would be met, or whether, called an auxiliary clerk, and a female is usually in absence of all probability of obtaining a suffi- chosen to fill this post. These items appear in.ciency of public business, a loss would be in- the accounts of the administration under the curred in creating new lines or opening addi- ordinary headings of receipts and expenditures. tional stations." But the superiority of France The extensive premises occupied by the head. in regard to the number of telegraph offices quarters of the Telegraph Administration at maintained does not seem to be established by Paris belong to the Department of the Minister Mr. Sauer's own table, which claims only 1700 of the Interior, and as the telegraph service is a stations for the whole empire, while the United branch of this department, they have no rent to States, with a less number of inhabitants, has pay for them. Their annual rental value, at a three times as many. moderate estimate, is not less than $30,000. LIMITATION OF GOVERNMIENT SUPPORT. Notwithstanding all these economical advantages, however, the telegraph service was conNeither does his rose-colored account of the, ducted in 1868 at a loss of $569,817, the tolls liberality of the French government in building charged being nearly twice the average rates lines and opening offices seem to be sustained by r.ilr dis s i te Ui z "for similar distances in the United States. the highest authority; for M. Pinard, the Minister of the Interior, to which department the tele- the st of November, 1869, the tolls upon graph belongs, in a communication to General internal messages were reduced to 20 cents to Dix, dated Paris, January 7th, 1868, says: any part of France-a reduction of 50 per cent. Din dathe Parincialtn of d, w — 10 cents being charged between towns in the " In the principal towns of departments, where -the service answers the political and commerlcial sme department. exigencies of the general public, the government'bears all the expenses of the establishment and Althoug it would be possible to send a mesworking of lines, sage a distance of six hundred miles within the "In the principal points in the Arrondisse- limits of the country, yet there are very few ments, where the service answers the needs of messages which are sent even one half as far the government and those of the immediate lo- te average distance that dispatches are trans-,calities as well, the lines are established by the e h nd.government and worked under its direction, but tted France being less than one ndred thie offices are ful'nished by the local authorities. miles. "In the chief towns of the Cantons, however, Thus, the average rate per mile in France is -where the telegraph serves almost exclusively ill for inland messages, while a higher rate the local interests, the people of the villages con-, e tribute, on the one hand, to the construction of the i crged upon interntional-the tariff from lines, and, on the other, to their woorking." Paris to London being 80 cents. In the United The arrangements with local communities in States, the average rate upon all classes of dis-.France are carried out thus: In cases where patches-except night messages-is 1 9-10 mills rsmall towns or villages want telegraphic corn- wh:smnall towns or villages want telegraphic com- per mile, and the tariff upon the latter class is munication to be established, and there is not but one half of these rates. sufficient work to cover expenses, the adminis- Although the present rates in France are tration charges the municipality $40 per mile for higher per mile than in the United States, and constructing a new line, and $20 per mile if only a private company could manage the business a new wire is to be added to poles already in use. profitably at the tolls imposed, we have no doubt The town provides the office rent, furniture, and that under government control the deficiency the clerk, the latter having generally some other for the present year will largely exceed that of employment, such as schoolmaster or town clerk. 1868. The administration furnishes the apparatus and appurtenances, and allows to each office a certain THE OBJECT OF MR. SAUER'S BOOK. sum on every message sent or received. These The apparent object of Mr. Sauer's book is to,commissions are as follows: prove the great superiority of the government To municipal offices: over the private control of the telegraph; and while we should regret to be compelled to bePrivate forwarded messages........... 3 cents lieve that, in order to do this, he would purposely Private received messages............ 2 cents misrepresent the facts, yet it is difficult to comDelivery to receiver.................. 2 cents prehend how he could accidentally fall into so To offices worked by auxiliary agents: many errors, the tendencies of which are all in Private messages forwarded and received, 2 cents that direction.