“£& is the most successful man who has the best information 
 
 ENDYMION. 
 
 LIBRARY 
 
 UNIVERSITY OF ILLINOIS 
 
 A Talk on 
 
 Telegraphic Topics. 
 
 
 A Bid for Business. 
 
 i 
 
 New- York / 
 
 Printed by Francis Hart & Company, 
 
 £>3 & 63 Murray Street . 
 

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 ! 
 
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LIBRARY ! 
 
 OF THE . 
 
 UNIVERSITY OF ILLINOIS 
 
 A Talk 
 
 Telegraphic 
 
 
 “ The best way to come to Truth being to examine things as they really are f 
 and not to conclude they are , as we fancy of ourselves , or have 
 been taught by others to imagine — locke. 
 
 on 
 
 Topics. 
 
 
 New - York : 
 
 Printed by Francis Hart dr Company , 
 6j & 65 Murray Street. 
 
^ 6 \J A>i'i U)^ 
 
 PREFACE. 
 
 UPHE first question the reader will ask himself is: “What motive prompted 
 I the preparation of this pamphlet ? What object had the person in view who 
 „ prepared it, and why is it sent to me ? ” 
 
 This pointed query requires a candid answer, not alone in fairness to the 
 reader, but in order that all suspicion and misconception as to the design and 
 aim of these pages may at once be done away with. 
 
 The motive, then, which inspires this pamphlet is the hope of gain — the 
 same motive which prompts nine-tenths of all the actions in this wide world. 
 Thus, this pamphlet is simply, as the title-page indicates, “ a Bid for Business ” ; 
 and the expectation is, that should it induce business, money will be made in the 
 shape of commissions, on the purchase and sales of such securities, as are essen- 
 tial to those having means at their disposal. 
 
 The New- York Stock Exchange is the center of transactions in stocks, 
 bonds, and such like securities for the entire United States. Hence, there is 
 concentrated there a volume of business which better illustrates the general 
 . condition than can be found at any other point. Not long ago the transactions 
 '> averaged 500,000 shares per day, which at par would equal fifty millions of dol- 
 lars. Within the past few weeks, however, there have been days when the sales 
 did not reach 100,000 shares, equal only to ten millions of par. The commissions 
 earned by the 1,100 members of the Stock Exchange therefore, declined from 
 an average of $113 per day, each, to $22.70 each, the latter sum being hardly 
 sufficient to pay one-quarter of their daily living expenses, office-rent, large 
 staff of clerks, etc. This shows an enormous decline and indicates an almost 
 total cessation of investment demand, the transactions being almost exclusively 
 confined to those of a speculative character. 
 
 In view of this decline, with immense expenses going on, is it any wonder 
 that an effort should be made to create a demand for the investment stocks 
 dealt in by the members of the Exchange ? 
 
 
 It is an incontrovertible fact that there are millions and millions of dollars in 
 the country seeking investment. Any safe, permanent, and profitable securities 
 that will yield six per cent., with any prospect of improvement therein as the 
 country improves, ought to be in demand. 
 
 Taking into account the vast number of persons throughout the country who 
 have money to invest, the proportion who make purchases on the Stock Ex- 
 change of stocks, bonds, and other securities is extremely small. A recent 
 estimate shows that while there are a hundred thousand persons seeking invest- 
 ments, less than ten thousand make purchases of this character. 
 
 If the merits of desirable and profitable securities can be brought to the 
 attention of investors seeking employment for their money, business may thus 
 
 cii) / 4 
 
4 
 
 A Talk on Telegraphic Topics. 
 
 be induced. The desire to acquire and profit by that business is the raison 
 d'etre of this pamphlet. 
 
 To this end, it is necessary to select a stock possessing all the attractions of 
 safety, permanency, and potentiality of profit, having prospective growth com- 
 mensurate with the progress of the country itself ; a stock which is in a sense 
 universal in its character, unaffected by local circumstances, selling cheap, and 
 yet available in quantities large enough, to make worth while the effort to 
 obtain customers for it. 
 
 In looking over the long list of securities offered for investment none seemed 
 to fill all these requirements so completely as the stock of the Western Union 
 Telegraph Company. 
 
 That this company has in sixteen years paid in dividends over Thirty Millions 
 of dollars in cash was the main fact which influenced the selection of its stock as 
 an attractive one for the purpose in view. Another reason for its selection was 
 that there is no name more familiar throughout the entire country than that of 
 the Western Union Telegraph Company. The omnipresent evidences of its 
 existence, its enormous growth in extent, value, and earning power, based as it 
 is on a universal want, combine to make it a property regarding which wide- 
 spread interest is felt, and in the distribution of which less difficulty would be 
 encountered than with that of any other security on the list. Therefore it was 
 proposed that all that could be said for and against the Western Union stock, as 
 a security, should be put into some shape accessible to the vast body of investors ; 
 and that this should be sent in the direction, and to parties hitherto not possessed 
 of the information, in the hope that business might thereby be created. 
 
 The form taken in the presentation of these facts in the within pages affords 
 opportunity for a mode of treatment which at once makes the subject of interest, 
 and at the same time enables the question to be discussed minutely. The con- 
 versation as hereinafter reported is but an amplification of similar ones of con- 
 stant occurrence. The questions put and answered are those that every day’s 
 experience in New York have developed, while the figures given are derived 
 from such sources as were available to parties outside the Company. 
 
 The brochure is submitted with the foregoing explanation. Whether the 
 object sought is a worthy one; whether the mode adopted is a wise one; or 
 whether the effort succeeds or fails, makes little difference in the force of its 
 arguments, the accuracy of its figures, or the inevitable logic of its conclusions. 
 These must be taken on their merits, and the motive which inspires their pre- 
 sentation should neither weaken nor strengthen them. 
 
 Those most benefited by the business which it is sought to create by this 
 compilation are the firms whose names are to be found on the pages at the end 
 of the publication, and who, by inserting their announcements, have contri- 
 buted toward the expense of printing and distributing the work. 
 
 These firms must be held in no way responsible for the conclusions reached 
 or the statements made in this pamphlet, for such statements must stand or fall 
 upon their own merit. The houses in question only seek for business, not neces- 
 sarily confining themselves to the stock mentioned in these pages, but offering 
 their services for the purchase or sale of any security upon the list of the New 
 York Stock Exchange. 
 
AN INTERVIEW. 
 
 OOD-MORNING, Mr. Richards. I see you are at leisure, and I de- 
 vT sire to avail myself of your kind advice for a few moments, if you will 
 permit me. I have come all the way from Pittsfield to see some friends 
 in New-York to consult them on a matter of considerable importance, 
 not only to myself, but to several of my neighbors ; and knowing that as 
 a commission merchant your knowledge is of a very general character, 
 I desire to avail myself of your acquaintance with men and things, and 
 get the benefit of your advice and experience.’' 
 
 “ I am pleased to see you, Mr. Barker, and will be glad to serve you. 
 The business relations I have had with your late firm, when you were 
 actively engaged in trade, were of a pleasant and profitable character. 
 I shall be glad to be of use to you or to your neighbors in any way you 
 point out.” 
 
 “ What I want, Mr. Richards, is advice with regard to the disposal 
 of a very considerable sum of money which hitherto I have had well in- 
 vested, but which is now free, owing to payments having matured, and 
 I am now anxiously looking around to place it again where it will yield 
 me a fair return. A number of my neighbors are in a similar position, 
 to a greater or less extent. The cost of living is now much greater 
 than it was five years ago ; the expensiveness of one’s family and the 
 drains upon one’s purse are greater than ever before, while money, 
 except actively employed in business, seems to have far less value as an 
 earning power than formerly. The increase in the supply of money 
 has grown with much greater rapidity than the opportunities for its 
 safe investment. It seems impossible at the moment to obtain 
 investments for funds in channels which were formerly to be regarded 
 as quite safe, at rates which will produce sufficient to live upon unless 
 a man is immensely rich. Heretofore, Government, State, and City 
 bonds were available to produce a fair return, but the prices of these 
 
6 
 
 A Talk on Telegraphic Topics. 
 
 securities have advanced to such an extent that really the amount they 
 now yield is very small, while real estate mortgages, on which the 
 interest is sufficiently high, are now so scarce and frequently so unde- 
 sirable that one is forced to look to another class of securities if one’s 
 money is to be employed to any profit.” 
 
 “ Well, Mr. Barker,” replied Mr. Richards, “ you are a representative 
 of a class which I find is growing very rapidly in this country — a class 
 who really do not know what to do with their money. I have correspon- 
 dents all over the country who are constantly seeking for information as to 
 the best mode of placing large and small sums of idle money to advantage. 
 The peculiar nature of the transactions of my firm and the contact we 
 have with such varied interests have caused us to be intrusted with a great 
 deal of this kind of business. I have made it a study to get sufficient 
 information in various ways to enable me to answer such inquiries to 
 the best possible advantage. The gravest question which presents 
 itself to men of moderate means, next to the question of ‘ What shall 
 we do to be Saved,’ is ‘ What shall we do with our Money’ in order 
 to produce a fair living. The old channels of investment having to 
 a large extent become unprofitable, through being so crowded with 
 capital, it has become necessary to a vast class of small capitalists 
 to discover other avenues into which their money can be diverted, 
 where it will be at once safe, accumulative, and certain in its return. 
 There is, of course, an infinite variety of attractive investments offer- 
 ing, but the great danger is their experimental character ; while shares 
 in enterprises, the success of which is assured, are held at prices so high 
 that, as you say, they yield a very poor return. My own belief is that, 
 as a rule, shares in a comprehensive, well-managed, incorporated com- 
 pany are far preferable to what have hitherto been regarded as the safest 
 kind of investments based on individual responsibility, such as mortgages, 
 etc. Thus a farm mortgage is dependent upon the life, health, habits, and 
 success of one individual only. Investments in a savings bank are depen- 
 dent upon aggregations of such individuals ; for, as a rule, these institu- 
 tions, outside of a few cities, have the bulk of their means in mortgages. 
 The value of bank stock is largely dependent upon the ability of its 
 management and the safety of its loans. State, City, and County bonds 
 of undoubted character yield a rate so low as to make them almost unavail- 
 able for the purpose now in view. There are numerous railroad bonds 
 and stocks which you can get now at rates that yield a fair return, though 
 the rank and file of first-class securities of this character still keep high, 
 while those that do offer a temptation to investors, because of cheapness, 
 are in localities more or less exposed to unforeseen local contingencies, 
 and possessing in themselves no very general scope. The new enter- 
 prises offering are mainly of a competitive character, or for the develop- 
 ment of special localities, the success of which yet remains to be 
 
A Yankee in Search of a Vi enture. 7 
 
 demonstrated. I think I can, however, suggest to you a stock of universal 
 character independent of loc^l influences and climatic changes, and 
 reasonably safe from hurtful competition, and which, all other things 
 being equal, might be a very desirable investment.” 
 
 u But,” urged Mr. Barker, “ I doubt if such a security can be found 
 that would at once be safe and cheap. The only one for general invest- 
 ment, of the character indicated, is a Government bond, as applying to 
 the whole country. I wish there were other securities of as general a 
 character.” 
 
 “ I can recall none equally universal,” Mr. Richards responded, 
 ‘ ‘ except the stock of the Western Union Telegraph Company; and 
 my attention has been very much directed of late to that property.” 
 
 “ I, too, have heard much discussion of late regarding this stock,” 
 Mr. Barker replied; “ but the objections continually urged against it as 
 an investment are so numerous and so strong that I have hesitated to 
 say much about it. My information regarding it is somewhat contra- 
 dictory ; I would like to have your opinion about it, and, if possible, the 
 result of some investigation of it by you. I should require to be satisfied 
 on a good many points, though, before I put my money into that 
 stock.” 
 
 “ Leaving out of the question Government bonds,” the commission 
 merchant replied, “ with the exception of the Western Union stock, all 
 other securities are local. There is no other stock which represents 
 property so widely diffused, the receipts of which are derived from 
 localities so infinite in number, and whose income is less liable to local 
 or special unfavorable influences. I suppose it is because the name of 
 Western Union is so familiar in all parts of the country, by its connection 
 with the entire community, that so much inquiry arises in relation to its 
 stock by just such people as yourself ; and I am told that the number of 
 investors in small amounts who seek it is much greater in proportion than 
 obtains in any other stock available. Frequent inquiries, such as yours, 
 have caused our firm to investigate Western Union to some extent, and 
 we have become so much interested in it, as well for our own sake as for 
 that of our friends, that we have now got about all the information avail- 
 able to casual inquirers, and will get all we can hereafter for the purpose 
 of being thoroughly posted. The stock pays six per cent., and at the 
 going price now, say eighty-five, yields about seven per cent. Divi- 
 dends have been paid for a great many years with regularity, and it is 
 claimed by those familiar with the enterprise that seven per cent., 
 and probably eight per cent., will be eventually earned and paid on 
 its present capital of eighty millions. This, of course, makes it a 
 very attractive stock, and if parties could be thoroughly satisfied as to 
 the safety and permanence of that profit there would no doubt be a 
 large absorption of it by investors. But on these points you must 
 
8 
 
 A Talk on Telegraphic Topics. 
 
 judge for yourself. If there is anything we can do to aid you to a 
 decision in regard to this or any other stock we shall be glad to 
 assist you in the matter. One thing is certainly true of Western Union: 
 whatever its possible demerits may be, that there is not a security in 
 the entire list that has yielded continuously a better return. I have 
 some friends who, many years ago, became possessed of some of the 
 stock, and have continuously held it. They have not only had their 
 dividends with the greatest regularity, but, by the steady growth of the 
 property, the addition of betterments, and the results of combinations, 
 their stock has continually enhanced in value. Although it is quoted 
 ten or fifteen per cent, below par, because of the increase in the amount 
 of capital, the general result to continuous holders has been uniformly 
 extremely favorable. Judging the future by the past, there seems no 
 reason to expect any other result to those who make an investment in 
 the property.” 
 
 “ I am astonished, Mr. Richards,” said Mr. Barker, quickly, “to find 
 you such an ardent advocate of a stock for permanent investment 
 against which so much has been urged, and I am curious to learn how 
 a man of your prudence and well-known conservatism can justify an 
 opinion so favorable as you have just expressed. For instance, is it not 
 true that the property of the Western Union Telegraph Company is 
 of the most fragile character in the world ? Are not the poles and wires 
 scattered broadcast over the country, almost utterly valueless as a real- 
 izable asset, and if sold by any of the ordinary modes of realization, 
 would they bring more than a tithe of their original cost ? ” 
 
 “To a certain extent you are right,” Mr. Richards replied; “but 
 you must remember that these poles, wires, instruments, and batteries, 
 represent a capacity to do the business of the country quite as effectually 
 as do the rails, locomotives, and station-houses of the New- York Cen- 
 tral, Pennsylvania, or Union Pacific Railroads in the localities they 
 respectively serve. There is nothing more essential to the existence 
 and success of the entire commercial community than facility of com- 
 munication; it is the very life-blood of enterprise, and without the 
 Post-Office and the Telegraph there would be an end of progress, com- 
 mercial and social. Obliterate these two agencies and the Middle Ages 
 have come again. Any individual or company owning the Post-Office, 
 with the right to charge a profitable price for carrying each letter to its 
 destination, would ‘ possess the potentialities of a fortune beyond the 
 dreams of avarice . 1 Yet in what respect does the Telegraph Company 
 differ from the Post-Office in capacity for earning ? Indeed, the Tele- 
 graph is the essential element where instantaneous service is required. 
 If communication is as necessary to the body politic as food and air 
 are to the individual, and if a reasonable profit can be exacted in the 
 supply of that universal need, it would seem that no investment need 
 
The Man who Doubts. 
 
 9 
 
 be considered a safer one than in an enterprise having this for its 
 mission.” 
 
 “ What you say,” said Mr. Barker, musingly, “is very interesting; 
 and, if all things else were equal, would make an investment of this 
 character most attractive ; but the very extent and universal character 
 of the undertaking presupposes the possibility of success to ventures 
 which should compete for a share in a prize so great, and it seems to me 
 the door to competition is open wider than in enterprises of a more local 
 character.” 
 
 “At the first glance,” Mr. Richards replied, “what you say seems 
 possible ; but experience does not prove that competition in telegraphy 
 has been at all successful, especially when confined to localities. Half 
 a dozen postal departments, or a Post-Office Department in each State 
 in the Union, would not be nearly as advantageous or successful as a 
 single postal department operated from a center by a single executive 
 staff. One of the elements of success in the Western Union Telegraph 
 Company is the fact that it is almost universal in its comprehensive 
 scope. It is, as you perhaps know, a combination of numerous com- 
 panies, some sixty in number, in various parts of the country, all 
 merged into one common organization. The postal department at 
 Washington is not more absolute in its control of the post-office in the 
 remotest part of the country than is the Executive Department of the 
 Western Union Company at New York in command of its offices and 
 staff scattered through the length and breadth of the land. If the post- 
 office is to be regarded as the first means of communication and of 
 universal application in its slow way, at a rate limited by law, which 
 makes it barely self-sustaining, certainly the Western Union Telegraph 
 Company must be regarded as the second means of communication. It 
 has possibilities of almost unbounded increase, and at rates or tolls 
 unlimited by law, susceptible of yielding on every single item of business 
 done a reasonable profit. The number of messages now sent annually 
 is over thirty millions. If on every one of these messages a certain 
 profit is made, one can very readily understand what an enormous 
 revenue a company having control of business to this extent has assured 
 to it.” 
 
 “But,” urged Mr. Barker, “the very fascinations of such an enter- 
 prise make it probable that another company, equally comprehensive with 
 the Western Union, may seek to occupy the ground it now possesses. At 
 any rate, between the great centers of commerce a profit might be 
 found in competing lines; or such competition might be offered as 
 would divide the business and reduce the rate to a figure which would 
 destroy the chance of dividends.” 
 
 “ I must admit,” said Mr. Richards, “ that the possibilities of com- 
 petition seem at first sight great, but thus far a most singular fatality 
 
10 
 
 A Talk on Telegraphic Topics. 
 
 has attended every effort of this kind. I believe it is a fact that, with 
 one exception only, no opposition telegraph company has ever paid its 
 expenses . Taking the numerous efforts of this kind into account, 
 there has been less damage done to the Western Union Company than 
 has come from competition to any other enterprise of any magnitude in 
 the country. The past is, of course, our only guide in matters of this 
 kind; no prophet can predict with half the certainty that the past 
 predicts, and the prospect of profit for any competition of this kind is 
 even less to-day than ever before. It is dawning upon all who have 
 closely observed this question, that the only possibility of success in 
 opposition telegraphy is the profit obtained by absorption and by 
 amalgamation. I am told that it has been determined that no further 
 amalgamations or consolidations are to take place, so that the chances 
 of opposition enterprises are more remote than ever before. ” 
 
 “ You seem to be unusually well posted on this subject, Mr. Richards, 
 but I confess I am somewhat surprised that you take such a favorable 
 view of the position of the Western Union Company, which I had come 
 to regard as the Ishmael of stocks. It is true I got my prejudices from 
 rumor and hearsay, and I should have remembered that it has been 
 said, ‘The multitude is always wrong.’ I am free to admit that you 
 may be right and all the gossip I have heard erroneous. I should like 
 to pursue the matter further, but I have already sufficiently trespassed 
 on your valuable time, and will take the liberty of again communicating 
 with you in relation to it. I propose to make a considerable deposit 
 with your firm shortly, and will want to know further in relation to 
 Western Union and other stocks, the prospects of Iowa bonds, etc,” 
 
 “ I am somewhat surprised myself,” Mr. Richards replied, “ to have 
 been betrayed into arguing so strongly in favor of what appears to be 
 a monopoly of a very important element in the commercial fabric of the 
 country. The only way I can account for speaking so glibly upon the 
 point is, that the subject has occupied a good deal of my time of late, 
 owing to discussions which have arisen in my immediate circle of 
 acquaintance regarding the telegraph question; and having a most 
 intimate friend somewhat interested financially and otherwise in the 
 question, and who has been with me investigating its merits. My 
 friend is about to prepare an elaborate report for some correspondents 
 of his in England on the question of the safety, permanency, and profit- 
 ableness of investments in American Telegraph property. If you like, 
 when this report is ready, I will send you some extracts from it if I can 
 get permission so to do. 
 
 “There are, of course,” continued Mr. Richards, “numerous other 
 investments offered to you in this market, and I shall be happy to inquire 
 into any of them for you, but, really, I know of few which at the present 
 moment holds out the prospect of returns so certain, so ample, so per- 
 
The Man who Reasons. 
 
 11 
 
 manent, and at the same time likely to increase so rapidly, as a moderate 
 investment in the stock of the Western Union Telegraph Company. At 
 a price below par, it yields a return greater than any similar first-class 
 security. I heard it remarked the other day that Mr. Gould had 
 just as good an income from his twenty-five millions of Western Union 
 stock as Mr. Vanderbilt had from his fifty millions of Government bonds. 
 Mr. Gould’s stock, at an average, say, of eighty-five, yields, at six per 
 cent., as much as the Government’s, which cost Mr. Vanderbilt one 
 hundred and ten and pay only four per cent. There is no possibility 
 of the latter increasing in earning power, while the possibilities of Western 
 Union are limited only by the growth and resources of the country, the 
 increase of the business, and the success of its management. By growth 
 of population and immigration we gain ten thousand people every day ! 
 Each unit added to the population adds to the value of Western Union 
 stock. The company taps the pockets of all, directly or indirectly, while 
 it goes without saying that every new consumer adds to the volume of 
 business of the country, inuring to the benefit of telegraphy, the indis- 
 pensable adjunct of trade. If a man as shrewd as Mr. Gould is known 
 to be is content to hold, say, one quarter of his wealth invested in this 
 single enterprise, it is likely to be a sound and healthy one. He has 
 surrounded himself with a staff of managers of the highest possible grade, 
 and a Board of Directors, probably the most wealthy and influential ever 
 got together in this or any other country. These are pretty good evi- 
 dences of the safety of the undertaking. Aside from this, the number 
 of investors in Western Union is constantly increasing, and I am told 
 more of the stock is being absorbed in small quantities, by investors in 
 sections of the country more numerous, than any other stock in the list. 
 I shall be happy to pursue the matter further if you like, and get you more 
 explicit and late information about this and any other stock you feel an 
 interest in. We shall be pleased to receive from you any deposit you 
 may make, and will do our best to advise you as to its disposition.” 
 
 Mr. Barker thanked the commission merchant for his courtesy and 
 attention, apologized for having occupied so much of his time, and 
 withdrew. 
 
CORRESPONDENCE. 
 
 Pittsfield, Mass., May io, 1882. 
 John Richards, Esq., New-York City, N. Y. 
 
 My Dear Sir: When I had the pleasure of seeing you in New-York a week 
 or ten days ago you were good enough to say that you would forward to me 
 some extracts from a report that was to be made upon the safety, permanency, and 
 profitableness of the stock of the Western Union Telegraph Company as an in- 
 vestment, but as yet I have not heard from you. I have not yet made any move 
 in regard to the purchase of securities to absorb the deposit in the hands of your 
 firm, and as it is necessary that something should be done soon, I shall be 
 obliged if you will send to me, when convenient, the extracts referred to. I have 
 discussed with my neighbors the desirability of an investment in Western Union 
 stock. I meet with much opposition and criticism, and having become, from 
 what you told me, somewhat of an advocate of that enterprise, I should like to be 
 put in possession of all that can be said both for and against it. I am particu- 
 larly anxious to be fortified with some statistics as to the growth of the business, 
 the cost of construction, expenses of maintenance, and the profit possible as the 
 result of good management, and honest administration of its affairs. I shall be 
 glad to compensate you for the trouble of procuring any facts, and will take it as 
 a favor if you will give special attention to this duty. 
 
 You spoke of knowing some expert who was moving in this matter. I shall 
 be glad to have the benefit of his knowledge and such inquiry as he makes. You 
 may charge to my account any reasonable sum you expend in this direction 
 Thanking you for all your kind interest in my affairs, I am very truly yours, 
 
 G. Francis Barker. 
 
 New-York, May 15th, 1882. 
 
 G. Francis Barker, Esq., Pittsfield, Mass. 
 
 My Dear Barker : Your letter is received, and I hasten to comply with it by 
 saying that since our conversation some time ago in relation to the Western 
 Union Telegraph Company, I have become more than ever interested in 
 the question of the desirability of possessing some of its stock. As I recall 
 that conversation, I indulged in a good many generalities which I had reached 
 through some reflection on the subject and conversation with others, but the 
 anxiety and curiosity you displayed, and the frequency of the demand for infor- 
 mation before and since, have caused me to go into the question in more detail than 
 I had been able to do before we met. 
 
The Youngest Atlantic Cable. 
 
 13 
 
 I am glad to say that the favorable conclusions I then reached as to the 
 safety of this stock and its desirability have rather been strengthened than other- 
 wise. The report of my friend, who in some sense is an expert, as to the progress 
 of the business of the Western Union Telegraph Company, its prosperity and 
 probable future prospects, has been completed, and I hope to be able to enclose 
 in this letter some extracts. This report originated in the request of certain 
 English correspondents who have had their attention directed to the desirability 
 of being posted in Western Union stock. A considerable British demand, it is 
 thought, is likely to set in for this security from the fact that it is about to be placed 
 upon the London Stock Exchange, and a transfer office is about to be opened at the 
 house of J. S. Morgan & Co., the bankers, successors of George Peabody & Co. ; 
 also probably because two very prominent English telegraph men are likely to 
 be placed on the Western Union Board of Directors to represent the organiza- 
 tion at London. These two gentlemen are Mr. John Pender, Chairman of the 
 Direct Cable Co., and Mr. Weaver, Chairman of the Anglo-American Cable Co. 
 
 You are probably aware of the fact that the American Cable Company, which 
 has just completed two very fine cables across the Atlantic, the bulk of which is 
 owned by the parties interested in the Western Union, has recently formed a 
 pooling arrangement with the Anglo, Direct, and French Cables, and that the 
 eight or nine existing Atlantic Cables are now being operated in harmony. Prior 
 to this arrangement the Western Union Company became the lessee of the two 
 American Cables, and it is with the Western Union Company that this arrange- 
 ment is made, by which, it is said, it will clear a profit of a quarter million dollars 
 a year at the important advance recently established in cable rates. So that the 
 extension of the operations of the Western Union Company by this means to 
 Great Britain makes it more than ever an important element in the machinery of 
 communication between the Old and the New Worlds, and is likely to direct a 
 great deal of attention to its stock in Europe as an article for investment. Cable 
 and Telegraph stocks have long been favorite securities in England, and in con- 
 sequence of the election of these two prominent and successful promoters of 
 telegraph enterprises, and the facilities now afforded for dealing in the stocks, a 
 special effort has been made to obtain very specific and full information, my friend 
 being employed specially for that purpose. You will therefore see the motive 
 which has inspired the obtaining of these details, and when I say to you that the 
 party employed is well known for his reliability and shrewdness, you will under- 
 stand the value to be placed upon the representations he makes. 
 
 I am, truly yours, John Richards. 
 
LEADING FACTS 
 
 REGARDING THE 
 
 WESTERN UNION TELEGRAPH COMPANY. 
 
 I N view of the probability of considerable inquiry being made, in 
 London and elsewhere, regarding the Western Union Telegraph 
 Company, I have been requested to compile and put into accessible 
 shape the leading facts regarding this Company, the object sought 
 being to answer such questions as will likely be put by intending pur- 
 chasers, to English brokers and others, who will earn a commission 
 upon the business transacted. 
 
 While not professing to be an expert in the investigation of com- 
 panies of this character, and having no claim upon the Company or its 
 officers for special information, I will nevertheless endeavor to give to you 
 suclu leading facts as are apparent, some as extracts from reports, and 
 statistics of a sufficiently definite character, to enable parties to judge 
 generally as to the value of the security offered. 
 
 I have for a great many years closely observed the operations of this 
 and kindred companies, invariably preserving such statistics as were 
 made public. Without being specially interested in the Western Union 
 Company, though holding some of its stock, I have no object except to 
 develop such facts as may be useful to parties who require them, for 
 which I shall expect compensation, in proportion to the labor involved, 
 from those for whom the information is primarily designed. 
 
 Extent of Business. — In the first place, it is important to know 
 that the Western Union Telegraph Company is the largest and most 
 comprehensive telegraph organization that ever existed ; that it covers 
 a wider extent of territory, and affords necessary facilities to a larger 
 number of persons, than does any other private organization in the 
 world. Its receipts are derived from points more numerous than the 
 
Large but Legitimate Capitat. 
 
 15 
 
 income of anything else, except the Government itself ; and the entire 
 population of this country, now amounting to more than fifty millions, 
 have learned to become almost as dependent upon it as they are upon 
 the postal facilities furnished by the Government. The growth in the 
 use of the facilities of this Company has been much more rapid than the 
 growth of the population, or the increase in the national wealth. Thus, 
 in 1871 the number of messages sent did not exceed ten millions; while 
 in 1881 they much exceeded thirty millions — an increase of two hun- 
 dred per cent, in the ten years, the greater number of which were years 
 of depression. This is an indication of progress that hardly any other 
 business can show. 
 
 Capital. — In order to attain to a business of such magnitude, and 
 to so completely cover the country, as it now does, a series of events 
 have occurred which makes the history of the Company mainly a history 
 of consolidations and absorptions, which has caused its capital to grow 
 with a rapidity which the cost of construction would hardly justify, and 
 which fact is now the cause of considerable doubt as to whether or not 
 the property possessed represents adequately this enormous capital, 
 which, as it now exists, is Eighty Millions of dollars — the large increase 
 having taken place within the last few years. There is represented to 
 be a great deal of what is called “ water” in this eighty millions, and 
 it is alleged that for one-third or one-half the sum the whole plant and 
 construction of the Company could be replaced. But the same may 
 be said regarding almost any business which has taken years to build 
 up, and which yields a return at all commensurate with the expenditures 
 incurred. The amount of capital which it has taken to establish the 
 postal facilities of this country is vastly greater than that which the 
 Western Union Company now represents and pays dividends upon; 
 while the earning power of the latter is infinitely larger than that of 
 the Post-office Department, which in its turn has nothing to show in 
 the shape of assets for its immense expenditure. 
 
 The great trunk lines of railroad are all represented by capitalized 
 and bonded indebtedness aggregating much larger sums in many cases 
 than the capital of the Western Union Company, and there is hardly 
 one of them but could be replaced now for the same proportionate 
 amount which, it is alleged, would suffice to duplicate the Western 
 Union lines. The sum at which the telegraph system of the United 
 Kingdom was taken over by the Government of that country ought to 
 form a fair basis for an estimate of the value of the property of the 
 Western Union Company. In round figures the British Government 
 paid fifty millions of dollars for a system not one-quarter as large as the 
 Western Union Telegraph Company — the number of miles of wire in 
 Great Britain being slightly over 100,000, while the Western Union has 
 
16 
 
 A Talk on Telegraphic Topics. 
 
 in miles of wire now nearly 350,000. If the Government of the United 
 States were to absorb the Western Union system, as the conservative 
 Government of England absorbed the British system, the capital of the 
 Western Union would stand almost being doubled up to one hundred 
 and sixty millions ; for if it cost the British Government fifty millions 
 for one hundred thousand miles of telegraph, the United States Govern- 
 ment, on the same basis, would have to pay one hundred and sixty 
 millions for three hundred and fifty thousand miles of Western Union 
 lines, as they now exist. Therefore, the capital of the Western Union, 
 at the present figure, with these points in view, does not seem so 
 excessive. 
 
 Earning Capacity. — The value placed upon a property is regu- 
 lated by its earning capacity. Especially should this be the case when 
 it has, virtually, exclusive privileges — an almost sole possession of 
 territory on which others cannot encroach without serious loss. The 
 earning capacity of the Western Union Telegraph Company, compared 
 with its capital, is greater than that of any other organization in this 
 country whose stock is offered at all freely to the public, as will be seen 
 ’ by statistics herewith inserted. The Company is earning now six mill- 
 ions of dollars a year, even allowing for a very considerable diminution 
 in the rates for transmitting messages, and after making most liberal 
 provisions for renewals and extensions. If six millions of dollars a year 
 profit can be earned, it justifies a capitalization of eighty millions, 
 because this amount is equal to over seven per cent, per annum, and it 
 only requires $4,800,000 to make a dividend of six per cent, on the 
 existing capital. While, therefore, the capital seems large, representing, 
 as it does, property of a fragile and perishable character, the foregoing 
 considerations should not be lost sight of. To this should be added the 
 most important fact — that the good-will, existence, and organization of 
 a business so vast and comprehensive are of immense value, as it would 
 take many years to create a traffic of equal volume. 
 
 But, besides all this, the capital represents such values as are found 
 in the vast number of existing contracts, for privileges and franchises, 
 mostly exclusive, with more than eight hundred railroad companies. 
 By a division of expenses, and a joint use of line and offices, vast 
 areas of country are made tributary at a very small expense to the reve- 
 nues of the Telegraph Company, while the low cost of maintenance of 
 the lines on roads so frequently traversed, and under constant surveil- 
 lance, is an advantage that is obvious. 
 
 A great value must also attach to the patents which the Western 
 Union Company controls, and on which vast sums have been, expended. 
 It is said by a shrewd observer, that electrical science has gone back one 
 hundred years in England, owing to the Government having assumed 
 
Bonded Indebtedness. 
 
 17 
 
 control of the telegraphic system, and affording little encouragement 
 to invention and progress in this most wonderful and useful depart- 
 ment of science. This remark has to be completely reversed when 
 referring to the Western Union Company, which, with a liberality for 
 which it has been occasionally blamed, has done all in its power to 
 develop in the highest degree the possibilities of the electric current. 
 It has its reward to-day in being able to do a business over regions 
 of country of vast extent, of a volume and magnitude that even ten 
 years ago seemed an utter impossibility. 
 
 All these considerations must enter into any estimate of the value of 
 the property of a company like this. In view of what it has accom- 
 plished, what it can earn, and the impossibility of duplicating its advan- 
 tages for any amount of money, the sum of eighty millions does not 
 seem a very excessive amount. 
 
 Bonds and Indebtedness. — The indebtedness of the Western 
 Union Company is exceedingly small. The bonds existing upon its 
 buildings in New York represent the bulk of its bonded indebtedness, 
 which now amounts to only six million dollars, the interest on which 
 is nearly defrayed by the rental. By the operations of a sinking 
 fund this amount is being gradually reduced. These bonds are in 
 great favor, and are almost impossible now to obtain at less than 
 120. No other indebtedness exists in any form. It will be seen, 
 therefore, that the entire revenues, after the payment of expenses, 
 extensions, and renewals, are available for dividend purposes. There 
 is no company of anything like equal magnitude in the country, less 
 embarrassed by fixed charges or obligations than the Western Union 
 Company ; hence the shareholders get all the benefits which arise 
 from the progress of its business, and are able to control and direct its 
 receipts to their own benefit. The position of the company is some- 
 what unique in this respect, and makes the stock all the more desirable 
 as an investment. 
 
 Statistics. — The growth and increasing value of the company’s 
 property, the number of messages sent, its receipts of money, expenses 
 and profits, are a better basis by which to judge of the merits of the 
 stock than any number of arguments or assertions. The figures, reveal- 
 ing all these points for a series of years, are available in the annual 
 reports of the company, and an extract therefrom is herewith inserted, 
 condensed as much as possible. The table given here is somewhat 
 different from that ordinarily published, and is taken from the American 
 Almanac, with such additions as are necessary to bring it down to a 
 date more recent, and is as follows : 
 
 2 
 
Statement showing the Mileage of Lines and Wires, Number of Offices, and Traffic of the 
 Western Union Telegraph Company for each Year, from June 30, 1866, to June 30, 1881 : 
 
 is A Talk on Telegraphic Topics. 
 
A Council of Notables. 
 
 19 
 
 Attention is specially directed to the remarkable increase which has 
 taken place in every item of importance contributory to the prosperity of 
 this great company. Thus, the receipts since 1 867 have been increased from 
 six to fourteen millions, and this year will reach sixteen millions, show- 
 ing a gain of 150 per cent., while the expenses have increased only from 
 $3,900,000 to $6,900,000. The profits have more than doubled, while the 
 average tolls per message have been materially decreased, and the cost 
 of transmitting the same declined in about a like proportion. It may be 
 safely asserted , that a photograph of the business of no other company 
 in the world , presented in such amplitude as the foregoing table , can 
 exceed it in all the elements of steady growth , increased revenues , pro- 
 portionate reduction in expenses , and growth in profits ; while at the 
 same time affording facilities of such an extraordinary character to the 
 public , at rates diminishing with sufficient rapidity to constantly warrant 
 an increased use of this important agency . 
 
 If the future of telegraphy in North America is to be judged by the 
 past, there is no element in the social and commercial fabric which will 
 have a greater development. And if the prosperity of the Western 
 Union Company, as indicated by the foregoing figures, is hereafter to 
 be equal to that which it has enjoyed in the last quarter of a century, 
 then there is no security more safe and more desirable than the shares 
 into which the property is divided. It seems impossible to get away 
 from a favorable conclusion regarding the future of the Company, after 
 closely analyzing the progress it has made in the past, as indicated in 
 these figures. Whatever justification there may be for the doubts, criti- 
 cisms, and apprehensions regarding the future, certainly the figures of 
 the past are incontrovertible as indicating its claim to confidence in its 
 earning power and its increasing value. 
 
 Directory and Staff. — The past and present success of a business 
 enterprise, and its security for the future, are indicated always by the 
 class of men directing its policy and employed in the administration of 
 its affairs. If judged by this standard the Western Union Telegraph 
 Company must take high rank. Its board of directors includes a larger 
 number of wealthy and successful men than can be found at the council 
 table of any other company in this country, or indeed in the world. It 
 comprises twenty-nine members, and is most thoroughly representative 
 of the varied financial and commercial interests of the country. Aside 
 from the individual worth of these directors, estimated at from three to 
 four hundred millions of dollars, they administer and control interests 
 representing in the aggregate infinitely greater sums, employed in all 
 the methods of transportation, and in every mercantile pursuit. In 
 short, with a few exceptions, the Directory is a body of magnates such as 
 has never before been got together in the management of one enterprise. 
 
20 
 
 A Talk on Telegraphic Topics. 
 
 In order that the reader, especially from abroad, may perfectly under- 
 stand who these gentlemen are, their names are herewith inserted: 
 
 Nor VI N Green, President of the Company . 
 
 Thomas T. Eckert, Vice-President and General Manager . 
 
 John Van Horn, Vice-President of the Company . 
 
 Edwin D. Morgan, ex-Governor State of New York j Capitalist 
 and Merchant . 
 
 Augustus Schell, Capitalist and Director New York Central 
 R. R . Co. 
 
 George B. Roberts, President Pennsylvania R. R. Co. 
 
 C. P. Huntington, President Central Pacific , and Chesapeake and 
 Ohio R. R. Cos. 
 
 Sidney Dillon, President Union Pacific R. R. Co. 
 
 Hugh J. Jewett, President of the Erie Railway. 
 
 Samuel Sloan, President Delaware and Lackawanna R. R. Co. 
 Jay Gould, Capitalist. 
 
 Russell Sage, Capitalist . 
 
 Alonzo B. Cornell, Governor State of New York. 
 
 Cyrus W. Field, Capitalist and Director Atlantic Cable Cos. 
 Edwards S. Sanford, Vice-President Adams Express Co. 
 
 James H. Banker, Capitalist. 
 
 Robert Lenox Kennedy, Vice-President Bank of Commerce. 
 
 J. Pierpont Morgan, Messrs. Drexel , Morgan Co. 
 
 F. L. Ames, Capitalist , Boston. 
 
 Harrison Durkee, Capitalist. 
 
 Edwin D. Worcester, Treasurer New York Central R. R. Co. 
 
 W. D. Bishop, ex-President New York , New Haven , and Hartford 
 R. R. Co. 
 
 Zalmon G. Simmons, Capitalist , Kenosha , Wis. 
 
 Amasa Stone, Capitalist , Cleveland , Ohio. 
 
 George J. Gould, Capitalist. 
 
 Chauncey M. Depew, Director New York Central R. R. Co. 
 
 J. W. Glendinning, President Acadia Coal Co. 
 
 Erastus Wiman, President Great North-Western Telegraph Co. of 
 Canada. 
 
 The staff of employes is an exceptionally strong one, owing largely 
 to the fact that the rapid growth which has taken place in the business 
 
Wide Dispersion of the Property. 21 
 
 itself so rapidly, within the past generation, has developed in the highest 
 degree the capacity of the men engaged in carrying it forward. Thus, 
 nearly every individual on the staff has had some peculiar training to fit 
 him for the task in hand ; while a majority of them, engaged in the direct 
 administration of its affairs, have had an enlarged experience of the 
 highest and most varied kind to qualify them for the positions they 
 occupy. This is especially true of Dr. Norvin Green, the president, who 
 has spent a lifetime in the most complete devotion to the advancement 
 of telegraph interests, and whose wisdom and experience are well known 
 and appreciated. Associated with the president is General Eckert, 
 the able administrator of the details of the business. General Eckert 
 was Assistant Secretary of War during the Rebellion, and greatly 
 distinguished himself by his ability and vigor in this important posi- 
 tion at the most critical period in the history of our country. He is 
 most ably seconded by Colonel Clowry, who is located at Chicago, 
 and whose district comprises fully one-half of the entire continent. A 
 corps of assistants and local managers, whose loyalty and confidence the 
 general manager has won in a marked degree, supplement him at every 
 point. The company is thus singularly fortunate in possessing the best 
 administrative skill in every branch of its business, whether among its 
 army of operators or in the financial, construction, or maintenance 
 departments. While, on the one hand, it would be impossible to oblit- 
 erate a staff and organization so complete for the purpose in view, it 
 would on the other be equally impossible to duplicate it, even after 
 long years of growth and experimenting, and at an expenditure such as 
 no sane body of capitalists would for one instant contemplate. 
 
 Distribution of the Property. — In order to show the extent 
 of the territory served by the Western Union Telegraph Company and 
 the distribution of its property, the following table is submitted as indi- 
 cating the number of miles of poles and of wire in each State and Ter- 
 ritory in June, 1881. Since this was compiled, there has been an increase 
 of nearly twenty per cent, in many localities. The “ phantom ” wire given 
 in the list, over 109,000 miles, represents the additional service possible 
 with the use of the duplex and quadruplex instruments, which has been 
 immensely increased during the last year. It is no exaggerated state- 
 ment to make that the Western Union Telegraph Company have in 
 actual service, by the introduction of this extraordinary invention, a 
 mileage of fully half a million of miles of wire. 
 
 A statement indicating the possessions of the company in real 
 estate might accompany this tabulated showing of its lines, but for want 
 of room. It will suffice to say that the Western Union possesses good- 
 paying real property worth considerably over three millions. The fol- 
 lowing will show the distribution of its earning power: 
 
22 
 
 A Talk on Telegraphic Topics. 
 
 TABLE 
 
 SHOWING NUMBER OF MILES OF POLES AND OF WIRE IN 
 EACH STATE, TERRITORY, ETC., JUNE 30, 1 88 1. 
 
 
 
 Miles 
 
 Miles 
 
 
 
 Mi’es 
 
 Miles 
 
 
 Miles 
 
 Actual 
 
 Phantom 
 
 
 Miles 
 
 Actual Phantom 
 
 States y &c. 
 
 Poles. 
 
 Wire. 
 
 Wire. 
 
 States , &c. 
 
 Poles. 
 
 Wire. 
 
 Wire. 
 
 Alabama 
 
 i ,953 
 
 663 
 
 7;858 
 
 1,798 
 
 Montana 
 
 
 310 
 
 .... 
 
 Arkansas 
 
 1,349 
 
 625 
 
 Nebraska 
 
 
 3, x 55 
 
 x ,444 
 
 Arizona 
 
 557 
 
 931 
 
 .... 
 
 Nevada 
 
 . 1,940 
 
 3,763 
 
 i , x 43 
 
 British Columbia. . . 
 
 
 New Brunswick.. 
 
 584 
 
 x ,953 
 
 1,881 
 
 California 
 
 4,945 
 
 9,506 
 
 1,725 
 
 New Hampshire. 
 
 9 0r 
 
 2,097 
 
 282 
 
 Cape Breton 
 
 300 
 
 810 
 
 236 
 
 New Jersey 
 
 ■ • 1,704 
 
 12,244 
 
 3,763 
 
 Colorado 
 
 1,576 
 
 4,825 
 
 672 
 
 New Mexico 
 
 .. 856 
 
 x ,376 
 
 16,609 
 
 Connecticut 
 
 i ,454 
 
 8,036 
 
 5,385 
 
 New York 
 
 • 8,445 
 
 33 , 04 x 
 
 16,609 
 
 Delaware 
 
 3 i 5 
 
 L 550 
 
 574 
 
 North Carolina. . . 
 
 1,611 
 
 4 , 3 X 5 
 
 95 x 
 
 Dakota 
 
 Nova Scotia 
 
 911 
 
 2,306 
 
 1,483 
 
 Dist. of Columbia.. 
 
 ”48 
 
 424 
 
 247 
 
 Ohio 
 
 , . 7,617 
 
 27,812 
 
 *2,751 
 
 Florida 
 
 240 
 
 367 
 
 
 Oregon 
 
 .* 836 
 
 1, 5 X 9 
 
 400 
 
 Georgia 
 
 2,842 
 
 6,989 
 
 1,610 
 
 Pennsylvania 
 
 * 7, x 74 
 
 29, x 93 
 
 11,509 
 
 584 
 
 Idaho 
 
 207 
 
 207 
 
 
 Rhode Island 
 
 266 
 
 x ,333 
 
 Illinois 
 
 9,808 
 
 26,600 
 
 19,076 
 
 7,252 
 
 South Carolina . . . . 
 
 . 1,196 
 
 3,902 
 
 930 
 
 Indiana 
 
 5,430 
 
 7 ,i 35 
 
 Tennessee 
 
 
 7,204 
 
 1,805 
 
 Iowa 
 
 5,606 
 
 11,119 
 
 1,609 
 
 Texas 
 
 • 1,6x3 
 
 5,109 
 
 435 
 
 Indian Territory. . .. 
 
 239 
 
 441 
 
 Utah 
 
 
 i ,373 
 
 776 
 
 Kansas 
 
 3,686 
 
 7,086 
 
 1,141 
 
 Vancouver 
 
 
 
 
 
 Kentucky 
 
 1,600 
 
 767 
 
 4,856 
 
 U 937 
 
 Vermont 
 
 
 2,612 
 
 2,061 
 
 Louisiana 
 
 2,593 
 
 3 J 5 
 
 Virginia 
 
 8,266 
 
 Maine 
 
 1,170 
 
 3,736 
 
 1,364 
 
 Washington. 
 
 372 
 
 454 
 
 
 Massachusetts 
 
 2,475 
 
 8 , 95 i 
 
 3,079 
 
 West Virginia 
 
 
 1,170 
 
 IX 5 
 
 Maryland 
 
 Michigan 
 
 1,483 
 
 3,952 
 
 6,415 
 
 8,888 
 
 3,209 
 
 2,955 
 
 Wisconsin 
 
 Wyoming 
 
 
 657 
 
 2,868 
 
 396 
 
 1,222 
 
 Minnesota 
 
 149 
 
 2,059 
 
 4,437 
 
 184 
 
 4,464 
 
 9,509 
 
 Canada 
 
 422 
 
 848 
 
 
 908 
 
 4,537 
 
 Missouri 
 
 Totals 
 
 . 110,000 
 
 327,000 
 
 109,548 
 
 Stability of Business. — The prosperity of the Western Union 
 Telegraph Company is less affected than that of any other investment 
 property by adverse circumstances which may affect the country gen- 
 erally. It is true that in times of the highest prosperity the telegraph is 
 called into frequent requisition, but it is equally true that when panics and 
 disasters impend there is a still greater necessity for this rapid means of 
 communication. No property in which investors generally can purchase 
 shares has a greater elasticity in its income than this. Of necessity the 
 telegraph, as the second means of communication, adapts itself to the 
 wants of the entire community, and what to almost every other business 
 would be disaster and loss, may be contributory of profit and prosperity 
 to the telegraph company ; so that in choosing an investment it would 
 be difficult to find one so universal in its extent, and at the same time 
 based upon one of the essentials of existence, in a country whose dis- 
 tances are so magnificent, and to the progress of which quick communi- 
 cation is of such vital importance. 
 
 But it is not only in times of prosperity or adversity that instantaneous 
 communication is a vital element, but every day’s progress makes the 
 field larger, and the use of the electric current more general. Custom, 
 habit, convenience, luxury, necessity, all combine to create a rapid 
 
The Telegraphic Drag-Net. 
 
 23 
 
 growth of this business. Thus, congratulations upon a wedding are 
 much more frequent by telegraph now than they used to be by 
 mail; sympathy at the death of a friend, rejoicing at the birth of an 
 heir, are all events that contribute their quota to the coffers of the 
 telegraph company, equally with the news of the assassination of a 
 President, notwithstanding the wide contrast between the import- 
 ance of the events. Laziness contributes in no small degree to the 
 revenue; for the man who would shrink from writing three or four 
 letters a day, thinks nothing of dashing off a dozen ten-word messages; 
 in fact, is rather pleased than otherwise to be able to accomplish so much 
 with such a trifling effort. It is difficult to name an interest, an event, 
 a vice, or a virtue which does not avail itself of the electric fluid as a 
 means of communication. Ministers exchange pulpits by telegraph, and 
 are summoned to christenings, weddings, and death-beds ; appointments 
 are made with the dressmaker, the dentist, the tailor, and the chiropo- 
 dist ; fleets are moved ; trains are dispatched ten thousand in a day ; the 
 furthest ends of the earth are reached and the most stupendous events 
 recorded through the medium of this company’s operations. The first 
 thing that the entire community does in the morning is to glance at the 
 news which the telegraph has brought, and on which the Western Union 
 Company makes a handsome profit. However much the use of the 
 telegraph may have permeated all ranks, walks, and conditions of life in 
 Europe or elsewhere, it is ten times the case in America, where the spirit 
 of enterprise, the eager race for wealth and the growth of prosperity, 
 make expenditures in this direction lavish, when compared with that pre- 
 vailing in any other portion of the world. In all this the Western Union 
 participates almost exclusively, and its share-holders profit thereby. 
 
 Value of the Property. — It is no uncommon thing to hear urged 
 against telegraph property, as an investment, that it is of an exceedingly 
 fragile character — that it is diffused over such broad areas as to be 
 unavailable for realization, and that once having been built it would be 
 impossible, if the business fails to grow up, to escape total loss. This 
 is exceedingly true, so far as competing telegraphs are concerned; but it 
 does not apply to a company occupying, to a very large extent, exclu- 
 sively the territory covered by its wires, and possessing an earning power 
 such as the Western Union has demonstrated by its years of dividends 
 earned and paid. While it may be true that telegraph plant is fragile, 
 widely scattered, intangible, and enough out of sight to lack that 
 solidity which makes other investments attractive, it may with equal 
 truth be urged that it is not exposed to the multitude of dangers 
 besetting all other investments. Floods may sweep away miles of railway, 
 riot may cause tracks to be torn up, station-houses, locomotives, and 
 loaded cars to be burned ; rows of houses may be leveled by fire in a 
 night; a mortgage may be rendered valueless by the death of the 
 
24 
 
 A Talk on Telegraphic Topics. 
 
 promiser; indeed, it is hardly possible to conceive any investment not 
 exposed to mutations of one kind or another. The Western Union 
 Company, owing to the wide area over which it is distributed, is less liable 
 to permanent injury than any other property. Should a tornado occur in 
 one State in the South, destroying lines and interrupting communication, 
 it does not interfere with the earning power of the lines in other 
 States in the North or West. Floods, fires, failure of the crops in one 
 locality, do not affect the ability to earn in another. The telegraph can- 
 not be blown up in a night, or affected seriously by any combination pos- 
 sible, except such cataclysms as ruin the prosperity of the entire country. 
 It is the only enterprise that is omnipresent and universal in its earning 
 power, taxing every “ boom,” whether in New England or New Mexico, 
 and but slightly affected, if at all, by the misfortunes of either locality, 
 which are fatal to local enterprises. The worst damage possible in one 
 city that can happen to a telegraph line, even its total destruction, can be 
 immediately repaired at slight cost ; while circuits are so numerous that 
 hardly any combination of evils could affect the current through business, 
 this being carried on independently of any local disturbance. Therefore, 
 though telegraph property may appear to be fragile, widely scattered, and, 
 in a sense, unrealizable, it possesses an elastic element, rendering it less 
 liable to serious damage of a permanent character than any other kind 
 of plant. 
 
 Efficiency of Service. — There have been at times, and notably 
 about a year ago, frequent complaints as to delay in transmission of mes- 
 sages, but for months past these have almost entirely ceased and the 
 service is now performed to the general satisfaction of the public. 
 The causes conspiring at all times to prevent full effectiveness are 
 numerous, especially in the summer months, when bush-fires are common 
 in various parts of the country ; and when great calamities occur, as in 
 the assassination of the President, which taxed the carrying capacity 
 of the wires to the utmost to meet the abnormal demand for hourly 
 bulletins, and by the press for news. But in ordinary times, especially 
 with the recent improvements and splendid management exhibited 
 during the last year, there is nothing which a Telegraph Company can 
 accomplish, in the way of promptitude and effectiveness, which it is im- 
 possible for the Western Union Company to perform. Dr. Green, its 
 excellent President, some time ago remarked that Time was the com- 
 petitor most feared ; and to effectually lessen the period occupied in the 
 transmission of the business is the constant effort of the executive de- 
 partment. It is no uncommon thing now to have messages from New- 
 York and Boston to Chicago, and vice versa, transmitted, transactions 
 effected, and answers received, all within a space of fifteen to eighteen 
 minutes. Between Washington and New- York no less than sixty wires 
 are in constant requisition, while between New- York and the Western 
 
Efficiency and Cheapness. 
 
 25 
 
 cities the great number of wires afforded by the numerous circuits offer 
 facilities which no other organization could ever dream of supplying. 
 Certain it is, if the Western Union Company cannot and does not afford 
 efficient service, it is not for want of facilities, or for want of effort, skill, 
 and experience on the part of its managers. That these facilities are 
 made the most of at the present moment is demonstrated in a very re- 
 markable manner by the single fact contained in a report to the General 
 Manager, to the effect that, during a certain period in the month of May 
 just passed, messages to the number of 119,612, received in the New- 
 York office, required, from the moment of filing there to the moment 
 of receipt at destination, an average time of only eight minutes and 
 eleven seconds . A number of messages so great, extending over a period 
 so long, would of course imply that the distances were of the most 
 varied character, and this report indicates the service performed as cer- 
 tainly a very remarkable one. It would be most difficult to conceive any 
 commercial organization possessing more fully and completely all the 
 requisites for perfect service than is possessed by this company. 
 
 Cheapness. — The rates which prevail over the lines of the Western 
 Union Telegraph Company, as compared with those charged in European 
 countries, are the subject of frequent criticism. It is maintained by those 
 unfamiliar with such matters, that if the rates were lowered the resulting 
 business would be larger and more profitable ; and that if the capital 
 had not been so much inflated, the public would be better served, 
 the business more efficiently done, and the rates exacted much lower. 
 It is an open question, after all, whether, in comparison with the dis- 
 tances traversed, the rates now charged are so much in excess of those 
 prevalent in smaller countries. Take, for instance, the distance between 
 New- York and Portland, Oregon, the rate is One Dollar and Fifty Cents 
 for ten words. To transmit a message an equal distance in Europe 
 would imply the use of the wires over a distance equal to that between 
 London and Teheran, Persia, and a cost of at least Ten Dollars . In 
 our more thickly settled States, such as New- York, Massachusetts, and 
 Pennsylvania, the rates generally prevailing are twenty-five to thirty-five 
 cents, a very little in excess of those existing in the Postal Systems of 
 equal distance in European countries. 
 
 Again, there are localities where existing rates of the Western Union 
 are much lower than in Great Britain. Thus, while there is no rate in that 
 country below twenty-five cents, the rate of fifteen cents between New- 
 York and Philadelphia has for years existed. The local city rate in Lon- 
 don is twenty-five cents; while the local rate in New- York and other 
 large cities is fifteen cents. The night rate is an unknown thing in 
 Great Britain, while in the United States it is universal and largely 
 availed of. 
 
26 
 
 A Talk on Telegraphic Topics. 
 
 As will be seen by the tables elsewhere, the reduction in the rates 
 charged for the transmission of messages has been extensive, and 
 although gradual, yet constant; and if in the future they are reduced 
 with the same rapidity as in the past, it will not be very long before the 
 tolls charged will bear about the same relative proportion of cheapness 
 as do other public charges in this country to similar charges in Europe, 
 as, for instance, in the transportation of passengers or carriage of freight, 
 etc. There is a point below which the business of telegraphy cannot be 
 done at a profit. The human element is so essential a portion of the 
 mechanism, and the skilled labor involved demands so high a rate of 
 compensation, that so long as it is necessary to have operators to trans- 
 mit and receive dispatches, and messengers to deliver them, the rate of 
 charges cannot be lowered to any very great extent with any prospect cf 
 profit or efficiency. Besides this, the business has grown in a greater 
 proportion than that of any other business, notwithstanding the fact 
 that the rates charged are criticised as being high. The business 
 of the Western Union Telegraph Company is apparently on a perfectly 
 safe and permanent footing, formed upon the traffic it is capable of carry- 
 ing constantly, punctually, and well, at the lowest rates consistent with 
 these demands. 
 
 In reference to cheap telegraph rates in England, where the system 
 is conducted by the Government, similar to the post-office department, 
 the Electrician , which is a London journal of high authority, says: 
 
 “ That we should be allowed to send cartloads of messages slowly and un- 
 certainly at sixpence may be well, though we are by no means satisfied about it ; 
 but it would be better still if we first made sure of sending them at all times, in 
 all weathers, and at all speed. This is what a telegraph is good for, if it is good 
 for anything. The price is not of first consequence ; rapidity and certainty are. 
 Telegrams of the post-card type were best consigned to the halfpenny post. 
 That kind of traffic is like hooking your freight train on to the passenger train 
 — it delays everybody and benefits nobody. There is, of course, an advantage 
 in having a very low tariff, the advantage, namely, of paying, say, sixpence for 
 what now costs a shilling ; but this is all. The talk about extending the bless- 
 ings of cheap telegraphy to the multitude is mere claptrap, and certain we are 
 that cheap telegraphy for the multitude who seldom really need it, will be the 
 reverse of a blessing to the people who put it to its legitimate uses, so long as 
 our telegraph system remains what it is.” 
 
 Comparisons. — In selecting, from the long list of securities dealt in 
 at the New- York Stock Exchange, a number of railroad stocks command- 
 ing the highest prices in the open market, it will be interesting to com- 
 pare their salient points with those of the Western Union Company. 
 Take, for instance, the stock of the Chicago and North-Western Rail- 
 road Company, which is quoted in the vicinity of one hundred and thirty, 
 while Western Union is quoted at the present writing at eighty-five, a 
 difference of forty-five per cent. On examination we find that the 
 
The Credulity of Unbelief. 
 
 27 
 
 total issue, stock and bonds, of the North-Western Railroad Company, 
 is eighty-seven millions, while that of the Western Union Company is 
 eighty-six millions of dollars. The gross revenue of the railroad is 
 seventeen millions as against sixteen millions for the telegraph company ; 
 the gross expenditures are in both cases about ten millions. But the 
 fixed interest charge which the railroad has to pay is about $3,800,000, 
 while the fixed charges of the Western Union Company are less than 
 $500,000. Consequently, the amount to be divided among the share- 
 holders by the railroad company is only about two and a half millions, 
 while the stockholders of the telegraph company may get over five 
 millions. An investment in the Western Union Company at the present 
 time pays seven and a half per cent., while an investment in the Chicago 
 and North-Western Company, at 130, pays less than five per cent. To 
 illustrate: A purchase of one hundred shares Chicago and North-West- 
 ern would cost $13,000, and, as an investment, would yield, say, $700 per 
 annum. The same revenue could be relied upon from the Western 
 Union Company by the purchase of one hundred and sixteen shares, 
 costing $9,512 ; or a less amount of capital invested by $3,488 with the 
 same revenue produced. Whether the Western Union stock is not just 
 as safe an investment, diffused as it is all over the country and based 
 upon a want just as urgent as that of transportation, with a service just 
 as efficient, as compared with a railway subject to local contingencies 
 and confined to but one region, the reader must determine. 
 
 Amplifying the comparison of corporations possessing capital and 
 issues similar in amount to the capital of the Western Union Company, 
 it is a fact that the gross revenue of but few of them exceed that of the 
 Telegraph Company, while, as a rule, the fixed charges for interest are 
 so great as to diminish materially the chances for profit to the common 
 stockholders. These fixed charges must under all circumstances be 
 paid, no matter how much the shareholders may suffer by deprivation 
 of dividends, to save their property from the perils of foreclosure. To 
 what extent the stock of railroads has been obliterated in the last decade, 
 and how dangerous is a heavy liability in the shape of bonds and mort- 
 gages and floating indebtedness, it is needless to recount. The motto 
 of the Rothschilds, u Never to trust a man who owes much,” may be 
 extended to the securities of some corporations. In this respect the 
 Western Union Company has a position almost unique in its freedom 
 from indebtedness, in view of the vast extent of its business, its area of 
 territory, and its large earning power. 
 
 The only other kind of stock comprehending in its operations almost 
 the entire country is that of express companies, and a comparison 
 between the rates prevalent for these stocks and that at which Western 
 Union is selling implies a want of appreciation which is very remarkable. 
 Thus, the Adams Express Company’s stock is quoted at 135 to 138 and 
 
28 
 
 A Talk on Telegraphic Topics. 
 
 Western Union at 85, a difference of fifty to fifty-three per cent., though 
 what there is tangible to make up the twelve millions of stock of the 
 Adams Express Company is much more difficult to designate than the 
 property, of the Western Union Company. The Express Company’s 
 main assets are horses, wagons, and office furniture, if an inventory of a 
 realizable character were to be insisted upon. But its ability to earn and 
 the contracts which it possesses are no doubt the attractions which make 
 the stock so safe, and sufficiently desirable to have it quoted at 138. 
 Why the Western Union should not be as well quoted, in view of the 
 enormous number of its contracts of equal permanence and value, and 
 based on a want just as imperative as express transportation, is a puzzle, 
 the existence of which is only attributable to the “credulity of unbelief! ” 
 
 Contracts. — Franchises of a value almost incalculable are pos- 
 sessed by the Western Union Company. Especially is this the case in 
 the contracts which it has with Railroad Companies, amounting, it is 
 said, to the number of nearly Eight Hundred. In almost all cases, these 
 contracts are exclusive in their character, and where this is not the case, 
 the arrangement is made so advantageous to the Railroad Company as to 
 leave no room for a disposition on its part toward a change. The 
 maintenance of the Telegraph lines by the Railroad Company is a con- 
 dition almost universal, while a free use of station-houses, light, fuel, 
 and frequently a division of the salaries of the operators, give to the Tele- 
 graph Company, not only business exclusive in its character, but at a cost 
 merely nominal. The surveillance of the lines by the frequency of ob- 
 servation permitted by the passing trains, and the necessity for their 
 proper maintenance, in order that the business of the railroad may be 
 done without disaster, insures the lines being kept in the highest pos- 
 sible state of efficiency. Aside from the economy of this arrangement, 
 the mutual advantages which spring from it in the transportation of 
 freight, employes, &c., and the profit that results from the business ac- 
 quired through the additional occupation of vast stretches of territory, 
 completely shut out the possibility of any successful competition. The 
 facility which the railroad contracts afford for the occupation of territory 
 which would not otherwise yield any profit is obvious. Hence, numerous 
 separate points which would not otherwise be reached because of their 
 remoteness, are made in the aggregate to contribute materially to 
 the receipts, while only in a very slight degree adding to the expenses. 
 Compared with the condition of competing lines, erected along country 
 roads, difficult to watch and expensive to repair, the possession of rail- 
 way facilities for telegraph property must be of inestimable value. 
 Placing on these contracts (which it would be impossible to duplicate) 
 the low-estimated value of $25,000 each, their combined worth would 
 be twenty millions, or one-quarter the entire capital of the company. 
 
Contracts worth Twenty Millions. 29 
 
 To show that the above estimate is not a high one, it may be said 
 that the contract of a great trunk-line running out of New York was 
 secured temporarily some time ago by an opposition Telegraph Com- 
 pany for $100,000 a year, or equal to a capitalization of $1,600,000 for 
 a single contract. This contract, however, was subsequently relinquished, 
 and, under an arrangement, the same is now in alliance with the West- 
 ern Union Company. 
 
 Among other valuable advantages not included under the head of 
 railroad contracts, is the right of way acquired and possessed all over the 
 country, but particularly the franchise of entrance into the various large 
 cities. This permission is yearly becoming of greater value, especially 
 in view of the agitation afoot for placing the wires underground, owing 
 to the multiplication of poles used by the numerous Telephone and Elec- 
 tric Lighting Companies and Private Lines. The question of wires and 
 poles in the streets is now of such vital interest that the franchises of this 
 nature possessed by the Western Union Company are of great and in- 
 creasing value. The problem of burying the wires is one they no doubt 
 will be prepared to meet as soon as its practicability is demonstrated. 
 Once accomplished, it will be, by its expensiveness, the most effectual 
 barrier possible to all future competition ; and, what is more, the public 
 can be made to pay for it by a slight advance on existing rates. 
 
 In addition to the contracts heretofore existing, a new and most re- 
 munerative class of these permanent arrangements has sprung up in the 
 rental of private wires to brokers, bankers, and others, and between 
 manufacturing establishments, commission houses, sales-rooms, etc. 
 These contracts are not only between such cities as New- York and 
 Chicago, Boston, Philadelphia, and Washington, but between other 
 similar contiguous localities, as Syracuse and Watertown, and besides 
 connections for the season, at high rates, between New-York and Sara- 
 toga, Newport, Long Branch, etc. The rates obtained for the use of these 
 special wires yield a very large advance upon cost, and make secure a 
 business which it is impossible to get away from the Western Union 
 Telegraph Company. Of course, it is always understood that a sufficient 
 advance to cover the cost of maintenance is obtained, in addition to any 
 possibility of profit on such business as would probably otherwise be sent 
 over the lines. The volume of revenue from this class of contracts alone 
 is very great, and increasing year by year to such an extent as to make 
 it a very prominent feature, and, obviously, it is a very permanent one, 
 which no competing line can interfere with. 
 
 CONCLUSION. — For the information of those who desire it, I have thus 
 given a very general view of the prominent features of the business of the 
 
30 
 
 A Talk on Telegraphic Topics. 
 
 Western Union Telegraph Company. There are certain points I have not 
 touched upon, which must be the subject of wider treatment. In order 
 to judge of the future of the property, it is necessary to look at its His- 
 torical aspects, which will be treated specially and distinctively. Inas- 
 much as the chief danger to be feared for the property is that resulting 
 from Competition, that subject requires more comprehensive treatment 
 than can be readily afforded it in this space. Hence, after due inquiry, 
 some remarks have been specially prepared upon both these subjects to 
 accompany this report. These all may be found in the following pages. 
 
THE RISE OF THE WESTERN UNION. 
 
 O those familiar with the rise and progress of the Western Union 
 
 1 Telegraph system, the implied limitations of the first word of the 
 title must be amplified by the full significance of the word “Union.” 
 To all intents and purposes, this organization is a “ Union of Com- 
 panies and Interests ” far more numerous and important than, in 
 any other known instance, is included within the circumscribed limits 
 of even the ordinarily elastic term “Company.” It is, in fact, a 
 “Zollverein” of telegraph interests, with results readily comparing, in 
 importance and magnitude of income, with some of the Commercial 
 Unions bearing that name, which exist between the nations of Europe. 
 
 If it were possible to accomplish a “Union of all Railroads” 
 of the country, and put the same under one management, the results 
 would not perfect a system of uniform and economical transportation of 
 passengers and freight so perfectly, as is accomplished in the matter of 
 uniform and effective communication by the Western Union. Indeed, 
 with some trifling exceptions, the entire system of railroad telegraphs is 
 already included in the comprehensive union of this great Telegraph 
 Company. The stock of a corporation or a “Union” owning, con- 
 trolling, and operating successfully all the railroads, without much 
 possibility of successful competition, and without limitation as to 
 charges, except such as good policy would imply, would be very 
 valuable stock. Yet it may be questioned whether the need of trans- 
 portation is any greater than the need of instantaneous communication, 
 for the one is founded on just as imperative a want of human nature as 
 is the other. Hence the shares in an organization which effectually and 
 successfully compasses almost the entire control of this means of com- 
 munication, in this progressive country, must necessarily be of increasing 
 value. The relative size of the capital employed in all the railroads, if 
 combined into one corporation, would be so vast, that when such a 
 comparison is made with what has actually been accomplished already 
 in combining almost all the telegraphs, it makes even the expanded 
 capital of Eighty millions of the Western Union sink into insignificance. 
 It is true that slender lines of wire, strung along poles, over vast areas 
 of country, with instruments and batteries placed in adventitious 
 
32 
 
 A Talk on Telegraphic Topics. 
 
 localities, offer but a meagre comparison with steel rails, expensive 
 stations, and costly locomotives and cars. But it is equally true that 
 the object sought by erection of the fragile lines of telegraph is just as 
 effectually accomplished, as the object for which the costly railroad 
 structure is undertaken. So that, while the needs of communication 
 are just as great as the needs of transportation, there is a larger profit 
 possible for the first, because the capital is small in proportion to the 
 result achieved, and because, being under one control, it can be 
 managed with effectiveness, economy, and without serious competition. 
 If there is wisdom, then, in investing largely in railway properties 
 widely scattered, costly, and managed by an infinite variety of capacity, 
 and exposed to all varieties of adverse local exigencies, surely there is 
 equal wisdom in possessing some of the shares of the property of the 
 sister interest, the Telegraph Company. Presenting its facilities at all 
 points throughout the country, it taps the purse of the public at a greater 
 number of places, and with more frequency, than that of any other 
 known organization, except that of the Government itself. No concern 
 so much resembles the Government in its comprehensiveness and the 
 completeness of its service, and, with the single exception of the Postal 
 Department, it might be claimed that, judged by the hourly require- 
 ments of business men, the general government of the country could be 
 much more readily dispensed with by them than could the Western 
 Union. 
 
 With this comprehensive claim before us, it is well to keep in mind 
 that the Western Union is really more a Union than a Company. To 
 show the record of how it came to exist, and of what elements it is com- 
 posed, some of the main facts regarding its rise and progress condensed, 
 from an article appearing in the public print, in January, 1 88 1, are 
 here given: 
 
 In the first place the Western Union Telegraph Company now includes more 
 than eighty different corporations, the charters and franchises of which it owns 
 and uses. The territory now covered by the lines of the company includes al- 
 most the entire inhabited portion of the Continent of North America. On the 
 eastern coast the lines extend from North Sydney, Cape Breton, on the Gulf of 
 St. Lawrence, to Brownsville, on the Rio Grande, and on the Western coast from 
 below Los Angeles, Cal., to British Columbia. They reach across the continent 
 from the Atlantic to the Pacific Ocean, along the entire length of the Union Pacific 
 Railroad, the Central Pacific, from Sacramento to Elko. They reach every State 
 and Territory in the Union, and by connection with allied companies supply 
 Canada, Nova Scotia, and New Brunswick. The lines also have an exclusive 
 connection with those in Newfoundland, on the one hand, and Mexico and Cuba 
 on the other, and with the Anglo-American Direct, French and American Cables, 
 make all Europe tributary. By the consolidations which have resulted in the 
 Western Union system, the means of communication have been greatly increased, 
 while between all the large cities and many of the less important towns a system 
 of direct circuits has been established which affords facilities for rapid and certain 
 communication at all times. Instead of several repetitions of messages between 
 
A Historical Retrospect. 
 
 33 
 
 the commercial centers of the country, as formerly, transmission is now in most 
 cases direct and instantaneous ; and the operation of this system over the territory 
 covered by the lines is fast assuming the certainty and uniformity of mechanism. 
 The company claim that not only has the public gained in time and in greatly 
 increased facilities by these consolidations, but has received also the benefit of 
 large reductions in the rates of both public and private dispatches. 
 
 The history of the “ Union of Companies ” is thus briefly told by M. 
 Guernsey, an attorney-at-law, whose familiarity with the subject is well 
 known : 
 
 In April, 1851, the New York and Mississippi Valley Printing Telegraph 
 Company was organized under the general laws of 1848 in New York State. 
 It was to continue in existence 100 years, and its authorized capital was 
 $360,000. One-half of the capital stock was to be issued to Royal E. House 
 for the exclusive right of constructing and using his patent printing telegraph, 
 and the other half was to be used to construct, complete, and put in operation 
 the line which Isaac Butts and Sanford J. Smith had already begun to put up 
 from Buffalo, N. Y., to St. Louis, Mo. The company was authorized to con- 
 struct a line from Buffalo to St. Louis via Cleveland, Columbus, and Cincinnati. 
 Under this organization the line was completed to Louisville, Ky., a distance of 
 600 miles. On January 20, 1854, by a resolution of the Board of Directors, the 
 capital stock of the company was fixed at $170,000, divided into shares of $100 
 each. The number of shareholders had increased to twenty-nine. A new certi- 
 ficate of incorporation was filed under the Laws of New York of 'June 29, 1853, 
 chapter 471. On March 30, 1854, the Company bought of the Lake Erie Telegraph 
 Company lines running from Buffalo to Detroit and from Cleveland to Pittsburgh, 
 about 600 miles in length. On November 1, 1855, the stock of the New York 
 and Mississippi Valley Printing Telegraph Company was consolidated with 
 that of the Erie and Michigan Telegraph Company, which owned a line from 
 Buffalo to Milwaukee, via Cleveland, Detroit, and Chicago. The line was 900 
 miles long and had about one thousand three hundred miles of wire. The capi- 
 tal stock of this latter company was $170,000, and the amount paid in was $145,- 
 400. On April 4, 1856, the name of the New York and Mississippi Valley 
 Printing Telegraph Company was changed by a special act of the New York 
 Legislature, chap. 97, to “ The Western Union Telegraph Company.” 
 
 The authorized capital of the company then was $500,000, of which only 
 about three-fourths had been issued. On August 19, 1858, the first scrip divi- 
 dend was declared, being 33 per cent, on $369,700, the amount of outstanding 
 stock. On September 22 of the same year, after the amount of the authorized 
 capital had been increased, a scrip dividend of 414 40-100 per cent, on the 
 capital stock of $485,700 was issued. Three more scrip dividends were issued 
 previous to the purchase of other lines by issuing stock. They were as follows : 
 July 16, 1862, 27 26-100 per cent, on the capital stock outstanding of $2,355,000; 
 March 16, 1863, 100 per cent, on the capital stock outstanding of $2,979,300, 
 and December 23, 1863, 33 per cent, on the capital of $5,962,600, increasing 
 the capital stock to $7,950,700. About January, 1864, an arrangement was 
 made for the purchase of the Pacific Telegraph Company, a corporation char- 
 tered in the State of Nebraska and authorized to buy, build, and operate a 
 telegraph line from some point within a Territory or State east of the Rocky 
 Mountains to San Francisco. Its capital was $1,000,000. The purchase was 
 effected by an exchange of the Western Union stock issued for that purpose for 
 the stock of the Pacific Telegraph Company, the amount being $1,277,210. 
 
 Up to this time the lines owned by the Western Union were all west of 
 Buffalo and the chief executive officers were at Rochester, N. Y. The next 
 purchase was that of the lines of the New York, Albany, and Buffalo Company, 
 
 3 
 
34 
 
 A Talk on Telegraphic Topics. 
 
 by an exchange of stock amounting to $600,000, and the purchase of the New 
 York and Washington Printing Telegraph Company in a like manner for 
 $146,500 followed. The stock needed for this purpose was all issued between 
 January 1, 1864, and May 16, 1864. The executive office remained in Roch- 
 ester until July I, 1866, when it was removed to New York City. 
 
 On May 11, 1864, a stock dividend of 100 per cent, per share was made, 
 which increased the capital to $20,133,800. The increase of stock from that 
 time to July 1, 1869, was as follows : 
 
 For Atlantic and Ohio Telegraph stock $833,400 
 
 For Erie and Michigan Telegraph stock 68,000 
 
 For House Telegraph stock 5,700 
 
 For Pemberton & Golden, Trustees, &c 3,800 
 
 For cash 77,000 
 
 For Western Union bonds 91,500 
 
 For Ithaca Telegraph stock 14,500 
 
 For California State Telegraph stock 164,700 
 
 For Syracuse and Binghamton Telegraph stock 4,900 
 
 For Missouri and Kansas Telegraph stock. ... 80,400 
 
 For United States Telegraph stock 3,885,200 
 
 For United States Pacific Telegraph stocks 3>333>3°° 
 
 For equalization of stock as per consolidation agreement 468,000 
 
 For fractions 55,ioo 
 
 For Trumansburg and Seneca Falls stock 3,500 
 
 For Hicks and Wright Repeater 1,500 
 
 For Lodi Telegraph stock 500 
 
 For American Telegraph stock 11,833.100 
 
 For Pittsburg, Cincinnati, and Louisville stock 4,100 
 
 This made the total capital stock $41,063,100 
 
 In January, 1870, the capital was $41,070,610, and in January, 1873, $41,073,- 
 410. It remained at that figure until the early part of last year, 1881, when the 
 capital was increased to $80,000,000 by the issue of $8,400,000 for the purchase 
 of the property of the Atlantic and Pacific Telegraph Company ; of $15,000,000 
 for the property and valuable franchises of the American Union, and $15,585,445 
 as a scrip dividend to represent the increased value of the property by exten- 
 sions and settlements by the Western Union shareholders. 
 
 No other telegraph companies than those above mentioned have been 
 directly purchased by the Western Union Telegraph Company by the issuance 
 of stock, but many of those named had previously consolidated with other com- 
 panies. This is especially true of the American Telegraph Company, which was 
 chartered by the State of New Jersey, and was organized in 1859 by a consolida- 
 tion of the following associations : The American Telegraph Company of New- 
 York, the New -York and Y/ashington Printing Telegraph Company, the 
 Magnetic Telegraph Company of New Jersey, and the New- York and New 
 England Union Telegraph Company. It also acquired possession of the 
 Maine, New Brunswick, Nova Scotia, Troy, and Canada Junction, Long Island, 
 St. John and Frederickton, and Richmond, Charlotteville, and Staunton lines, 
 and subsequently of those of the Cape Cod, Cape Cod Marine, Vermont and 
 Boston, Lynchburg and Abington, East Tennessee, Delaware and Hudson, 
 Philadelphia and Wilkesbarre, Susquehanna, Baltimore, and Ohio, Washington 
 and New Orleans, and Southwestern Telegraph Companies. The American 
 Company, in short, had followed in the eastern and southern sections of the 
 country a course similar to that pursued by the Western Union Company in the 
 west, and by purchase, consolidation, and construction, controlled lines extend- 
 ing along the Atlantic coast, and through the Mississippi and Ohio valleys. 
 
35 
 
 Uniformly Steady Growth. 
 
 In the purchase and consolidation of the telegraph companies the stock 
 issued by the Western Union was exchanged at various rates. The American 
 Telegraph Company received three of the Western Union shares for one of its 
 own shares, and in the exchange for the United States Telegraph Company 
 stock two shares of Western Union were given for three of the United States 
 Telegraph stock. For the United States Pacific Telegraph Company two shares 
 of Western Union were given for three of the United States Pacific stock. The 
 consolidation was regarded as complete on July 1st, 1866, when the principal 
 companies were united. Other companies have since been purchased and 
 leased, but have been paid for in cash or dividends. 
 
 The Company has also more than eight hundred contracts with railroad 
 companies for the use of the lines. 
 
 Among the many valuable patents which the company owns exclusively may 
 be mentioned the Page patent for the set screw and retracted spring, which is 
 regarded as the most valuable and useful mechanism in telegraphy ; Phelps & 
 Fanner’s printing telegraph, Steam’s duplex instrument for sending two mes- 
 sages at the same time over one wire, and Edison’s quadruplex instrument for 
 sending four messages over one wire — two messages each way — at the same 
 time. The Company also has a license to use the Colgate gutta-percha patent 
 for insulators for cables and wires. 
 
 The foregoing, synopsised in tabulated form as follows, shows at a 
 glance the growth in capital of the Western Union Telegraph Company, 
 with the yearly increase of Receipts and Profits for as many years back 
 as the figures are just now available. 
 
 
 Capital. 
 
 1856 .... 
 
 $500,000 
 
 7,963,000 
 
 1863 .... 
 
 1864 
 
 20,133,000 
 
 41,063,100 
 
 1869 
 
 1870 
 
 1871 
 
 1872 
 
 1873 .... 
 
 1874 .... 
 
 1875 .... 
 
 1876 
 
 1877 .... 
 
 1878 
 
 1879 ---- 
 
 1880 .... 
 
 41,073,410 
 
 1881 .... 
 
 80,000,000 
 
 1882 
 
 80,000,000 
 
 Receipts. 
 
 Profits. 
 
 
 
 $7,3 i 6,o°° . 
 
 . . $2,748,000 
 
 7,138,000 . 
 
 2,227,000 
 
 7,637,000 . 
 
 2,532,000 
 
 8,457,000 . 
 
 2,790,000 
 
 9 . 333 .°°° - 
 
 .. 2,757,000 
 
 9,262,000 
 
 2,506,000 
 
 9,564,000 . 
 
 .. 3,229,000 
 
 10,034,000 
 
 - - 3 . 399.000 
 
 9,812,000 
 
 3,140,000 
 
 9,801,000 
 
 -- 3 . 55 1 j°o° 
 
 10,960,000 
 
 4,800,000 
 
 12,782,000 
 
 5,883,000 
 
 14,293,000 
 
 5,908,000 
 
 16,000,000 
 
 6,500,000 
 
 Judged by its ability to earn, it does not seem as if the increase of 
 capital was greater than the business justified, especially as the results 
 for the current year will show. It is clear that a continuous investment 
 in the stock of this company has resulted in larger returns than in 
 almost any other property in the country. If this is so in the past, why 
 it should not be in the future it is difficult to say. 
 
 * Last quarter estimated. 
 
THE POSSIBILITIES OF COMPETITION, 
 
 W ITH a business so vast in volume, so extended in area, based 
 upon the supply of a want so universal, and yielding a return so 
 large, it is no wonder that competition in telegraphy is feared. The 
 first cost of the property being small, the right of way except along 
 the railway systems, easily secured, and there being but few impedi- 
 ments to the construction and working of lines rapidly built, it would 
 seem at first glance to make the possibility of numerous competitors 
 for the telegraph business more certain than in almost any other class 
 of enterprise. But what appears to be the greatest weakness of the 
 Western Union Company in this respect, is in reality its greatest 
 strength. For while it is true that almost every enterprise can be 
 duplicated, and competition is as certain as the sun, it is a singular 
 fact that in telegraphy it has never been permanently successful. The 
 numerous undertakings for the establishment of competitive telegraph 
 lines having been uniformly failures, and it yet remains to be demon- 
 strated that any company having for its object a division of the 
 business at a profit can succeed. In the nature of things this is impos- 
 sible , though at the first glance it seems easy. Two postal departments 
 could not succeed, and to establish two post-offices in 12,000 out of 
 the 14,000 localities where the Western Union is planted, would be a 
 most disastrous speculation for any competitor of the Government. 
 On the same principle two telegraph offices in 12,000 out of 14,000 
 towns would result in inevitable loss and disaster. The amount of money 
 realized in proportion to the cost of doing the business may be a large 
 sum in the aggregate for one company; but, divided, the profit is so small 
 in the great majority of towns that it means loss to both. The company 
 which has possession of the business, the facilities for doing it, and all 
 the connections which necessity, experience, and adaptability have called 
 forth, is the one most likely to succeed; while a new-comer, having to 
 reduce rates to create a trade, lacking the knowledge essential to its 
 promotion, and having everything to learn, is in the majority of cases 
 at a disadvantage fatal from the start. 
 
 The theory that the only profitable telegraphic business is that which 
 exists between the large cities is a most mistaken one. It is a popular 
 impression that duplicate lines between great centers cost but little, 
 
37 
 
 The Telegraph in the Household. 
 
 that the business thus controlled or divided is a prize worth struggling 
 for, and that the business of the Western Union Telegraph Company is 
 always exposed to serious depredations by constructions of this character. 
 However true this may be, as to the possibility of dividing the business 
 and lessening the profit of the Western Union Company thereby, it is an 
 undoubted fact that no profit is possible to any competitor for this class 
 of business. There is more expense attending the gathering in of such 
 business, its transmission and distribution, than that of any other 
 portion of the traffic of the telegraph companies. Take, for instance, 
 the single item of numerous branch offices in cities of import- 
 ance where the business is competed for. In New York alone there 
 are 150 branch telegraph offices, the maintenance of which costs in 
 round figures $100,000, which large sum obviously, largely goes to 
 reduce the profits on the business transacted to a very meagre amount. 
 The same condition of things exists elsewhere. In Philadelphia the 
 branch Western Union Telegraph offices number fifty-five; in Chicago, 
 one hundred; in St. Louis, fifty-five, and Cincinnati, twenty -two. An 
 intelligent and expensive operator is always a requisite at these points, 
 while frequently there are numerous employes of this class, with mes- 
 sengers, etc. In the four cities named there are 382 branch telegraph 
 offices sustained at a charge of over $300,000 per annum. This is for 
 the sole purpose of gathering in and distributing the business, very 
 much as lamp-post boxes gather in the letters on the corners of the 
 streets. Those who talk about opposition telegraphs between the great 
 cities must contemplate a similar tax before they can wrest it away from 
 the Western Union; and to pay this tax before the business is even 
 transmitted means the total annihilation of profit to the competitor. 
 
 On the other hand, the business contributed by the smaller towns, 
 where expenses are at their minimum, and where , as a rule, the business 
 is done on a commission , the profits are much greater, and although still 
 insufficient, when divided, to yield any return whatever to two companies, 
 in the control of one company, and in the aggregate, make possible a 
 good return. On the other side, if there is no profit, certainly there 
 is no loss, owing to the arrangement made. 
 
 Those, again, who contemplate the profit which arises out of the 
 business between the largest cities are misled by the large receipts at 
 these central points, and fancy these are all derived from business trans- 
 mitted from equally important points. A moment’s reflection will con- 
 vince the reader that this is not the case. The receipts at Chicago are 
 made up of ten thousand messages from a thousand points outside of 
 such cities as St. Louis, Milwaukee, or Cincinnati. The messages which 
 reach New York by the hundred thousand come from all quarters of the 
 continent, beside Boston, Providence, Philadelphia, Washington, 
 Chicago, or other great cities. To control the traffic concentrating in 
 the great centers presupposes the existence of facilities at every point, 
 
38 
 
 A Talk on Telegraphic Topics. 
 
 which under existing circumstances of preoccupation by the Western 
 Union is a financial impossibility. 
 
 The probability of the construction of competing lines to more than 
 2,000 places out of the 14,000 localities occupied by the Western Union 
 Company is very slight indeed. No sane man, or body of men, would 
 think of expending money for the construction of lines to places that 
 could by no possibility pay expenses of operating. Capital is too timid 
 to be tempted into such undertakings. There are only 1,500 towns in 
 the United States with populations of above 2,000, and it is doubtful 
 if any town with a population of less than this number could support two 
 telegraph offices with profit, or to any better advantage than it could 
 support two post-offices. Estimating the number of towns capable of 
 supporting two telegraph offices each at 2,000, there are left some 12,000 
 places in the sole possession of the Western Union Company, and as 
 likely to be exclusively occupied by them for all time as they are likely to 
 be served by one post-office. The revenue derived from these 12,000 
 places, when reaching a common reservoir, becomes enormous ; though 
 the contribution of each is small, — they are like rivulets to the streams, 
 and the streams which contribute to the river, — they go to swell the 
 volume of the returns which flows continuously into the Western Union 
 coffers. Among the numerous crazy schemes with which the history 
 of the telegraph abounds, none have been so crazy as to contemplate 
 the construction of a system , at all equal in extent or comprehensiveness, 
 to that now possessed by the Western Union Company. 
 
 This system, too, has found an indefinite extension by the appliance 
 of the telephone, the companies using the existing patent rights on that 
 wonderful invention being allied exclusively with the Western Union 
 Telegraph Company. Thus, small towns in which telegraph offices 
 are located, centers for numerous villages adjacent, are placed in 
 communication with these outlying districts by a telephone attachment 
 at the ear of the operator. Messages are now transmitted by the 
 telephone to and from the telegraph office from localities three times 
 as numerous as were within reafch three years ago. Hence the 
 Western Union Company, instead of having only fourteen thousand 
 offices, with which immediate communication can be had, have now 
 practically thirty thousand, and in a very short time will have fifty 
 thousand distinct localities, practically inaccessible to any other line or 
 system. It would be impossible to conceive an undertaking more com- 
 prehensive and more complete in its details for gathering together 
 the threads of communication all over this vast country. Even now, 
 with the telephone yet in its infancy, there is hardly a suburb attached 
 to any city but shows many private houses and manufactories directly 
 connected by the telephone with the telegraph office, and this con- 
 nection is solely with the Western Union lines , so that the facility of 
 
Competition — A Fallacy and a Blunder. 39 
 
 communication by residents of every outlying locality, however remote 
 or insignificant, is just as great as if each lived next door to a telegraph 
 office. All this is without expense to the Western Union Company, 
 who, in fact, participate in the profits by their large royalty interest in 
 telephone patents and companies. To think for a moment that any other 
 telegraph company can ever approach this organization in the complete- 
 ness of its facilities for communication with localities, business establish- 
 ments, and even private residences, is to imagine a success beyond the 
 dreams of the most sanguine, even among that class of visionaries so 
 numerous in telegraph circles. In fact, it would seem almost as if the 
 Western Union Company had a greater share of the control of the 
 mysterious electric current at its disposal or command than any and all 
 the other organizations in the world. With the wisdom and enterprise 
 which have thus far marked its career, no other company can deprive the 
 Western Union of the immense advantages it has secured, or its pro- 
 prietors of the profits sure to result to them in the future as in the past. 
 
 Every business man will recognize the fact that good management is 
 the basis of all commercial success. It is only by a miracle that a busi- 
 ness, even of a restricted character, can make any satisfactory or profit- 
 able progress which lacks skillful and judicious management. But 
 when the business attempted is of an extended and well-nigh universal 
 character, covering thousands of miles of territory, with numerous em- 
 ployes and a corresponding possibility of shortcoming, no one can for an 
 instant imagine that success is probable, unless the highest degree of 
 business ability is secured. Experience, which in telegraphic busi- 
 ness is so essential to success : expert knowledge, which is a necessity 
 to its conduct, and, above all, the development of capacity, rare in all 
 walks of life ; these three qualities are more needed in this business than 
 in almost any other ; yet they are the least available for outside tele- 
 graphic enterprises. It is safe to say that, with one or two exceptions, 
 the opposition telegraphic enterprises of the past have contained fewer 
 elements of success, so far as business capacity is concerned, than almost 
 any other business experiments that could be named. This absence of 
 capacity accounts as much for the want of success of these enterprises, as 
 the other almost insuperable obstacles they have necessarily to en- 
 counter. In the Western Union Company the highest degree of ability 
 obtainable in telegraphic circles is to be found. A judicious liberality 
 in the remuneration and promotion of officials has been observed, and, 
 although the operations of the Company — their extent, magnitude, and 
 character — resemble very much those of a government, the remuneration 
 of the employes, and the chances which are given them of advancement, 
 resemble more those of a private enterprise than the opportunities usually 
 presented by any Government. At any rate, it commands, in a greater 
 degree than any similar organization, the services of the highest class 
 
40 
 
 A Talk on Telegraphic Topics. 
 
 of men best adapted to the promotion of its interests; and a long period 
 of experimental business would be necessary for any other company to 
 attain to anything like equal perfection in its staff of employes at a 
 price permitting anything like a profit. It is true that by the promise 
 of high salaries, long engagements, large business, and the like, em- 
 ployes are, from time to time, seduced into new undertakings to a 
 limited extent; but the frequent failure which has come to all such en- 
 terprises, and the eventual loss of time, employment, and money incurred 
 through forsaking the old company, is yearly causing the Western Union 
 staff to be more conservative and cautious in what they do. It would 
 require a very large amount of brilliant promises, backed by a good deal 
 of absolute money advanced, altogether out of proportion to the possi- 
 bility of profit under competition, to get possession of a staff of men 
 competent to carry out anything like a successful programme of op- 
 position to the Western Union Company. 
 
 In truth, the Western Union Telegraph Company may be more 
 aptly compared to an Army of Occupation than almost any other organ- 
 ization in the country. Presided over by a General of experience and 
 renown, its employes are a host distributed in ranks and divisions, and in 
 a possession of the country more complete than could be otherwise 
 acquired, except by peaceful acquiescence following upon necessity, use- 
 fulness, and efficient service. No competing company could supplant 
 it or lessen its hold upon vast portions of its territory, so completely 
 preoccupied. To believe so would be to believe that capital could be 
 turned into channels utterly unprofitable, unsafe, and disastrous. One 
 might as well try to induce water to run up a hill. New inventions of an 
 experimental character, such as automatic systems and postal telegraph 
 devices and the extension of telephonic facilities, may threaten the com- 
 pleteness of the grasp which the Western Union Company has upon 
 the power of instantaneous communication in this country, but until 
 there is some better evidence of ability to compete, with profit, with the 
 perfection of system attained by this company, no fear need be enter- 
 tained but that it will retain its capacity to earn in larger proportion 
 than almost any other enterprise in the country. 
 
 There is hardly any investment outside of one’s own control but 
 what is exposed to competition from duplication, from inventions, or 
 from the discovery of hitherto unknown forces. But it may be claimed 
 for the Western Union Company, with its long career of success, the 
 enormous amount it has earned and paid to its share-holders, and, above 
 all, the large space it fills, daily and hourly, in the commercial and 
 social fabric of the country, that it has certainly a basis of safety in the 
 future for a success equal to that achieved in the past. 
 
 Suppose that the Western Union Company, as is now said to be the 
 case, decides that it will absorb no more opposition telegraph enterprises. 
 
Prospects of Opposition Poor. 
 
 41 
 
 What is to become of undertakings of this character? The hope that 
 they will be taken in is the basis for numerous opposition enterprises; 
 but that hope abandoned, what likelihood is there that capital will be 
 induced in this direction with any possible prospect of profit, in view 
 of the fact, now notorious, that every individual opposition enterprise 
 heretofore inaugurated has resulted in loss. If there is no prospect of 
 profit by absorption, or by continuing the business, what is to 
 become of opposition telegraph lines ? The capital invested in 
 them can never be recalled or repaid. The money is scattered in 
 poles and wires along the post-roads of the country, and is as effect- 
 ually lost as if it were cast into the sea. The property could not be 
 sold for one-tenth of its cost ; the poles could not be dug up and used 
 except for firewood and fence-posts ; while the wire, after years of 
 exposure, is only fit to be sold to farmers’ wives for clothes lines or inclos- 
 ures. In fact, the lines may become a serious charge, for unless 
 maintained as long as they exist serious damage may result to people 
 along the roads by falling wires and poles, and actions for damages 
 against share-holders for want of due diligence in care of the property 
 must prevail. 
 
 A favorite mode for the promotion of new telegraph schemes of late 
 years has been to issue bonds, and to use the money derived from the 
 sale thereof for the building of the lines. Of all the securities with which 
 the market has been tempted there is nothing so weak as a telegraph 
 bond, unless, indeed, it is based upon a business already developed. 
 The value of the property, unless based upon an earning power, is at 
 best but small ; it is widely diffused and utterly unrealizable, and unless 
 there is a certainty of business success, there is a sure prospect of 
 loss of interest, and an equal prospect of loss of principal. To expect 
 that interest will be paid by an opposition telegraph company, when thus 
 far not one has paid even its expenses, is to imagine what may be 
 regarded as an impossibility. It is true that some telegraph organiza- 
 tions already existing, having sole possession of a limited field, may 
 have bonds that are desirable. But a security of this kind, forming the 
 basis of a competitive undertaking, in a business which can by no pos- 
 sibility pay the expenses of two concerns, is an investment of so venture- 
 some a character as to deter prudent well-informed men from making 
 it. Any opposition telegraph company, handicapped with an interest 
 account which a heavy-bonded indebtedness implies, absorbing a great 
 proportion of its revenue, has a hopeless prospect indeed. If competi- 
 tive telegraphy is to be built up by the issue of bonds, based upon 
 little else than thin air, the chances of its success are more uncertain 
 than ever ; and the possibilities of serious results to the Western Union 
 Company, in possession of the territory, are more than ever remote, and 
 its stock proportionately safe from this, its only great danger. 
 
CORRESPONDENCE RESUMED. 
 
 Pittsfield, Mass., June 2d, 1882. 
 
 My dear Mr. Richards : I have read with very great interest the documents you 
 have sent to me regarding the Western Union Telegraph Company, prepared 
 with such evident care and knowledge of the subject, by your friend, for his cor- 
 respondents in England. Some ideas which have never before occurred to me 
 have been developed, and were it not that the whole production is tinctured with 
 a degree of special pleading on behalf of the Western Union Company, I should 
 be convinced that the property was a most desirable one to hold some shares in. 
 Notwithstanding the fact, however, that the evident bent of your friend is in favor 
 of this Company to such an extent that it would almost appear as if he was in their 
 interest, yet in the points he has made I do not readily see how many of them 
 can be controverted, or the conclusions which inevitably follow their admission 
 be put out of sight. I wish you would convey to him my thanks for the infor- 
 mation he has developed, because I believe that he merits some acknowledgment 
 for the industry and skill he has displayed. 
 
 Notwithstanding, however, all the favorable conclusions which would follow 
 the points thus far presented on behalf of the Western Union Company, there 
 are still a number of troublesome questions which one encounters, and which 
 it would be most desirable to have answered. These questions come to me 
 from various quarters, and are mostly those which I got when talking with 
 brokers or friends who come into contact with them in Wall street. These 
 points seem to be the stock in trade of a class of operators in the Stock Exchange 
 who, either from a disposition to decry the Western Union Company, or a hope 
 that they being “ short ” of the stock are on the right side of the market, are dis- 
 posed to criticise and depress the value of the property. I believe, so far as I 
 can gather, that there is more antagonism to this stock among brokers, room- 
 traders, and operators generally in Wall street than to almost any other on 
 the list. Indeed, so much is this the case that to take advice in this quarter 
 would be to destroy one’s confidence in almost any investment that can be 
 named at present quotations. But especially is this the case in regard to 
 Western Union. It is possible that the talk of myself and friends has been 
 with those who are called “ bears,” and whose whole disposition is to depreciate 
 the condition of the country, and especially to quarrel with the existing values of 
 stocks, no matter how productive or promising they may be. The influence of 
 the points raised by this class is so great, however, that before deciding upon any- 
 thing I should like to lay before you a few specific queries, which perhaps you 
 can explain. I will inclose in this letter a number of questions, with blanks 
 after each, which if you like you can have answered and returned to me at your 
 
Mistaken Mentors. 
 
 43 
 
 convenience. My friends and myself will then come to some conclusion regard- 
 ing a considerable investment in Western Union, which may have a good 
 deal of influence upon others in our locality. The stock at its present price is 
 extremely attractive, even for speculative purposes, and if your friend’s conclu- 
 sions, or anything like them, are to be relied upon, I should like to be able to 
 decide, before any considerable advance is established, so as to get the advantage 
 of any rise in price, which, as the crops promise well and other circumstances 
 seem so favorable, may take place at any moment. 
 
 I am, truly yours, G. Francis Barker. 
 
 New York, June 6th, 1882. 
 
 My dear Mr. Barker: Yours of the 2d inst. is received enclosing me some 
 questions regarding the Western Union Telegraph Stock, to which you desire 
 answers. I have not had time myself to give the matter much attention, but I 
 placed the questions in the hands of a well-posted party, somewhat of an operator 
 in the Street, and generally familiar with matters in that direction, though at the 
 same time not unduly under the influences which prevail in that quarter. I am 
 not qualified to confirm or deny all the answers given, so you must take the con- 
 clusions he arrives at for what they are worth. 
 
 I am not surprised that you should be puzzled at the conflicting stories you 
 hear about Western Union and other stocks from Wall street. As a center of 
 information, it is the most uncertain place in the world. The silliest rumors find 
 credence, and the more sensational the story the quicker it is circulated, regardless 
 of its truth. The beliefs or the disbeliefs of the average street operator, as to the 
 worth of a stock, are of no value whatever as against facts accessible to any intelli- 
 gent investor. To what extent stock-brokers themselves are beguiled you will 
 j udge when you are told that fully a hundred members of the Exchange, some weeks 
 ago, caught eagerly at “ points ” put out by some shrewd oil dealers, that there 
 soon would be a great rise in petroleum. Stock -brokers know that petroleum is 
 “ a perfume by day and a flame by night,” but beyond this their information 
 must have been of the slimmest kind, for they purchased heavily of “ crude certifi- 
 cates” at seventy-nine cents per barrel, in tanks, which are now worth only fifty- 
 one cents, a decline of over twenty-five per cent, in less than thirty days. If, on 
 the day this oil was bought you had asked which was the most desirable invest- 
 ment, Western Union Stock at eighty-one or oil certificates at seventy-nine, the 
 latter would have been pressed assiduously upon you, notwithstanding the fact 
 that oil earns no interest, and of necessity rather diminishes than increases, and is 
 the most uncertain of products ; yet investment therein would have been urged 
 rather than in Western Union, paying promptly a liberal return by efficiently 
 fulfilling a want in the community essential to its existence. I mention this only 
 to illustrate the quality of wisdom which prevails on Wall street, among those 
 who glibly discourse about the value of something they know just enough about 
 to learn that “ a little knowledge is a dangerous thing.” 
 
 Hoping soon to hear from you again, and reminding you that the condition 
 of the market continues favorable to a purchase of various stocks for investment 
 purposes, I am, truly yours, 
 
 John Richards. 
 
QUESTIONS PUT AND ANSWERED. 
 
 Question No. i . — How do you explain the fact that the Western Union Tele- 
 graph stock is quoted so low as 82 to 85 for 100 par value, while at the same 
 time it is earning and paying a cash dividend, at the rate of six per cent, per 
 annum ? 
 
 Answer . — Because of the largeness of the capital, eighty millions, and the 
 supposed prevalence of “ water” in it, and because there is always a large 
 amount of it on the market, which the investment demand has not absorbed in 
 anything like the proportion which the merit of the stock from its profitableness 
 would seem to warrant. The vast majority of the investment public seem never 
 to have understood the safety, permanence, or productiveness of this stock, 
 blinded probably by the fear of competition and future complications, arising 
 from the operations of large owners of the property, and a general want of 
 knowledge of its earning power and real worth. It is said, however, that in 
 this respect there is a very material change, and that purchases to a very con- 
 siderable extent have been made within the last six months for permanent hold- 
 ing, by parties who have satisfied themselves of the increasing value of the 
 property and its earning powers. Doubtless, the facility with which the capital 
 has been increased from very small sums to eighty millions, has had an influ- 
 ence, and fears are perhaps entertained that by some other similar operations, 
 the existing quotations might be lessened and the property depreciated. But 
 bearing in mind the fact that all permanent holders of Western Union Stock 
 have been hitherto immensely benefited by these continuous processes of enlarge- 
 ment of the capital, there seems now no reason to fear but that a similar advan- 
 tage would flow to those who become possessed of it at this moment, if any 
 further amalgamations should be forced upon it, which, by those familiar with 
 the subject, and authorized to speak, is considered extremely doubtful. 
 
 Question No. 2 . — Have the quarterly dividends of $1,200,000 which have been 
 paid, being at the rate of six per cent, on eighty millions, been actually earned 
 by the company, or have assets possessed by it been disposed of to make up the 
 deficiency ? What special significance was there in the determination expressed 
 in the quarterly report made in March, wherein it was stated that hereafter ail 
 extensions should be paid for out of properties acquired and on hand, leaving 
 all the earnings to be made available for dividends. 
 
 Answer . — The statistics of the company for a number of years indicate a 
 growth in the receipts over expenses quite ample to pay the annual six per cent, 
 dividend of $4,800,000. Even prior to the enlargement of the capital from forty 
 
45 
 
 Questions Put and Answered. 
 
 one to eighty millions, the receipts over expenses implied an ability to pay divi- 
 dends quite equal to that now demanded. Thus, in 1879, the receipts were 
 $10,960,000, expenses $6,160,000; profits $4,800,000. In 1880, receipts were 
 $12,782,000, expenses $6,948,000; surplus profit $5,834,000. In 1881, the first 
 year with the increased capital, the receipts were $14,393,000, the expenses 
 $8,485,000 ; surplus profit $5,908,000. This year the receipts will, it is esti- 
 mated, be $16,000,000, and expenses about $9,000,000, surplus about $7,000,000, 
 while only $4,800,000 is required to pay a dividend of six per cent. It there- 
 fore seems impossible to get away from the fact that the concern is earning 
 enough to pay easily the amount it is accustomed to divide among its share- 
 holders. 
 
 With regard to paying for extensions with assets on hand, the explanation 
 is that the company had become possessed of a very large amount of various 
 properties which was yielding it only a small return, and it was thought that a 
 sale effected at a large advance upon cost and the investment of the proceeds 
 on its own property would result much more satisfactorily than if these outside 
 assets were held continuously in their present condition. The wisdom of the 
 decision has never been questioned by those familiar with the subject. The 
 board of directors who passed upon it, and who are possessed of so much sagacity 
 and knowledge of business, would hardly consent to an arrangement of the kind 
 unless it possessed the merit of being the best step possible for the interests of 
 the stock, of which they themselves as a body hold the largest proportion. 
 
 Question No. 3 . — Why is it necessary, in order to pay a dividend of six per 
 cent., that the revenues of so large a portion of each quarter should be estimated ? 
 Thus, the quarterly reports seem to read something like as follow : “ The first 
 month we know what we earned ; the first half of the second month we are 
 pretty sure of, and the other six weeks we guess at, and therefore we declare a 
 dividend. ,, If the distribution of so large a sum as $1,200,000 is to be the result 
 of guess-work, might the guess not be on the wrong side, and the dividend an 
 error ? 
 
 Answer . — In view of the fact that the money received by the Western Union 
 Company is taken in at fourteen thousand distinct and different points, of course 
 it is an impossibility that accounts should all be at hand within fifteen days after 
 the close of the quarter. But as the business is a purely cash one, and the money 
 is almost all actually received before the accounts can be closed, there seems to 
 be no good reason why it should not be divided. It would certainly be much 
 more satisfactory to share-holders to know that the money in hand is thus 
 promptly distributed, if all indebtedness is paid, rather than it should be left 
 exposed to such risks as are incident to the care of such large sums. The dis- 
 position to divide promptly is not usually criticised unfavorably ; while a dispo- 
 sition in the opposite direction would be open to very serious objection. 
 
 Question No. 4. — In how far are the interests of the share-holders of the 
 Western Union Company jeopardized by the possession of the largest individual 
 share of the property by Mr. Jay Gould, in view of the fact that he also has the 
 largest share in the Mutual Union Telegraph Company? Is it not likely that, 
 having made vast sums of money out of encouraging opposition enterprises, 
 and then selling them out to the Western Union at a great advance over and 
 
46 
 
 A Talk on Telegraphic Topics. 
 
 above their original cost, he may be inclined to repeat this operation indefinitely, 
 especially now that the Mutual Union is practically within his control ? 
 
 Answer . — The fact that Mr. Jay Gould owns from twenty- three to twenty- 
 five millions of Western Union stock, which, perhaps, is nearly one-quarter of 
 his entire worth, ought to be an element of strength rather than of doubt. Were 
 he entirely out of the property, and ranged in opposition to it, controlling as he 
 does such a vast network of railway lines, his hostility would be formidable. 
 Being interested to so large an extent in the conservation of the property, and 
 the increase of its earning power ; convinced as he must be of the genuineness 
 of its value as effectually performing most essential services to meet the most 
 imperative want of the public of this vast country, it seems incredible that he 
 should do otherwise than maintain the integrity of its position by all the means 
 in his power. Such a temptation as he might have to unload his large holdings, 
 and then depress the stock, would probably defeat itself in the attempt, and cause 
 him to lose more than he could possibly make by any process of absorption of 
 other companies which may be attributed to him. He has taken the pains to 
 surround himself with a very remarkable combination of Directors, Managers, 
 and Assistants of the highest class. Those who watch narrowly his daily actions 
 and his continuous interest in the details of the business, and the benefit which 
 his shrewdness and comprehensive grasp has contributed to it, are perfectly con- 
 vinced that among the numerous interests he has acquired, there is none which 
 it is more his intention to cling to and protect than the Western Union Telegraph 
 business. According to the public showing made some time ago, he held $23,000,- 
 000 of this stock, which, at present, yields him an income of $1,380,000, and, with 
 such extension and growth as are likely to take place, it may soon yield him $2,000,- 
 000 per annum. It is an open question in what possible security he could invest 
 anything like this amount of money to get so certain and so ample a return, so 
 that his interest, if nothing else, makes his possession inure to the benefit 
 of all the other share-holders. As to the Mutual Union Telegraph Company, 
 Mr. Gould certainly knows as well as those who have closely observed that 
 enterprise, that there are most serious irregularities in its organization, which, 
 according to eminent legal authority, cannot be cured. He also knows that 
 while five millions of money have been taken from the public, in the sale of 
 bonds, less than three millions have been spent on the construction of lines, so 
 that two millions remain to be accounted for by some process of discovery yet 
 to be developed. It is true that this discovery is not likely to be aided by the 
 election to the Presidency of the Contractor who disbursed the money ; nor by 
 the election to the Vice-Presidency of the Banker who enticed it from the public, 
 and is supposed to have paid it to the contractor ; nor by the selection, for Gen- 
 eral Manager, of a gentleman, not because he knows anything about telegraphy, 
 but because he is the contractor’s partner. But all these circumstances are con- 
 tributory to the process of illustrating how easy it is to manage an opposition 
 telegraph company in its early stages, and how effectually it may work out its 
 fate if only let alone. 
 
 In addition to this remarkable issue of bonds of five millions on an expendi- 
 ture of three millions, there has been issued ten millions of stock, a basis for 
 which there seems not to be a vestige of value. It is true that many other 
 concerns have stock and bonds issued far in excess of what they may have cost, 
 
Questions Put and Answered. 
 
 47 
 
 but they all possess more or less earning power, while with the Mutual Union 
 Telegraph Company, as indeed with nearly all opposition telegraph enterprises, 
 the losses commence at the day of opening and never cease ! The Mutual 
 Union Company is loaded with an indebtedness, at the start, the interest upon 
 which is nearly $1,000 per day for every working day, while its expenses of 
 management, excessive salaries, rentals, and other charges are out of all propor- 
 tion to the extent and character of its business. The expenses must far 
 exceed the income. With the knowledge Mr. Gould possesses of opposition 
 enterprises, and how singularly unsuccessful they have been, how he could seek 
 to make anything of Mutual Union as claiming absorption by Western Union 
 passes comprehension. The interest which he possesses in the stock, and which 
 he bought for a mere song, was a purchase on behalf of the Western Union 
 Company, so that the possibility of cutting rates could be avoided, and extensions 
 further into fields profitable to Western Union prevented. Presupposing the 
 interest in the Western Union of Mr. Gould to be maintained, even to the extent 
 of one-quarter of his present holding, by no possibility could his operations be 
 otherwise than favorable to it, both as regards his assistance in promoting the 
 business, and with respect to such control as he may possess in opposition 
 concerns. 
 
 Question No. j . — What probable influence will the various competitive 
 enterprises have upon Western Union earnings, such for instance as the Balti- 
 more and Ohio, the American Rapid, the Banker’s and Broker’s, the Mutual 
 Union, and the Postal Telegraph Company, just inaugurated? Are not these 
 enterprises likely to seriously diminish the receipts and profits of the old com- 
 pany, even if they achieve no permanent success ? 
 
 Anszuer . — There probably never will be a time when opposition telegraph en- 
 terprises will cease. But whether the time will ever arrive when they will suc- 
 ceed is a question which careful observers will not hesitate to promptly answer 
 in the negative, judging by the experience of the past. All the elements of 
 success possible to any opposition enterprise were possessed by the Atlantic and 
 Pacific, and by the American Union Companies. They had all that could be 
 secured by influence, ability, railroad connections, popular regard, and an un- 
 limited supply of money. But the fact is, the revenue of neither of these enter- 
 prises ever approached the expenditure necessary to carry them along. Although 
 they may have injured the receipts of the Western Union Company the progress 
 of the business of that concern was such that the inroads of these two ably con- 
 ducted competitors were never felt and dividends were continuously earned and 
 paid, and the property extended in area and increased in value, just as if these 
 opposition companies had never existed. What better chances or elements of 
 success the new enterprises have which are now before the public it is most 
 difficult to discern. Largely experimental, limited in area, loaded down already 
 with obligations, nothing need be feared from them in the shape of serious oppo- 
 sition by the Western Union Company. 
 
 Question No. 6 . — What significance had the recent quarrel with the New 
 York Associated Press as to any possibility of a serious breach between the 
 Western Union Company and the press generally? 
 
48 
 
 A Talk on Telegraphic Topics. 
 
 Answer . — According to the last annual report of the company, the revenue 
 from the press of the country was over $1,000,000, or 8 per cent, of the entire 
 receipts. Of the amount the New York Associated Press paid less than one 
 hundred thousand dollars, while the balance was contributed by other associations, 
 and direct payments from individual newspapers for special dispatches, etc. By 
 no possibility could any considerable portion of this revenue be diverted from the 
 Western Union Company, for the reason that no other organization anything like 
 covers the area necessary to produce it. If the news could be gleaned from a 
 few points only, then it might be possible, but the public must have news from 
 all sections where events are possible, and where are they not ? If the Western 
 U nion Company desired to go into the news business itself, and employ its operators 
 to gather items of news, and make a profit thereon, retailing the information at 
 every center of importance, it could make a sum vastly greater than it now receives 
 from its press service. That it possesses facilities for this profitable undertak- 
 ing in its widespread operations, its cable connections and other advantages is 
 apparent. But it is unnecessary that this should be done at present, as an 
 arrangement which has been recently made between the Western Union, the 
 New York Associated Press, and the other associations covering the entire 
 country, is of such a character that no danger need be apprehended from this 
 source. On the contrary, the result of the recent negotiations is likely to be a 
 largely increased and permanently profitable revenue from that source and con- 
 fined to it exclusively. 
 
 Question No. J . — Is it not a fact that the Western Union Company has 
 undertaken obligations of a very onerous character in connection with the Amer- 
 ican Cable Company ? It is alleged that the Cable cost to the construction com- 
 pany less than seven millions, and that in handing it over to the Cable Company 
 the capital was doubled and made fourteen millions, and that the Western Union 
 was compelled to take it over at this inflated amount, and pay five per cent, there- 
 upon, or $700,000 a year, upon what really only cost seven millions, or equal to 
 ten per cent, on the real investment. 
 
 Is it not true that in leasing the Gold and Stock Telegraph Company and the 
 Cuba cables, in guaranteeing the Canada telegraph share-holders a large inter- 
 est, equally onerous obligations have been assumed ? How about its alliance 
 with the American District Telegraph Company ? 
 
 Answer . — The facts regarding the leasing of the American Cable Company 
 are that, owing to the pooling of the cables and the proportion of receipts allot- 
 ted to the Western Union, it will be placed in possession of a revenue of 
 $1,100,000 a year, while the interest and cost of operating account will not exceed 
 $800,000, so that there appears to be a clear profit, even with the present vol- 
 ume of business, of $300,000 a year. 
 
 With regard to the Gold and Stock Telegraph Company, nothing can be 
 more important to the Western Union than the control of the vast business of 
 selling the market reports throughout the country, and the profit, over the six 
 per cent, payable to the Gold and Stock Company, is not only considerable, but 
 the quotation business is being made constantly larger and more profitable by the 
 free use of the facilities of the Western Union Company. The Cuba cable 
 already pays a large return over and above the guaranteed amount, and instead 
 of there being cause for apprehension regarding the three contracts referred to 
 — viz. : the American Cable, the Gold and Stock Company, and the Cuba Cable 
 
Questions Put and Answered. 
 
 49 
 
 — there is a certainty of a real gain of probably $750,000 a year, while the com- 
 plete and exclusive control of the business to the land lines connected with the 
 cables, and the business arising out of the enormous sales of quotations of the 
 products of the world, it is obvious, is of immense importance. 
 
 With regard to the guarantee of eight per cent, to Canadian telegraph stock- 
 holders, the whole sum indorsed is a little over $200,000; and so far from being 
 a cause of criticism may be considered one of the most satisfactory operations, in 
 a small way, ever consummated. There is hardly any possibility of the guaran- 
 tee ever being called for, while in compensation for giving it the Western Union 
 get one-half the profits of the entire Canadian system over the interest paid, 
 which, in view of the satisfactory arrangements made by the Canadian Parlia- 
 ment, are likely in time to be considerable. Meanwhile, they are assured an 
 exclusive connection and profit from a rapidly growing business, an absence of 
 competition springing from that quarter, undisturbed possession of those impor- 
 tant land lines, running through Canadian territory, connecting with the cables, 
 and other advantages only possible to an alliance such as they have made, and 
 which they are cementing by liberality and good neighborhood. 
 
 The same mutual advantage may be said to exist in the connection recently 
 formed with the American District Telegraph Company. While this will 
 afford the opportunity of important economies to the Western Union Company, 
 owing to the magnitude of its delivery business, the use of its vast facili- 
 ties will give to the District Company an earning power adequate to make it 
 yield a liberal return on its capital, increasing its efficiency and permanency 
 against all comers. 
 
 Question No. 8 . — Is it not a fact, that the moment the price of Western 
 Union advances the market is deluged with the stock by Mr. Gould and other 
 heavy holders, for the purpose of realizing money on what has cost them very 
 little in the shape of hard cash ? Is it not true that the possibilities of an advance 
 in the quotable value of the stock is entirely out of the question, so long as the 
 market is exposed to this deluging process ? 
 
 Answer . — There is no justification for the belief that Mr. Gould desires to un- 
 load his large holdings of Western Union, which at the recent public showing was 
 about twenty-three millions of dollars ; but, supposing he should sell largely, 
 what he could do with the proceeds that would pay him better, or be more safely 
 invested than it is now, is difficult to indicate. Certainly, government bonds or 
 high class railway securities would have no attraction in comparison as a money- 
 making operation, because of the high price and the consequent low interest. 
 But even supposing that he and other large holders were to sell every dollar they 
 possess, what possible difference would that make in the earning power of the 
 property itself? The change of the proprietorship of the stock does not obliterate 
 the poles, or the wires, or the contracts, or lessen the necessity of the use of 
 them one iota, or diminish the profits of the business generally. The diffusion of 
 the stock among investors would strengthen rather than weaken it by rendering 
 it less liable to fluctuations, in consequence of the large blocks which may be 
 thrown upon the market. As an investment stock, it is a matter of no importance 
 who holds it, who sells it, or in what quantities, so long as its ability to earn 
 and pay is unaffected, and its growth and steady progress are undiminished. 
 
 4 
 
ADDENDA. 
 
 F OR the special information of those who have not been in the habit 
 of purchasing shares in incorporated companies, dealt in on the New- 
 York Stock Exchange, it may be well to say that the evidence of the pos- 
 session of the property is furnished to the purchaser in the shape of an 
 engraved certificate, testifying to the fact that the owner holds the number 
 of shares he has bought, and which cannot be disposed of to any other 
 person except upon the personal indorsation, on the back of the certificate 
 thus issued, and its cancellation at the office of transfer. This certificate 
 has all the merits of a title-deed to property. It is a good warrant for 
 the collection of the dividends regularly declared, and is as much a secur- 
 ity for the amount it represents as are the title-deeds to a farm or a house. 
 It also possesses the merit of being equal, in its evidence of ownership, to 
 a registered bond. Should a certificate be lost, the laws of the State 
 of New-York, under which the Western Union Company is incorporated, 
 provide that a new certificate can be issued. By no possibility can any 
 one else, but the owner of the stock whose name is on the face of the cer- 
 tificate, get possession of this evidence of property without the signature 
 of the latter duly witnessed. In this respect these certificates are just as 
 good as the registered bonds of the United States. Thus, from every 
 description of loss, including that by fire, fraud and robbery, the owner is 
 safe, so long as he does not sign away his rights, in the presence of a 
 witness. 
 
 It may also be interesting to be told how to become possessed of such 
 stocks as are dealt in on the New-York Stock Exchange. There are I, ioo 
 members in this Exchange, and a letter to any one of them, ordering a 
 certain amount of stock, will be immediately responded to. The list of 
 names at the end of this pamphlet are among those in whom perfect 
 reliance may be placed. Should a purchase be decided upon, all that is 
 necessary is to deposit the amount with your banker, write a letter to 
 some broker you may select, requesting him to buy a certain amount of 
 stock, and as soon as purchased to express the certificates thereof to the 
 
Wall Street Methods. 
 
 51 
 
 banker, and collect on delivery. It would be just as well to have the 
 bankers to certify on your letter that the money was on deposit for the 
 purpose named. Thus, if you wished to buy ioo shares of Western 
 Union stock, it would be necessary, at present quotations, say 85, to 
 deposit $8,512.50, $8,500 for the stock and $12.50 the broker’s commis- 
 sion of }i of one per cent, on the par value of $10,000. This investment 
 would yield at the rate of $600 per year. If a smaller purchase is decided 
 upon, say 50 shares, the amount to be deposited would be $4,256.25, 
 which would yield at the rate of $300 a year. Should the stock advance 
 to 90, or higher, of course the amount to be deposited will be just so 
 much increased, the commission being the same in all cases. 
 
 These simple particulars are furnished because this pamphlet 
 is sent to a great many who have hitherto not bought stock in this 
 way. It will do no harm to put them in possession of the modes to be 
 adopted. 
 
 One advantage in the purchase of dividend property on the Stock 
 Exchange is that there is never any trouble in the collection of the 
 interest which it yields. A check for the amount of the dividend is 
 mailed in the case of the Western Union Telegraph Company’s stock — 
 for instance, to the post-office address of each shareholder, payable to 
 his order. The income thereof may be relied upon with a regularity far 
 greater than the interest upon an ordinary mortgage or promissory note, 
 and it is not dependent upon the weather, the crops, or the habits of the 
 mortgagee or promiser, or being favorable otherwise. Again, the invest- 
 ment can be realized upon at any moment without any expense incurred 
 in foreclosing and without any legal delays. An investment made to-day 
 in Western Union stock can be realized upon at any time; three 
 months hence, probably, at some advance, and years hence with a very 
 considerable profit. So that, if the money is needed it is just as easy 
 to get it as if it were in a Savings Bank, while it is exposed to no 
 risks of failure, yields a good return, and is progressive in value, which 
 hardly any other investment is. 
 
 The above directions allude only to purchases for investment pur- 
 poses and not to speculative operations. The methods adopted when 
 stock is purchased in the expectation of an advance, or selling “ short” 
 in the expectation of a decline, are somewhat different. The plan usually 
 adopted is to remit to a broker at least $i,ooo, which is ten per cent, mar- 
 gin on one hundred shares of stock at par, less than which will hardly 
 be bought by a broker on speculation. With this margin to save him 
 from loss, the broker will purchase the stock and arrange to carry it. 
 Every advance in the price of one per cent, means a profit to the 
 speculator of $100, and every decline of one per cent, a loss of $100. 
 Parties can limit their loss by giving what is called a “ stop order” to 
 sell at a certain decline, or make sure of a profit by a similar order in 
 case of an advance. 
 
52 
 
 A Talk on Telegraphic Topics. 
 
 An illustration of an operation on margin may be given as follows : 
 Western Union stock is to-day, say, eighty-five. If a party thinks it 
 cheap and has reason to believe that it will advance, he sends $1,000 to 
 some broker whose name is mentioned at the end of this book, or $5,000 
 if he chooses. For this sum either one hundred or five hundred shares 
 will be bought and carried. Suppose an advance takes place of five or ten 
 per cent., the speculator would make on his one hundred shares $500 
 or $1,000, and the same proportion on a larger purchase. Should the 
 stock go down five or ten per cent., a loss would accrue of an equiv- 
 alent amount. A dividend-paying stock like the Western Union pays 
 its own interest, when it is carried long enough to realize the quarterly 
 dividends. Thus an operation extended long enough costs nothing 
 on account of interest, as the interest the broker charges on the amount 
 borrowed to carry the stock is repaid by the dividend. The only real 
 expense, therefore, is the commission of $12.50 on each purchase or 
 sale of one hundred shares. 
 
Established. 18G4. 
 
 COLEMAN BENEDICT & CO. 
 
 24 Broad St. New- York, 
 
 STOCKS AND BONDS. 
 
 A strictly commission business conducted in the purchase and sale of 
 Stocks and Bonds on Margin or for Investment. 
 
 Complete Financial Report issued weekly to our Correspondents. 
 Both members of the firm are members of the N. Y. Stock Exchange. 
 Coleman Benedict. James McGovern, Jr. 
 
 R. J. KIMBALL & CO. 
 
 [established in 1865.] 
 
 BANKERS AND BROKERS,' 
 
 40 Broadway, New-York. 
 
 Our firm consists of Three Members of the New-York Stock 
 Exchange. All orders are executed by a member of the firm, in the 
 Exchange. 
 
 We give personal attention to making investments in dividend-pay- 
 ing securities, in any lots from five shares, upwards. 
 
 First class securities carried on margin. 
 
 Robert J. Kimball. Alfred B. Lounsbery. Fred. E. Ballard. 
 
 d. A. BOODY. 
 
 REUBEN LELAND. 
 
 P. O. Box 447. C. w. MCLELLAN, Jr. 
 
 F. G. SALTONSTALL. 
 
 BOODY, McLELLAN & CO. 
 Bankers, 
 
 58 Broadway, cor. Exchange Place, New-York. 
 
 BUY AND SELL ON COMMISSION, FOR CASI^ OR ON MARGIN, ALL SECURITIES 
 DE^LT IN ^ T TtjE NEW-YORK STOCK EXCHANGE. 
 
 Interest allowed on Deposits, subject to Check at Sight. 
 CORRESPONDENCE INVITED. 
 
 BRANCH HOUSE, 128 La Salle Street, CHICAGO. 
 
J. W. Gordon. 
 
 j. D. Harris. 
 
 W. M. Donald, 
 
 Member N. Y. Stock Exchange. 
 
 DONALD, GORDON & CO. 
 
 No. 8 Broad Street, New- York, 
 
 BANKERS AND BROKERS. 
 
 All Securities dealt in at the New-York Stock Exchange 
 Bought and Sold for Cash, or on Margin. 
 
 CORRESPONDENCE SOLICITED. 
 
 W. E. CONNOR & CO. 
 
 71 Broadway, New-York, 
 
 BANKERS AND BROKERS. 
 
 Stocks, Bonds, and Miscellaneous Securities, Bought and 
 Sold on Commission. 
 
 TILGHMAN, ROWLAND & CO. 
 
 Stock Brokers, 
 
 54 Exchange Place, New York. 
 
 Stocks, Bonds, Governments, Bought and Sold on Commission, for 
 cash or on margins. 
 
 Stocks and Bonds bought in amounts to suit investors. Car Trust 
 Certificates. Railroad Paper. 
 
 S. Tilghman, Geo. Rowland, F. B. Tilghman, 
 
 Member N. Y. Stock Ex. Member Chicago Stock Ex. Member Chicago Stock Ex. 
 
Spencer Trask . 
 
 Geo . F Peabody . 
 
 Fred \ B. Noyes. 
 
 Spencer Trask & Co. 
 
 Bankers and Brokers, 
 
 70 Broadway, and 15 New Street, 
 
 City of New- York, 
 
 Members of the N. Y. Stock Exchange, 
 
 Transact a General Banking Business . 
 
 Ill classes of Securities Bought and Sold on Commission and Carried on Margin, 
 laily Market Letters sent to Customers. Correspondence promptly attended to. 
 
 Interest allowed on Deposits. 
 
 Subject to Draft at Sight . 
 
 BRANCH OFFICES — connected by private wires. 
 
 Albany, N. Y. 
 
 65 & 67 State Street, 
 
 W. A. Graves. 
 
 Philadelphia, 
 
 132 South Third St. 
 
 C. F. Fox. 
 
 Saratoga Springs, 
 
 Grand Union Hotel. 
 
I.