The proposed union of the telegraph and postal systems

Chapter III: Part 3

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As for the collection of telegrams from street boxes, the very idea is in direct antagonism to the first principles of telegraphic communication. A street box may answer the purpose of a place of deposit for a letter intended for the next day’s mail, but those who desire to communicate by telegraph want immediate and speedy communication. They require their message conveyed, and very frequently answered, whilst they wait in the telegraph office. They have no idea of depositing their messages to await the diurnal collection from the street box. Indeed, the idea is too absurd to be seriously discussed. There are upwards of 100 telegraph offices in the city of New York alone, and a proportionate number of branch offices in all the cities. Is it probable that persons who wish to send a despatch will walk several miles to send it by government line rather than patronize private lines at their own doors?

We cannot think that a department whose expenses exceed its receipts by $6,437,991.85 in a single year; which cannot even _guess within a hundred millions_ of the number of letters it transmits per annum; which provides only forty-six free delivery offices out of a total of 29,387 post-offices in the United States; which does not even pretend to give the number of letters delivered free for any one year; and which sends over 4,500,000 letters to the Dead-Letter Office per annum, is a very proper guardian of so important an interest as the Electric Telegraph.

The space occupied for the various telegraph offices in all the principal cities of the United States is considerably greater than that required by the post-offices, while the rent paid by our company, owing to the more central and eligible situations of our offices, is greatly in excess of that paid by the Post-Office Department. In New York, our company pays $40,000 per annum for rent of its central office alone. So far as space and eligibility of location is concerned, we could much better accommodate the public by the delivery of their letters at our numerous offices, than they are now accommodated at the remote and inconvenient places provided for them by the government, and in all respects we could much better handle the mails than the post-office, as now located and generally conducted, could manage the telegraph.

MR. WASHBURNE’S PROPOSED EXPERIMENTAL LINE.

Mr. Washburne says:—

“In the present position of the finances of the country, it would
hardly be wise to enter upon an extended experiment. It should be
tried at first on a limited scale, and at small cost. If it proves
successful, and becomes what the telegraph under other government
control has become in other countries,—a source of revenue, as well
as an inestimable boon to the community,—it ought to be, and
doubtless will be, extended. The amount necessary to construct a
suitable line from Washington to New York, and to sustain it until
it becomes self-sustaining, will not exceed $75,000, and it is the
belief of experienced telegraphers that, with a tariff of charges as
low as that of Belgium and Switzerland, and with an additional
charge of single postage upon each message, the line would be
self-sustaining from the beginning, and would probably repay its
entire cost long before the value of the structure was materially
impaired.”

The results of lowering tariffs for telegrams to a point approximating the charge for letter postage has been tried so often in this country, as not to require a new demonstration. The following statement will show the result of a recent trial between the two important cities of Chicago and Milwaukee.

On the 12th of August, 1867, a rival line was opened between those two points, having no connection with any other at either end. The competition, therefore, was for local business only. The tariff previously had been sixty cents. The average number of messages transmitted per day for the ten days preceding the beginning of business by the new company was sixty-nine, and the daily receipts fifty-five dollars. On the opening of the rival line the rate was reduced to forty cents, and the average number of messages sent by both was eighty-seven, the receipts forty-seven dollars. On the 16th September the rate was further reduced to twenty cents, with the following results: Average number of messages per day for both lines, one hundred and thirty-three. Average receipts, thirty-seven dollars. On November 8th the rate was reduced to ten cents, and remained so for the next fourteen days, during which the number of telegrams transmitted daily by both lines was one hundred and sixty-seven, and the average receipts twenty-six dollars.

About the 20th November the rates were advanced to forty cents, by mutual agreement, and afterwards the lines and records of the new company came into our possession.

No. 1.

_Statement showing number of Messages sent between Chicago and
Milwaukee for first twelve days in August, 1867, at a Tariff of sixty
cents, and same for 1868, at a Tariff of forty cents, together with
daily Receipts._

┌─────────╥─────────────────────────────╥─────────────────────────────┐ │ DATE. ║ August, 1867. ║ August, 1868. │ │ ║ Tariff 60 and 4. ║ Tariff 40 and 3. │ ├─────────╫─────────┬─────────┬─────────╫─────────┬─────────┬─────────┤ │ ║ Sent. │Received.│Receipts.║ Sent. │Received.│Receipts.│ ├─────────╫─────────┼─────────┼─────────╫─────────┼─────────┼─────────┤ │August 1║ 41│ 48│ $67.40║ 49│ 37│ $39.64│ │ „ 2║ 31│ 38│ 57.00║ 4│ 2│ 1.87│ │ „ 3║ 36│ 25│ 49.63║ 53│ 42│ 58.25│ │ „ 4║ 2│ 1│ 1.78║ 69│ 39│ 53.02│ │ „ 5║ 41│ 34│ 55.98║ 46│ 41│ 43.36│ │ „ 6║ 41│ 40│ 63.39║ 67│ 46│ 54.60│ │ „ 7║ 42│ 49│ 73.77║ 51│ 39│ 42.44│ │ „ 8║ 45│ 27│ 55.75║ 56│ 50│ 52.08│ │ „ 9║ 39│ 38│ 61.68║ │ │ │ │ „ 10║ 40│ 40│ 63.91║ 52│ 44│ 47.30│ │ „ 11║ │ │ ║ 62│ 42│ 51.70│ ├─────────╫─────────┼─────────┼─────────╫─────────┼─────────┼─────────┤ │ Totals ║ 358│ 340│ $550.29║ 509│ 382│ $444.26│ ├─────────╨─────────┴─────────┴─────────╨─────────┴─────────┼─────────┤ │1867, Average, 69 Messages │ $55.00│ │1868, Average, 89 Messages │ 44.42│ └───────────────────────────────────────────────────────────┴─────────┘

No. 2.

_Statement showing number of Messages transmitted between Chicago and
Milwaukee, over the Western Union Independent Telegraph Lines, from
August 12th to August 26th together with the daily Receipts._

┌─────────╥───────────────────────────────────────────────────────────┐ │ DATE. ║ Tariff 40 and 3. │ ├─────────╫─────────────────────────────╥─────────────────────────────┤ │ ║ W. U. and Independent. ║ Western Union. │ │ ║ August, 1867. ║ August, 1868. │ ├─────────╫─────────┬─────────┬─────────╫─────────┬─────────┬─────────┤ │ ║ Sent.│Received.│Receipts.║ Sent.│Received.│Receipts.│ ├─────────╫─────────┼─────────┼─────────╫─────────┼─────────┼─────────┤ │August 12║ 33│ 47│ $52.96║ 44│ 42│ $47.82│ │ „ 13║ 35│ 52│ 66.35║ 49│ 38│ 50.11│ │ „ 14║ 35│ 50│ 59.00║ 54│ 42│ 53.35│ │ „ 15║ 44│ 46│ 55.27║ 52│ 41│ 48.28│ │ „ 16║ 34│ 45│ 53.61║ 1│ │ .52│ │ „ 17║ 38│ 45│ 62.38║ 58│ 52│ 63.21│ │ „ 18║ │ 2│ 2.02║ 45│ 33│ 45.69│ │ „ 19║ 45│ 51│ 70.45║ 40│ 45│ 52.39│ │ „ 20║ 41│ 50│ 68.51║ 47│ 44│ 64.77│ │ „ 21║ 39│ 46│ 62.67║ 54│ 40│ 50.22│ │ „ 22║ 37│ 39│ 49.42║ 48│ 38│ 46.77│ │ „ 23║ 39│ 41│ 52.97║ 3│ 2│ 2.21│ │ „ 24║ 30│ 33│ 56.15║ 43│ 45│ 59.57│ │ „ 25║ 2│ │ 2.10║ 54│ 66│ 73.26│ │ „ 26║ 63│ 41│ 55.31║ 48│ 57│ 62.89│ ├─────────╫─────────┼─────────┼─────────╫─────────┼─────────┼─────────┤ │ Totals ║ 515│ 588│ $769.17║ 640│ 585│ $721.06│ ├─────────╨─────────┴─────────┴─────────╨─────────┴─────────┼─────────┤ │1867, Average, 73 Messages │ $51.28│ │1868, Average, 81 Messages │ 48.07│ └───────────────────────────────────────────────────────────┴─────────┘

Statement No. 1 exhibits a comparison for the first ten days of August, 1867, before the opening of the rival line, and when the tariff was sixty cents, with the same period in 1868 after the tariff had been forty cents for nearly a year. Statement No. 2 makes a similar comparison between the aggregate business of the Western Union and the competing line for the first fifteen days after the latter opened in 1867, and the same period in 1868, when, although the rate was the same, there was no competition. By Table No. 1 it appears that, at a tariff of sixty cents, the number of messages per day last year was sixty-nine, and the receipts therefor fifty-five dollars. That during the same period this year, at a reduction of one third in the tariff, there was an increase of about thirty-three and one third per cent in the number of messages, but a loss in revenue of twenty per cent. In other words, our work has been considerably increased, and our compensation therefor sensibly diminished. Statement No. 2 shows that last year, under the stimulus of active competition, and a reduction in rates of one third, the average number of messages per day for fifteen days was but four more than for the ten days next preceding. It also shows that, after the reduced rate had been in operation a year, and, notwithstanding the fact that the telegraph business in all sections of the country in the month of August this year was somewhat larger than last, the average had been increased but eight messages per day, and this increase was attended by a loss of over three dollars per day in the revenue.

From September 1 to November 3, 1868, the number of messages transmitted per day between these places was one hundred four and a quarter, and the average daily receipts $56.41.

On the 4th of November another rival line was opened between Chicago and Milwaukee, but no change in rates was introduced until the 24th of November. The average number of messages transmitted per day by the Western Union Telegraph Company between these places, from the 4th to the 23d of November, inclusive, was seventy-eight, and the daily receipts $43.27.

On the 24th of November the rates were reduced to twenty cents per message, with the following results: Average number of messages transmitted per day between Chicago and Milwaukee by the Western Union Telegraph Company, sixty-eight; average daily receipts, $24.59.

It should be remembered that the business from which these exhibits are derived is between two of the most important inland commercial cities in the country. Both are largely interested in two important branches of commerce,—grain and lumber; and probably no other points could be selected from which more reliable results could be obtained.

The reason why the Chicago and Milwaukee table is the only one given to show the results of competition is, that such comparisons are only valuable when they exhibit the effect upon the business of both competitors. This is impossible in other cases, because our opponents will not furnish us with their figures. We have written to every Telegraph Company in the United States for such statistics for publication, but none of them has responded to our request.

LONDON DISTRICT TELEGRAPH COMPANY.

We copy the following official statement of the London District Telegraph Company from the Telegraphic Journal, London, July 30, 1864. The capital of the company is £60,000, and the average cost of telegrams transmitted over its lines, for distances that cannot exceed ten miles, was 6_d._, equal to eighteen cents in our currency, and yet the loss in four and a half years’ business was £9,573 3_s._ 7_d._:—

┌──────────────┬─────────┬───────────────┬───────────────┬───────────────┐ │ Half-year │Number of│ Receipts for │ Expenditures. │ Deficiency. │ │ ending │Messages.│ Messages. │ │ │ ├─────────┬────┼─────────┼─────┬────┬────┼─────┬────┬────┼─────┬────┬────┤ │ │ │ │ £ │_s._│_d._│ £ │_s._│_d._│ £ │_s._│_d._│ │June, │1860│ 26,155│ 550│ 19│ 11│2,282│ 10│ 7│1,326│ 2│ 4│ │December,│1860│ 47,365│1,058│ 19│ 2│3,294│ 0│ 6│2,168│ 1│ 7│ │June, │1861│ 64,785│2,137│ 1│ 7│4,394│ 12│ 3│2,177│ 11│ 4│ │December,│1861│ 77,939│2,592│ 15│ 10│4,663│ 5│ 4│1,995│ 13│ 7│ │June, │1862│ 123,280│3,956│ 4│ 8│5,077│ 17│ 11│1,077│ 15│ 4│ │December,│1862│ 124,222│3,999│ 3│ 2│4,958│ 4│ 2│ 894│ 0│ 4│ │June, │1863│ 129,710│4,216│ 6│ 11│4,721│ 1│ 3│ 440│ 9│ 4│ │December,│1863│ 131,216│4,326│ 4│ 0│5,125│ 9│ 4│ 796│ 15│ 4│ │June, │1864│ 152,795│4,802│ 10│ 0│4,863│ 17│ 10│ 60│ 12│ 0│ └─────────┴────┴─────────┴─────┴────┴────┴─────┴────┴────┴─────┴────┴────┘

The Directors of the above company express much satisfaction in being able to present to the shareholders so favorable a statement of its business; but it strikes us that a system which entailed a net loss of one sixth of the capital invested in a little over four years is not a desirable one for imitation.

TELEGRAPHS UNDER GOVERNMENT AND PRIVATE CONTROL COMPARED.

The assertion that the Telegraph facilities are better in those countries where it is under governmental control than in those where it is left to private enterprise is entirely erroneous, as the following tables, compiled from official data, will show.

_Statistics of Telegraphs constructed and operated under Government
Control_.

┌───────────┬────────┬──────┬───────┬──────────┬───────────┬───────────┐ │ │ │Number│Number │ │ │Proportion │ │ NAME OF │ Number │ of │ of │Number of │ │of Offices │ │ COUNTRY. │ of │Miles │ Miles │ Messages │Population.│ to │ │ │Offices.│ of │ of │ Sent. │ │Population.│ │ │ │Line. │ Wire. │ │ │ │ ├───────────┼────────┼──────┼───────┼──────────┼───────────┼───────────┤ │Austria │ 851│24,618│ 73,854│ 2,507,472│ 39,411,309│ 1 to│ │ │ │ │ │ │ │ 46,311│ │Belgium │ 356│ 2,187│ 6,146│ 1,128,005│ 4,984,451│ 1 to│ │ │ │ │ │ │ │ 14,000│ │Bavaria │ │ 2,115│ 4,945│ │ 4,541,556│ │ │Denmark │ 89│ │ 2,515│ 308,150│ 2,468,713│ 1 to│ │ │ │ │ │ │ │ 27,000│ │France │ 1,209│20,628│ 68,687│ 2,507,472│ 38,302,625│ 1 to│ │ │ │ │ │ │ │ 31,600│ │Italy │ 529│ 8,200│ 20,120│ 1,760,889│ 25,925,717│ 1 to│ │ │ │ │ │ │ │ 49,000│ │Norway │ 73│ │ │ 269,375│ 1,433,488│ 1 to│ │ │ │ │ │ │ │ 19,000│ │Prussia │ 538│18,386│ 55,149│ 1,964,003│ 17,739,913│ 1 to│ │ │ │ │ │ │ │ 33,000│ │Russia │ 308│12,013│ 22,214│ 838,653│ 68,224,832│ 1 to│ │ │ │ │ │ │ │ 221,000│ │Switzerland│ 252│ 1,858│ 3,717│ 668,916│ 2,510,494│ 1 to│ │ │ │ │ │ │ │ 10,000│ │Spain │ 142│ 8,871│ 17,743│ 533,376│ 16,302,625│ 1 to│ │ │ │ │ │ │ │ 109,000│ ├───────────┼────────┼──────┼───────┼──────────┼───────────┼───────────┤ │ │ 4,347│98,876│275,090│12,486,311│ │ │ └───────────┴────────┴──────┴───────┴──────────┴───────────┴───────────┘

_Statistics of Telegraphs constructed and operated under Private
Control_.

Thus it will be seen that Continental Europe, where the telegraphs are under government control, furnishes but 4,347 offices for a population of over 250,000,000, while Great Britain, the Dominion of Canada, and the United States, where telegraphy has been left to the control of the people, untrammelled by governmental interference, monopoly, or restriction, furnish 6,659 offices for a population of 64,000,000! The number of telegrams transmitted per annum in Continental Europe is only 12,486,311, while there were sent by the people of the three countries where it has hitherto been free from government repression, 18,741,360. The tariff of charges in Continental Europe averages eighty-one cents per message, while in the three countries where the people manage the business it averages but fifty-one cents.

Private enterprise alone laid the submarine cables through the Persian Gulf and Mediterranean Sea, across the Gulf of St. Lawrence, the Vineyard Sound, the Strait of Florida, the English Channel, the North Sea, and the German and Atlantic Oceans.

THE TELEGRAPH AND THE PRESS.

In nothing, perhaps, is the superiority of private enterprise over governmental control more strongly marked than in the extraordinary amount of news furnished to the press of the United States, as contrasted by the meagre supply of the European journals.

By a system of co-operation among the newspapers of the United States and the Western Union Telegraph Company, the news of the world is daily furnished to the people of every portion of this country at a price within the reach of the poorest citizen.

On page 8 we have shown that 294,503,630 words are annually furnished to the newspapers of the United States, at an average cost of less than two mills per word. This immense amount of matter is not transmitted to each newspaper separately, but through a combination of wires only possible to a vast system like that owned by the Western Union Telegraph Company, it is sent to a large number of places simultaneously, with only one transmission.

The newspapers of the United States are associated together on the co-operative system. There is a general association having its headquarters in New York, which collects news from every part of the world; and there are local associations in every section of the country, which furnish their quota of intelligence to the general association, and receive in return such news as they require.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Mr. Hubbard commences by saying:—

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

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

ERRONEOUS STATEMENTS RELATIVE TO BELGIAN TELEGRAPHS.

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

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

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

We quote from Mr. Hubbard again:—

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

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

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

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

We quote from Mr. Hubbard:—

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

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

BELGIAN TELEGRAMS DELIVERED BY POST.

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

Footnote 15:

Government and the Telegraphs. London, 1868.

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

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

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

WANT OF UNIFORMITY IN RATES.

We quote from Mr. Hubbard:—

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

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

The average rates he gives for America for

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

The English rate for

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

Mr. Hubbard says:—

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

Footnote 16:

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

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

Footnote 17:

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

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

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

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

ASSERTION THAT COMMERCIAL MESSAGES ARE TRANSMITTED AT A LOSS.

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

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

Mr. Hubbard says:—

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

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

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

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

CORRECTION OF ERRONEOUS STATEMENTS.

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

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

Footnote 18:

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

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

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

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

TARIFFS NOT INCREASED BY CONSOLIDATION OF THE LINES.

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

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

Mr. Hubbard says:—

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

The rates are unquestionably often reduced by competition, sometimes below the cost of doing the business, and this will always be the case as long as men will listen to the plausible schemes of speculative enthusiasts, and invest their money in new lines in the hope of realizing profits which are never earned. The assertion, however, that consolidation is followed by an increase of rates, without regard to the growth of the business, is not warranted by the facts.

ERRONEOUS ASSERTION THAT A LARGE PROPORTION OF THE OFFICES ARE AT
RAILROAD STATIONS.

We quote from Mr. Hubbard again:—

“The telegraph in this country is very generally connected with the
railroad system, and a large proportion of the offices are at
railroad stations.[19] These are seldom in the centre of the towns,
and are not resorted to as generally as the post-office. In the
large cities, the principal offices are near the business centres,
with a number of secondary offices, generally at hotels and railroad
stations. The rent of the main offices is very large, and the
expenses for operators, clerks, and managers are also necessarily
much more than when the telegraph is connected with the post.”

Footnote 19:

By a singular coincidence, Mr. Scudamore makes the same complaint
against the English companies, and in nearly the same words. See
Scudamore’s Letter to the Postmaster-General, London, 1868.

It is true that many telegraph offices are connected with the railroad system in this country, as well as abroad. Indeed, no railroad would be considered complete without such a connection, but it is not true that a large proportion of the offices are at the railroad stations.

We have shown on page 8 that the telegraph system of Europe is not specially connected with the Post-Office Department. In some countries the telegraph, post-office, and railway systems are under one department, but there is no particular connection between them. The post-offices are merely offices of deposit for telegrams, and not for transmission. But supposing they were united, why should the expenses of operators, clerks, and managers be necessarily much less than when the telegraph is worked separately? We presume he does not propose to dispense with the operators, and put the telegrams in the mail-bag; or does he propose that when the government gets control of the telegraph that the salaries will be reduced? If this is his idea, we think he is reckoning on a false hope, for if there was an attempt of this nature, the operators would seek some other employment.

AMERICAN AND EUROPEAN TELEGRAPH TARIFFS COMPARED.

Mr. Hubbard says:—

“The lowest American rates are higher than the average foreign
rates, and the average rates several times higher than the foreign.
These high rates retard the development of the system, which was
more rapid in its early growth in this than in any other country.
What are the reasons assigned for these high rates? Are they well
founded, and if not, how can they be obviated?”

These assertions are entirely erroneous, and the facts quite the reverse. _The highest American rates are lower than the highest foreign rates; the average American rates are lower than the average foreign rates; and the lowest American rates are lower than the lowest foreign rates._ The lowest rate given in Europe is half a franc, about equal to 14⅘ cents in currency, while our rate between Baltimore and Washington is only 10 cents. In Paris the tariff on city messages is half a franc (14⅘ cents), and in London, for city messages, 6_d._ sterling, equal to 18 cents in our currency; while the rates for New York, from the Battery to Harlem River, are only 10 cents.

In order that a fair comparison may be made between the American and European systems of telegraphy, so far as the rate of charges is concerned, we present a list of sixty of the principal stations in Europe, and the same number in the United States, with the tariffs and distances in air lines from London and New York respectively, together with the rules and regulations of each system.

RULES OF THE EUROPEAN TELEGRAPHS.

The minimum charge is for a message of twenty words, including the address and signature, and half price is charged for each ten or fraction of ten words above twenty.

Words of seven or less syllables count as one word. In words containing more than seven, the overplus counts as _one_ word; each word _underlined_ counts as _three_ words.

Messages containing the same subject-matter addressed to different stations are charged as separate messages.

Secret or cipher messages can be sent by government only.

Replies at full rates can be prepaid; but should the reply contain more than the number of words specified and paid for, the sender of the reply must pay for the excess as a fresh message.

Messages can be repeated by payment of double charge at the time they are sent, the words “Repetition paid” being inserted after receiver’s address, and charged for.

All complaints respecting irregularity in the transmission or delivery of messages must be made by THE SENDER, and in cases of delay or error the complaint must invariably be accompanied by the RECEIVER’S COPY of the message. Complaints from the receivers of messages will not be entertained.

RULES OF THE WESTERN UNION TELEGRAPH COMPANY.

The minimum tariff is for a message of ten words. No charge is made for address, signature, or date. After the first ten words the rate is so much per word, the amount being proportional to the rate for the first ten.

All words are counted as one which are found so written in the dictionaries. No extra charge is made for messages written in cipher, and no restrictions are placed upon their transmission.

Replies can be prepaid if desired, and no charge is made for inserting this information in the sender’s message.

Messages can be repeated by the payment of one half the regular charge in addition, and the company agrees to be responsible for any mistakes which may occur in repeated messages, to the amount of fifty times the sum received for sending the same.

Correctness in the transmission of messages to any point on the lines of this company can be INSURED by contract in writing, stating agreed amount of risk, and payment of premium thereon at the following rates, in addition to the usual charge for repeated messages, viz.: one per cent for any distance not exceeding one thousand miles, and two per cent for any greater distance. No employee of the company is authorized to vary the foregoing.

_Statement showing the Minimum Rate for Telegrams from London to
Principal Cities in Europe, and from New York to Principal Cities in
America._

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The proposed union of the telegraph and postal systemsChapter III: Part 3

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