THE ORGANIZATION OF THE WESTERN UNION TELEGRAPH COMPANY.

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

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

Par Value.Market Value.
The capital of the Western Union Telegraph Company, which had sold at par and over in 1865, was$22,000,000$22,000,000
The capital stock of the American Telegraph Company, which sold at $180 per share in 1865, was4,000,0007,200,000
The capital stock of the United States Telegraph Company was11,000,00011,000,000
$37,000,000$40,200,000

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

FINANCIAL STATISTICS OF THE WESTERN UNION TELEGRAPH COMPANY.
CAPITAL STOCK.
At the date of the Report of October, 1865, the capital stock of the company issued was$21,355,100
  It has since been increased as follows:—
October, 1865, by conversion of bonds500
November, 1865, by exchange for stock of California State Telegraph Company122,500
December, 1865, by exchange for Lodi Telegraph Stock500
December, 1865, by exchange for Trumansburg and Seneca Falls Telegraph Stock,3,500
December, 1865, by issue to Hicks & Wright for Repeater Patent,1,500
December, 1865, by exchange for Missouri and Western Telegraph Stock,400
December, 1865, by exchange for House Telegraph Stock,1,400
April, 1866, by 2½ percent Stock Dividend, to equalize stock as per Consolidation Agreements,472,300
April, 1866, by consolidation with United States Telegraph Company,3,845,800
June, 1866, by issue for United States Pacific Lines,3,333,300
July, 1866, by consolidation with American Telegraph Company,11,818,800
July, 1866, by exchange for P. C. & L. Telegraph Stock,4,100
December 1, 1867, by fractions converted, to date,49,100
Total present capital,$41,008,800
Of the stock issued for United States Pacific Lines there was returned to the company, as consideration for completing construction of Pacific Line,$883,300
The company owns also,120,800
$1,004,100
Out of this we have issued for—
  Southern Express Co.’s Telegraph Lines,$150,000
  California State Telegraph Co.’s Stock,124,700
  Other Telegraph Lines,80,000
354,700
Now owned by the company, 649,400
Balance, on which we are liable for dividends,$40,359,400
BONDED DEBT.
Bonds of the American Telegraph Company, due in 1873,$89,500
Bonds of the Western Union Telegraph Company, due in 1875,$4,857,300
Total Bonded Debt, December 1, 1867,$4,946,800

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

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

CAPITAL STOCK.
At the date of the Report of January 1, 1868, the Capital Stock of the Company, issued, was, $41,008,800.00
It has since been increased as follows:—
By exchange for United States Telegraph Stock,$10,800.00
By exchange for American Telegraph Stock,2,400.00
By exchange for House Telegraph Stock,100.00
By fractions converted,600.00
13,900.00
Total Capital Stock issued May 1, 1868,41,022,700.00
Of this there is owned by the Company,675,000.00
Balance on which dividends are payable,$40,347,700.00
BONDED DEBT.
Bonds outstanding December 1, 1867,$4,946,800.00
Bonds of 1875 since purchased and cancelled,56,300.00
Balance of Bonded Debt May 1, 1868,$4,890,500.00
Maturing as follows: In 1873,$89,500.00
Maturing as follows: In 1875,4,801,000.00
$4,890,500.00
PROPERTY ACCOUNT.
Telegraph Lines and Property, December 1, 1867,$47,733,640.68
    Since added,
By exchange of Stocks, as per Stock Account,$13,300.00
By Application of Profits:—
  Construction Account,$103,592.13
  Purchase of Telegraph Stocks,23,806.66
  Purchase of Real Estate,3,011.14
$130,409.93
$143,709.93
Total Property Account, May 1, 1868,$47,877,350.61
STOCK, BOND, AND PROPERTY BALANCES, MAY 1, 1868.
Assets.Liabilities.
Telegraph Lines, Equipment, Franchises, etc.,$47,051,358.49
Western Union Telegraph Stock owned by Company,667,342.50
Productive Stock in other Telegraph Companies,52,471.81
Real Estate,106,177.81
Capital Stock,$41,022,700.00
Fractional Shares,15,110.00
Bonded Debt,4,890,500.00
Bond and Mortgage, Buffalo Property,15,000.00
Profits used for Purchase of Property, and Redemption of Bonds,1,934,040.61
$47,877,350.61$47,877,350.61
STATEMENT OF INCOME AND EXPENSES FROM JULY 1, 1866, TO NOVEMBER 1, 1868.
1866.Gross Receipts.Expenses.Net Profits.
July,$562,292.97$410,382.40$151,910.57
August,548,716.96346,742.31201,974.65
September,556,955.95298,931.99258,023.96
October,623,528.31344,245.07279,283.24
November,571,036.02322,508.66248,527.36
December,551,971.40302,596.41249,374.99
January,580,560.53341,104.71239,455.82
February,483,441.77314,617.26168,824.51
March,530,642.66297,076.59233,566.07
April,545,586.30320,869.41224,716.89
May,525,437.94326,829.83198,608.11
June,488,754.55318,100.99170,653.56
July,536,156.89360,917.53175,239.36
August,570,676.85375,970.17194,706.68
September,601,548.79375,641.50225,907.29
October,628,836.74393,459.92235,376.82
November,583,723.66370,429.57213,294.09
December,576,135.19379,291.35196,843.84
1868.
January,539,794.00366,446.02173,347.98
February,600,183.32345,855.52254,327.80
March,587,962.23335,947.64252,014.58
April,602,257.05356,349.18245,907.87
May,597,374.47349,165.41248,209.06
June,579,911.00353,375.50226,535.50
July,601,730.61396,163.66205,566.95
August,602,304.73376,452.03225,852.70
September,630,665.36372,197.50258,467.86
October,680,311.81410,604.17269,707.64
$16,088,498.86$9,862,272.31$6,226,225.75