To impugn the motives of an opponent is the weakest of arguments. If his statements are wrong, it is easy to show wherein, but wholesale denunciation convinces no one of the strength of the cause or the culpability of the assailed. We do not question Mr. Washburne’s honesty of purpose in making his unjust and extremely erroneous statements regarding the property or executive ability of the Western Union Telegraph Company, but we do say that he is most egregiously deceived upon all points which he has discussed.
In reply to the charges which Mr. Washburne brings against the Western Union Telegraph Company, of compiling information for the Postmaster-General with an intent to mislead, of exaggerating the cost of construction of lines, and misrepresenting the value of its own, we respectfully present the following facts respecting the organization of the company, the amount of its capital, the number of miles of line and the number of miles of route, together with a statement of the number of skilled persons in its employ.
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, was | 4,000,000 | 7,200,000 |
| The capital stock of the United States Telegraph Company was | 11,000,000 | 11,000,000 |
| $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 bonds | 500 | ||
| November, 1865, by exchange for stock of California State Telegraph Company | 122,500 | ||
| December, 1865, by exchange for Lodi Telegraph Stock | 500 | ||
| 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:—