The proposed union of the telegraph and postal systems / Statement of the Western Union Telegraph Company

by Western Union Telegraph Company

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.”

[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.