REVIEW OF MR. GARDINER G. HUBBARD’S LETTER TO THE POSTMASTER-GENERAL ON THE EUROPEAN AND AMERICAN SYSTEMS OF TELEGRAPH.
Reading edition
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 57government, 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 58reduces 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]—
“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 59estimate 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.
“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]
As the average of these English rates is a little over 75 cents, 60while 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 61proportioned 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.”
62Mr. 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]
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 63Company 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, 64and 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.”
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 65be 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, 6d. 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.
66
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.
From London Distance in Eng. Miles. Tariff. From New York Distance in Eng. Miles. Tariff.
£ s. d. U.S. Cur. $ cts.
To Cambridge 40 1 6 = $0.52 To New Haven, Conn. 70 0.20
Dover 50 2 0 = 0.70 Hartford, Conn. 100 0.20
Birmingham 100 1 0 = 0.35 Providence, R. I. 150 0.20
Worcester 100 2 0 = 0.70 Springfield, Mass. 125 0.30
Havre 125 3 6 = 1.22 Worcester, Mass. 155 0.30
Liverpool 180 1 0 = 0.35 Boston, Mass. 190 0.30
Caen 160 5 0 = 1.75 Portsmouth, N. H. 200 0.45
67 Plymouth 190 2 6 = 0.87 Washington, D. C. 190 0.40
Paris 200 5 0 = 1.75 Augusta, Me. 280 0.65
Amsterdam 200 6 6 = 2.27 Oswego, N. Y. 250 0.40
Rheims 250 5 0 = 1.75 Portland, Me. 250 0.65
Aix-la-Chapelle 265 5 0 = 1.75 Bath, Me. 275 0.65
Wakefield 300 5 0 = 1.75 Rochester, N. Y. 280 0.50
Dublin 290 5 0 = 1.75 Pittsburg, Pa. 300 0.45
Edinburgh 320 4 0 = 1.40 Camden, Me. 330 0.65
Rochelle 350 7 3 = 2.53 Belfast, Me. 350 0.65
Frankfort 380 7 6 = 2.62 Buffalo, N. Y. 330 0.50
Hamburg 380 8 0 = 2.80 Erie, Pa. 360 1.00
Strasburg 385 7 3 = 2.53 Bangor, Me. 340 0.65
Hanover 400 8 0 = 2.80 Cleveland, Ohio 425 1.00
Stuttgart 420 7 6 = 2.62 Toledo, Ohio 470 1.00
Berne 450 7 3 = 2.53 Columbus, Ohio 475 0.95
Bordeaux 455 7 3 = 2.53 Sandusky, Ohio 480 1.40
Munich 540 8 6 = 2.67 Cincinnati, Ohio 550 1.00
Turin 550 7 3 = 3.53 Lexington, Ky. 575 1.00
Copenhagen 552 8 0 = 2.80 Dayton, Ohio. 552 1.00
Berlin 560 10 0 = 3.50 Charleston, S. C. 590 2.00
Milan 575 8 6 = 2.67 Fort Wayne, Ind. 580 1.70
Marseilles 576 8 6 = 2.67 Lansing, Mich. 590 1.85
Prague 600 9 9 = 3.41 Louisville, Ky. 625 1.00
Modena 650 9 6 = 3.32 Indianapolis, Ind. 650 1.90
Saragossa 652 9 6 = 3.32 New Albany, Ind. 660 1.75
Christiania 700 17 6 = 5.95 La Fayette, Ind. 700 1.95
Trieste 720 11 = 3.85 Chicago, Ill. 730 1.75
Vienna 780 11 = 3.85 Racine, Wis. 750 1.90
Madrid 750 10 6 = 3.67 Milwaukee, Wis. 770 1.90
Ancona 800 11 = 3.85 Peru, Ill. 800 2.25
Rome 850 12 = 4.20 Madison, Wis. 850 2.40
Stockholm 860 16 3 = 5.69 Montgomery, Ala. 860 3.05
Warsaw 875 13 3 = 4.64 St. Louis, Mo. 880 2.00
Pesth 880 12 3 = 4.29 Galena, Ill. 880 2.35
Cagliari 925 14 = 4.90 Rock Island, Ill. 900 2.35
Naples 950 11 = 3.85 Prairie du Chien, Wis. 950 2.65
Lisbon 955 14 = 4.90 Quincy, Ill. 950 2.60
Seville 980 13 = 4.55 Jefferson City, Mo. 975 2.70
Cadiz 1,000 13 = 4.55 Mobile, Ala. 1,000 3.00
Belgrade 1,005 13 6 = 4.72 Little Rock, Ark. 1,050 4.00
Palermo 1,080 12 = 4.20 Des Moines, Iowa. 1,080 2.70
St. Petersburg 1,160 18 6 = 6.47 New Orleans, La. 1,100 3.25
Novgorod 1,275 18 6 = 6.47 Houston, La. 1,330 5.00
Smolensk 1,280 18 6 = 6.47 Galveston, Texas 1,340 3.95
Malta 1,250 16 9 = 5.87 Grand Island, Nebraska 1,350 4.60
Odessa 1,360 18 6 = 6.47 Fort Kearney, Nebraska 1,380 5.25
Athens 1,450 1 12 = 11.36 Austin, Texas 1,460 5.50
Constantinople 1,480 19 6 = 7.00 San Antonio, Texas 1,550 5.50
Smyrna 1,540 1 6 6 = 9.43 Fort Laramie, Nebraska 1,600 6.40
Nishni Novgorod 1,700 1 2 = 7.86 Denver, Colorado 1,700 7.60
Moscow 1,485 19 = 6.65 Salt Lake City, Utah 2,100 5.95
Taganrog 1,490 1 6 = 9.26 Sacramento, California 2,500 6.75
Sjumen 1,500 1 8 = 9.96 Stockton, California 2,500 6.75
Alexandria 1,867 2 6 9 = 16.69 San Francisco, California 2,600 6.75
68
MORE ERRONEOUS STATEMENTS.
Mr. Hubbard’s assertion that, “where a message is repeated, the expense is increased about seventy-five per cent, but on well-constructed lines, in ordinary weather, messages between any two stations east of a line from St. Paul to New Orleans require but one repetition,” hardly needs refutation. East of the line named there are more than four thousand telegraph offices, and at least 1,300 separate and distinct circuits. How, then, can separate wires be maintained between every two stations over this vast territory? Even confining the statement to one office at the East,—say Boston, for example,—how is it possible to maintain separate circuits that will enable that office to work direct with each one of four thousand offices? It would be more practicable to travel from every town in the United States to every other town, without change of cars, than it would to establish direct telegraphic connection between each.
The Western Union Telegraph Company maintains independent circuits, and works direct between New York and Philadelphia, Washington, Boston, Buffalo, Montreal, Chicago, Cincinnati, New Orleans, Portland, Plaister Cove, and many other points; but to work with every office in the United States without repetition would require more wires upon each pole than the mythical Briareus had hands.
SINGULAR NOTIONS OF PRACTICAL TELEGRAPHY.
It seems scarcely worth while to follow Mr. Hubbard in his statements regarding the capital of the Western Union Telegraph Company, and the cost of its lines. We have given a statement on pages 37 to 40 of the organization of this company, the amount of its capital, length of lines, and other matters of interest.
Mr. Hubbard’s statement that the directors of the Western Union Telegraph Company have steadfastly refused to reduce rates until forced by competition, and then consolidated with the competing company, and again raised the rates, is without the slightest foundation in fact. We have previously stated that no increase in the rates has been made since the consolidation with the United States and American companies, but, on the contrary, they 69have been reduced to more than one thousand stations, while the opposition have less than three hundred offices all told.
ABSURD THEORIES REGARDING THE WORKING CAPACITY OF TELEGRAPH LINES.
Mr. Hubbard says:—
“The capacities of the line of telegraph are very great. 2,000 words an hour are easily transmitted by a good operator over a single wire. At this rate there could be sent over fifty-one of the eighty or ninety wires leading from the New York office of the Western Union Telegraph Company 2,448,000 words, or 97,920 messages of twenty-five words each, a day. This amount cannot be obtained. Forty messages an hour are easily transmitted by a good operator over a through line, and this number could be sent every hour by relays of operators. This estimate gives 1,224,000 words, or 48,960 messages. On through and local lines a deduction of one half for twelve hours of the day, during which the local lines are open, must be made,—918,000 words, or 36,720 messages, on through and local lines. The average number actually transmitted on these fifty-one wires is 184,378 words, or 7,375 messages. 733,622 more words, or 29,340 more messages might daily be transmitted over these lines. If the present business could be distributed over all the hours of the day, or if there were sufficient business for all the wires the whole day, the rates could be largely reduced.
“Nearly eighteen hours of each day the wires are idle, yet a considerable portion of the expenses of the line are no greater than they would be if messages were transmitted the whole time. Interest, depreciation, and repairs, office rent, salaries, and general management are the same, whether much or little business is transacted. These items constitute about one third of all the expenses on the Western Union line. The other expenses will not be increased in proportion to the increase of the time.”
In reply to the above, we assert that 2,000 words an hour are not easily transmitted by a good operator over a single wire. There are operators who can send at this rate for a short time, but they are very few in number, and none of them could maintain this rate of speed for any length of time. It must be recollected that a message must be copied with a pen as rapidly as it is sent. Now, we doubt if Mr. Hubbard even can write 2,000 words legibly within an hour, with pen and ink. It is well known that the celebrated horse Dexter has trotted a mile in the unprecedented 70time of 2.17, but would it not be absurd to state, on that account, that every good horse can easily trot twenty-six miles an hour? Why, Dexter himself cannot keep up this rate of speed for even a quarter of an hour. Because a celebrated pedestrian walked a hundred miles in twenty-four hours, would it be just to say that every good walker can easily walk 36,500 miles per annum? A man in California rode three hundred miles in twenty-four hours; would it be honest, therefore, to say that every good horseman can easily ride 9,000 miles a month? The maximum speed of the best operators is 1,500 words per hour, but the average speed of the best is very much below this.
The amount of business done upon a wire in a given time is vastly greater in this country than in any other. In Europe there are 355,218 miles of wire, while in the United States there are less than one third as many, and yet the wires in this country transmit more telegraphic matter per annum than all the lines in Europe. This almost incredible fact is explained by the superior character and ability of our operating staff. In Europe they still use recording instruments, and slowly and laboriously pick out their messages upon strips of paper. Here, on the contrary, every operator—except in the small villages—reads by sound, and does three times as much work upon a wire as the poorly paid and inefficient European operator. Now, this being the case,—and the statistics prove it,—it can hardly be pretended that our company gets much less out of its wires than they can reasonably perform, and yet Mr. Hubbard says we “could easily send on fifty-one wires 97,920 messages per day, while in reality we only send 7,375.” Here is a difference between theory and practice that beats even Dexter’s 2.17 as the rate of speed which every horse in America can average.
IMPOSSIBILITY OF UTILIZING THE TELEGRAPH LINES BY NIGHT AS WELL AS DAY.
Mr. Hubbard says, “If the present business could be distributed over all the hours of the day, or if there were sufficient business for all the wires the whole day, the rates could be largely reduced”; but neither of these propositions can be realized. The telegraph is an errand-boy which every one uses when the exigency 71requires it, and which no one will use unnecessarily, even though it work for nothing. In order to utilize the wires during those portions of the day and night when they are comparatively idle, the Western Union Telegraph Company adopted the following rates for night messages:—
“This company will transmit messages between the principal cities on its lines east of St. Louis and New Orleans, both inclusive, during the night, and deliver the same the succeeding morning, on the following terms: For a message of 20 words or less, the usual tolls on a ten-word message will be charged. For a message of more than 20 words, and not exceeding 60 words, twice the usual tolls on a ten-word message will be charged. For a message of more than 60 words, and not exceeding 120 words, three times the usual tolls on a ten-word message will be charged. For each additional 100 words, or part thereof, in excess of 120 words, the usual tolls on a ten-word message will be charged in addition. Such messages will be known as NIGHT MESSAGES. They will be received for transmission at any time during the day or evening, and will be sent during the succeeding night. No additional charge will be made for cipher messages.”
The very moderate success of our night-message experiment, notwithstanding the large inducements offered, proves that the use of the telegraph is required not merely for communication, but for emergency and despatch. It is also a fact worthy of notice, that very little of this business is done between Boston, New York, Philadelphia, Baltimore, and Washington, notwithstanding the low rates, whereby over a hundred words can be transmitted for a dollar. It is done mainly between remote places like Chicago, Milwaukee, St. Louis, Cincinnati, Memphis, and New Orleans, communication between which by mail requires from two to four days.
In support of this theory we submit a statement of the night-message business between New York City and all points on our lines for the months of March, July, and October. These months represent fairly the varying phases of our business in respect to trade in different sections of the country at different seasons of the year.
The total number of night messages sent and received between 72New York City and all places on our lines for the three months named was 6,273, divided as follows:—
Between New York and Charleston, S. C. 276
Between New York and Chicago, Ill. 904
Between New York and Cincinnati, O. 326
Between New York and St. Louis, Mo. 433
Between New York and Milwaukee, Wis. 176
Between New York and Memphis, Tenn. 316
Between New York and Montgomery, Ala. 176
Between New York and Mobile, Ala. 402
Between New York and New Orleans, La. 1,195
Between New York and All other places 2,069
Total, 6,273
Our night-message experiment has proved that the telegraph will not be used at night, at any tariff, except to a moderate extent and between distant points.
The absurdity of placing the telegraph and postal systems in the same category has been fully shown on pages 43 and 44. Mr. Hubbard appears to have read Mr. Scudamore’s charges against the English system, and applied them literally to the telegraphs of this country. Unfortunately, however, charges which may be true as applied to the companies operating the telegraphs in the United Kingdom have no pertinency when reproduced as the shortcomings of the American system.
PROPOSED INCORPORATION OF THE UNITED STATES POSTAL TELEGRAPH COMPANY.
Mr. Hubbard says:—
“It is not considered expedient either for the government to purchase the existing lines, or to construct and operate lines. How, then, can the desired results be best attained? The Post-Office Department has no facilities of its own for the transmission of correspondence either by rail or telegraph. It contracts with the railroad companies for carrying the mail, and it is proposed that it shall contract with a telegraph company for transmitting messages.
“A bill was introduced at the last session of Congress, and referred to the committee on Post Roads and Routes, to incorporate the ‘United States Postal Telegraph Company, and to establish a postal system.’
73“The first, second, third, fourth, and fifth sections of the bill incorporate the company, with power to construct lines on all the post roads and routes of the country.
“The sixth section authorizes the Postmaster-General to receive bids from any telegraph company for the transmission by telegraph of messages received and delivered through the post-office, to all cities and villages of 5,000 inhabitants and over, and to towns on the line of the telegraph, where stations may be established by order of the Postmaster-General.
“The seventh section authorizes the Postmaster-General to contract for the transmission by telegraph of messages with the company that will engage to transmit them for the least sum, provided such sum does not exceed twenty-five cents, including five cents postage for each message of twenty words, including date, address, and signature, for each and every 500 miles or fractional part thereof the message may be transmitted, with five cents for each added five words. All messages to be prepaid by stamps, or written on stamped paper.
“Messages to be received at any and all post-offices, street-boxes, or other receptacles for letters, and to be delivered by special carrier without extra expense.
“Messages requiring immediate despatch to have priority of transmission on payment of extra rates.
“The effect of the proposed reduction will be better appreciated by comparing the present and proposed rates.
DISTANCES. Present Rates. Proposed Rates. Reduction. Pro Rata Reduction.
To stations within 500 miles $0.41 $0.30 $0.11 26 per ct.
To stations between 500 and 1,000 miles 1.43 0.55 0.88 62 „
To stations between 1,000 and 1,500 miles 2.41 0.81 1.60 67 „
To stations between 1,500 and 2,000 miles 3.41 1.47 1.94 56 „
Averages $1.00 $0.47 $0.53 53 „
MESSAGES DELIVERED WITHIN A MILE OF THE OFFICE FREE.
The rule was established coincident with the introduction of the telegraph in the United States to deliver all messages in the town within a mile of the receiving office free. Special and free delivery should be the rule as far as practicable. And yet it is impossible, without rendering the telegraph of no avail in important emergencies, to establish free delivery everywhere. A message from an Eastern city to a Western village announcing 74peril, disaster, or death is addressed to a person two or three miles from the telegraph station. The charge for transmitting this message is, say, fifty cents. Two modes of delivery are presented,—one to drop it in the post-office, where it may lie until the next day; the other, to hire a conveyance, and send a special messenger with it to the person addressed. The cost of this special service will vary from one dollar to two dollars. Our practice is to deliver by special messenger, and charge therefor the actual cost of the service.
EUROPEAN CHARGES FOR DELIVERING TELEGRAMS.
A similar custom prevails in Europe, as will appear from the following extracts from the rules and regulations applicable to stations in the Austro-Germanic Telegraph Union, which comprises Austria, Prussia, Hanover, Holland, Saxony, Wurtemburg, the German Duchies, also France and the whole South of Europe:
Charges for Postage, Foot Messenger, and Estafette.
The instruction for forwarding despatches beyond Telegraph lines must be inserted in messages immediately after receiver’s address and charged for; messages with no instructions will be sent on from Terminal Telegraph Station by post.
The sender is responsible for an insufficient address, and can only rectify the same by sending and paying for a new despatch.
By Post (as Registered Letter) to all places in Europe, 0s. 10d.
By Post (as Registered Letter) to all other places, 2s. 0d.
Messages addressed to “Poste Restante” are subjected to the above charges for postage.
By Express (Foot Messenger) within seven English miles, 2s. 6d.
By Estafette (Mounted Messenger) a charge must be made at the rate of 2s. 6d. per three English miles for countries comprised in the Austro-Germanic Union, but for other towns the charge is 1s. 6d. per English mile. If, however, the distance is unknown, a sufficient deposit must be taken.
All charges to be prepaid by sender.
75
TELEGRAMS TO BE PLACED IN THE STREET BOXES.
Mr. Hubbard’s proposition to put telegrams into street-boxes is simply absurd. Telegrams are always of an important nature, and need despatch. Imagine a message announcing sickness, death, or any other circumstance, being dropped in the street box, to be taken out when the carrier happens round! As for post-offices, how many are there in any of the large cities even? Few have more than one, and this is closed when a mail arrives,—a circumstance that seems to have rendered the closed condition the normal one with many post-offices.
To give an idea of the extent of present facilities in the principal cities, the following statement, showing the number of telegraph offices now open, is submitted:—
New York, 100 offices.
Philadelphia, 35 „
Baltimore, 19 „
Washington, 16 „
Boston, 24 „
Chicago, 22 „
Cincinnati, 21 „
PRIVILEGED PERSONS TO HAVE PRIORITY IN THE USE OF THE WIRES.
Mr. Hubbard’s plan of allowing “messages requiring immediate despatch to have priority of transmission on payment of extra rates,” would abolish the rule which has always been observed since the establishment of the telegraph in this country, “first come first served,” and give privileged persons the priority in the use of the wires. What an excellent opportunity this would afford speculative combinations (like that which locked up twenty millions of currency in Wall Street a short time ago) to extend their operations all over the country, by practically controlling the telegraph?
This plan would not answer at all. No system of variation of rate is feasible, consistently with public policy, but that which offers a lower rate for business which will consent to be delayed until another day.
In regard to the establishment of a money-order system by telegraph, 76we would say that we have long done something in the way of transmitting deposits and money orders by telegraph. We have made no effort to bring it prominently before the public, with a view to extending this department of our business, for the reason that as an established system it would be comparatively easy for rogues to abuse it. It is only resorted to in cases of great emergency, where money orders by post cannot be delivered in time to meet the necessities of the case. It is also confined mainly to the transmission of small sums. It involves necessarily the sending of two messages. Large amounts required in commercial transactions are daily transmitted or exchanged in this manner by the regular banking houses in all the principal cities.
PROPOSITION TO OPERATE TELEGRAPHS AT A LOSS, AND MAKE MONEY BY IT.
Mr. Hubbard proposes, by his new plan, to send telegrams at an average reduction of 53 per cent from the present charges, which we have shown to be 25 per cent less than the European rates. Now, the total receipts of the Western Union Telegraph Company for the year ending June 30, 1867, were $6,568,925, and a reduction of 53 per cent would leave $3,087,405.
The working expenses for the year were $3,944,005
Receipts with Mr. Hubbard’s proposed tariff, 3,087,405
Loss for the year $856,600
Mr. Hubbard acknowledges that neither the government nor any company can transmit messages at the above rates without loss, but claims that “a company with well-constructed lines, built for cash, can transmit messages at these rates, in connection with the post-office, and realize a large profit.” Precisely how this is to be done, or what the lines “built for cash” have got to do about it, does not appear. Mr. Hubbard says in his pamphlet that “the largest part of the lines of the Western Union Company were constructed before the rise in prices, and on a gold basis.” Now, if he means that lines built on a paper basis can be worked cheaper than those constructed on a gold one, we would be glad to hear his reasons for so singular a notion.
77
SPECULATIVE TELEGRAPH SCHEMES.
We consider it our duty to say a word concerning the swarm of adventurers who are canvassing the country for subscriptions to utterly worthless telegraph stock, and who are besieging the halls of Congress every year for some recognition or advantage which shall enable them the more readily to impose upon the public.
The National Telegraph Company is an example in point. This concern, which claims to have organized two years ago under an act of Congress, and which has filled the country with runners begging for subscriptions to its stock, has never set a pole.
The losses which have occurred in the operation of competing lines are enormous. The country is full of people who have lost money in these schemes, which, after a brief existence, are wound up and their effects disposed of by the sheriff.
The present condition of all the opposition lines is very precarious. The Franklin Company was made by a consolidation of the Insulated Company, having four wires between Boston and Washington, and the old Franklin Company, having two wires between Boston and New York. The capital of the former was $1,250,000, and of the latter $500,000. The new organization has been in operation about two years, during which time its receipts have fallen so far below its expenses that it has contracted a debt of $125,000; and its lines have deteriorated to such an extent that a large sum would have to be expended to put them in proper condition for business. The stock of such companies is valueless as an investment, and, in respect to some of them, it is doubtful if their property could be sold for a sum sufficient to pay their indebtedness.
The Atlantic and Pacific Company has a line from New York to Chicago, via Albany, Buffalo, Cleveland, and Sandusky, averaging about two wires for each line. Its lines are built under a contract to take stock in payment, at the rate of $1,666.66 per mile for a line of two wires.
The operation of these separate and irresponsible lines, during 78the brief period of their existence, retards the progress of legitimate telegraphy, and impairs the general unity of the system. Any legislation of Congress which is made to further such schemes has the direct effect of aiding a class of speculators to fleece a credulous public, by inducing them to invest their money in the construction of lines which never have paid, and never can pay, the expenses of operating them, and which are of no benefit to any persons but those who originate them, and profit by their construction.
MORE STARTLING INVENTIONS FOR RAPID TELEGRAPHING.
We quote from Mr. Hubbard:—
“Instruments have been recently invented, and are in operation, either in England or in this country, by which two great hindrances to the efficiency of the telegraph are remedied. Mr. Stearns, president of the Franklin Telegraph Company, has invented an instrument by which messages are transmitted both ways at the same time, on the same wire, thus doubling its capacity without any increase of expense. Sir Charles Wheatstone, in England, has invented an instrument by which double the number of words can be transmitted and received on the same wire, at an increased expense in the preparation of the message for transmission. Instruments are also in operation in Great Britain, worked by boys, after instruction of one or two days.”
In regard to Mr. Stearns’s apparatus for working both ways over one wire at the same time, we are compelled to say there is nothing new in the idea. Doctor Gintl, of Germany, invented it many years ago, and it was published in an Italian work,[20] with steel-plate illustration, issued in 1861, translated into English by George B. Prescott, of Albany, and published in the Telegraphic Journal, London, May, 1864. Moses G. Farmer, Esq., of Boston, invented another apparatus for doing the same thing, and worked it between Boston and Portland, in 1849. If there is any practical value in this apparatus it is open—like the Morse Telegraph—to the use of all. Sir Charles Wheatstone’s apparatus, by which double the number of words can be received on the same wire, will probably prove of the same practical value as 79many similar inventions, which in theory can transmit intelligence with the greatest accuracy at the astonishing rate of five or ten thousand words an hour, but in practice have never proved of the slightest value.
It is suggestive, that, of more than a hundred inventions designed to supersede the Morse telegraph, the latter instrument is used to-day on more than 490,000 miles of wire out of the total of 500,000 in operation in all parts of the world. Mr. Hubbard’s assertion, “that instruments are in operation in Great Britain, worked by boys, after instruction of one or two days,” may be true. From all accounts, the use of boys—and charity boys at that—has been the great curse of telegraphy in England, until the saying has become common there, when describing a remarkably poor specimen of chirography, that “it is written as badly as a telegraph despatch.” We hope the day is far distant when our messages shall be transmitted by boys with one or two days’ instruction.
We hardly need say that it is for our interest to adopt every improvement whereby the despatch of business within a given time can be materially increased. It is certainly cheaper for us to provide new instruments, at almost any cost which will ever be charged therefor, than to put up, keep in repair, and operate additional wires to produce the same results.
ERRONEOUS TABLE OF EUROPEAN STATISTICS.
We reproduce Mr. Hubbard’s statistical table for the purpose of pointing out some very serious errors contained in it.
In U. S. Gold. In U. S. Gold.[21]
The Austrian florin is rated by Mr. Hubbard at $0.41 True value $0.48
Franc is rated by Mr. Hubbard at .2 True value .19
£ Sterling is rated by Mr. Hubbard at 4.84 True value 4.86
Lira is rated by Mr. Hubbard at .186 10 True value .19
Dollar of Norway is rated by Mr. Hubbard at .53 True value 1.09
Rouble is rated by Mr. Hubbard at .213 7 True value .77½
Dollar of Spain is rated by Mr. Hubbard at 1.00 True value 1.04½
80These errors, in reducing foreign money into United States gold currency caused the following discrepancies in gross receipts for the year:—
Value in United States Gold, according to Table. True Value in United States Gold Difference.
Austria, $674,344 $789,476.16 $115,132.16
England, 2,481,500 2,491,756.02 10,256.02
Italy, 766,750 782,859.09 16,109.09
Norway, 182,131 374,573.15 192,442.15
Russia, 372,309 1,451,310.72 1,079,001.72
Spain, 554,475 576,654.00 22,179.00
Discrepancy, $1,435,120.14
France, 1,541,518 1,464,442.10 77,075.90
Belgium, 194,442 182,611.28 11,830.72
Bavaria, 136,894 132,383.26 4,510.74
Discrepancy, $93,417.36
Thus we find that in reproducing from their various currencies the gross telegraphic receipts of six nations into United States gold, Mr. Hubbard makes the amount $1,435,120.14 less than it should be, and in reducing those of three other countries into our coin he makes the amount $93,417.36 more than it should be.
He has also failed to give the receipts of the three great Submarine Telegraph Companies, which transact so important an amount of continental telegraph business.
Mr. Hubbard gives the number of stations in Switzerland at 333, while the best English authority[22] gives it at 252. He also gives the number of messages transmitted in England, in 1866, as 6,127,000, while Mr. Scudamore, in his reply to the statement of the Electric and International Telegraph Company, published in May, 1868,[23] points out the fact that only 5,781,189 messages were transmitted throughout Great Britain and Ireland during that year.
It will be observed that Mr. Hubbard has “estimated”—that is, guessed at—the number of and receipts for telegrams in the Netherlands, Denmark, Sweden, Turkey, and Greece. He estimates the average cost per message to be 42 cents; but as we happen to know that the average cost in Denmark was more than twice this amount, we are not willing to accept any of his estimates.
81
ERRONEOUS TABLE OF EUROPEAN STATISTICS.
From Mr. Hubbard’s pamphlet:—
Statistics of the Telegraph in Europe for the Year 1866.
Name of Country. Number of Stations Miles of Wire. Rates in 1866. Number of Messages. Receipts.
England 2,151 80,466 1 shilling. 6,127,000 £ sterling 521,707 × $4.84 = $2,481,500.00
France 1,209 68,687 ½ and 1 franc. 2,842,554 Francs 7,707,590 × 0.20 = 1,541.518.00
Austria 851 73,854 2,507,472 Florins 1,644,742 × 0.41 = 674,344.00
Prussia 538 55,149 1,964,003 Thalers 1,275,785 × 0.72 = 918,565.00
Belgium 356 6,146 ½ franc. 1,128,005 Francs 961,112 × 0.20 = 194,442.00
Switzerland 333 3,717 ½ franc. 668,916 Francs 684,471 × 0.20 = 136,894.00
Bavaria 4,945 Florins 322,876 × 0.41 = 132,383.00
Norway 73 2,710 269,375 Rix Dolls. 343,645 × 0.53 = 182,131.00
Russia 308 37,330 838,653 Roubles 1,872,659 × 0.213 7 = 372,309.00
Italy 529 22,214 1,760,889 Lira 4,120,311 × 0.186 10 = 766,750.00
Spain 533,376 Dollars 554,475 × 1.00 = 554,475.00
Netherlands Denmark Sweden Turkey Greece 1,500,000 × 0.42 = 630,000.00
Total Messages 18,640,243 Total receipts $8,585,311.00
Average rate per message in Europe $0.42
82
EUROPEAN TELEGRAMS COUNTED SEVERAL TIMES.
An examination of Mr. Hubbard’s statement of the number of messages sent in Europe, in 1866, will reveal the fact that he has included inland, international, and transit messages to make up the grand total. In this way he has counted the same message several times. For instance, messages sent from England to France, or any two contiguous countries, would be counted in each. Messages between France and Germany would be counted in France and Germany as international messages, and in Belgium and perhaps some other country as transit. The same would be the case between all European countries whose territories do not border on each other. A message going from France to Russia, or from England to Turkey, might be counted a dozen times.
In the United States each message is counted but once, although it may traverse thousands of miles in reaching its place of destination.
We have not the statistics to show what proportion the legitimate number of messages sent bears to this fictitious number; but by referring to the Belgian table it will be seen that 692,536 inland and 306,596 international messages were sent in 1866, in a total of 1,128,005. Taking this as a fair average for the whole of Europe, we shall find that only 14,012,795 messages were sent in 1866, at an expense, in United States currency, of $15,286,911.61, or about $1.09 each.
LABOR THE PRINCIPAL ELEMENT OF EXPENSE IN OPERATING TELEGRAPHS.
The principal element of expense in our business is the cost of labor.[24] If we can do our work as cheaply as another party, it is clear that rates can never be reduced below the point at which receipts and expenses are equal. Any material increase of business, no matter what the rates may be, must be attended with increased expense. And when the capacity of the wires provided for a particular 83service is exhausted, a new question is presented by the necessity for providing additional facilities. By the extension of our lines this year west of Chicago, and by the moderate increase in the volume of our business in that section of the country, it will probably become necessary during next year to provide two additional wires between Chicago and the Atlantic coast. The cost of these wires, if erected on poles now standing, will be about $120,000. We shall also be obliged to put up an additional wire between Washington and New Orleans, and between the latter place and Louisville. The cost of maintaining the lines will be somewhat increased by the addition of these wires, and the cost of operating at each end, and looking after them at intermediate points, must also be included. How is the additional capital necessary to provide such increased facilities to be raised? By reducing rates, the result of which is, that, even if gross receipts are not diminished, the expenses are increased? Is it not by gradually increasing lines out of current profits, and as gradually reducing rates after facilities for an enlarged business have been provided?
PREVAILING ERROR OF ALL THEORIZERS ON THE BUSINESS OF TELEGRAPHING.
All theorizers upon the subject of the telegraph fall into the error that the amount of business which may be done at any point (the rates being low enough) is in the ratio of population. An investigation of the subject will show this to be entirely erroneous. Three years ago, when the subject of telegraphic communication between the Eastern and Western continents was discussed by those most intimately connected with the enterprise, no one estimated the number of messages which would pass between the two continents, daily, at a rate of $50 gold for ten words, below 500. But few placed the figures so low. Most of them estimated the number at two or three times this minimum.
In 1863 Mr. Cyrus W. Field made the following remarks before the Chamber of Commerce of New York, in relation to the probable amount of business that would be done between Europe and America when communication by telegraph should be established: “To express my own opinion, from pretty large experience on the 84subject, I do not believe that ten cables would begin to do the work which would, in a short time, be given to it.”
At the banquet given in London, in 1864, to inaugurate the renewed attempt by the Atlantic Telegraph Company to unite Europe and America by means of the Atlantic cable, Mr. Cromwell F. Varley made the following remarks touching the amount of business that would be offered for transmission over the cable: “I feel great confidence that, when once a cable is successfully laid across the Atlantic, the demands upon it will be so great that you will have to lay one or two per annum for the next twenty years, or even more.”
Their disappointment was, therefore, very great when, after the Atlantic Cable was in operation, it was found that the daily average at the $100 tariff was but 29 messages, and at the $50 tariff, which was in operation thirteen months, it was but 64. At the $25 rate the average advanced to 131; and although the rate has been still further reduced to $16.85, the average is but 201. This illustration is sufficient to prove the fallacy of all reasoning concerning telegraph business based merely upon population. We venture the prediction that, at the rate of $5 between Europe and America, the number of messages which would pass per day would never equal the number exchanged daily between New York on one hand, and Philadelphia and Boston on the other. The reason is simply this: The number of messages which will pass within a given time between two points depends, first, upon a reasonable charge for transmission,—a charge conveniently within the means of those having occasion to communicate; and secondly and mainly, upon the number of people at either extreme having intimate business relations with those at the other. The vast commerce of the Old World and the New is not exchanged in detail, but in bulk. A few banking houses on each side make all the exchanges for both continents, and the agricultural products and the manufactures of both are also exchanged in substantially the same manner.
We have shown how fallacious is the claim that the increase of business is dependent upon the tariff, by the statistics of our own and foreign countries, by which it appears that business has sometimes largely increased at an advanced rate. We do not desire 85to be understood, however, as saying that low tariffs, under similar circumstances, will not bring more business than high ones. But we do say that it is susceptible of proof, that the minimum rate is undoubtedly much higher than most of those who theorize upon this subject are willing to believe. Take the case of the Atlantic Cable as an illustration. During the three months at which the tariff was $100, and the daily average of messages 29, the receipts per day were £505. During the thirteen months, at the average of 64 messages daily, the receipts were £579. During the nine months, at the average of 131 messages per day, the receipts were £635. And for the two months since the rates were reduced to $16, the daily average has been 201 messages, and the average receipts £596.
Now it happens, fortunately for the Cable Company, that the present volume of business is considerably less than the capacity of their cables; so that the increase of that business has been attended with but a very slight additional expense, the cost to operate being the same at offices open day and night, whether operators are occupied all or only a part of the time. But suppose, for illustration, that the limit of the capacities of the cables will be reached when the average number of messages per day is 250. To undertake to transmit any number beyond this without further facilities would result in crowding and confusing the business to an extent which would inevitably produce dissatisfaction. On the other hand, to provide an additional cable would cost a sum of money which it might be exceedingly difficult to raise. It seems proper, therefore, that the profits from this business should always be considerably more than enough to yield a proper return for the capital invested, so that greater facilities may be provided out of surplus profits; and, as facilities are increased, rates may be gradually reduced, until, by judiciously pursuing this course, the charges for telegraphing may be materially diminished, without endangering the revenues to which owners of telegraph property are justly entitled.
86
Statistics of Traffic through the Atlantic Cables from July 28, 1866, to November 1, 1868.
Number of Messages per Month. Daily Average No. of Messages. Gross Amount of Receipts accruing to the Two Atlantic Cables, between Valentia and Heart’s Content. Average Amount per Day.
1,104 } 29 From July 28th to 31st Aug., 1866, under £20 Tariff [25]£500 } £505
837 } From Sept. 1st to 30th 1866, under £20 Tariff 456 }
831 } From Oct. 1st to 31st 1866, under £20 Tariff 491 }
1,530 } 64 From Nov. 1st to 30th 1866, under £10 Tariff [26]502 } £579
1,582 } From Dec. 1st to 31st 1866, under £10 Tariff 493 }
1,686 } From Jan. 1st to 31st 1867, under £10 Tariff 466 }
1,764 } From Feb. 1st to 28th 1867, under £10 Tariff 549 }
2,147 } From March 1st to 31st 1867, under £10 Tariff 666 }
2,624 } From April 1st to 30th 1867, under £10 Tariff 722 }
2,262 } From May 1st to 31st 1867, under £10 Tariff 705 }
1,843 } From June 1st to 30th 1867, under £10 Tariff 597 }
1,432 } From July 1st to 27th 1867, under £10 Tariff 542 }
1,693 } From July 18th to 31st Aug., 1867, under £10 Tariff 401 }
1,860 } From Sept. 1st to 30th 1867, under £10 Tariff 515 }
2,505 } From Oct. 1st to 31st 1867, under £10 Tariff [27]715 }
2,292 } From Nov. 1st to 30th 1867, under £10 Tariff [27]661 }
3,901 } 131 From Dec. 1st to 31st 1867, under £5.5 Tariff [27]732 } £635
4,739 } From Jan. 1st to 31st 1868, under £5.5 Tariff [27]756 }
5,128 } From Feb. 1st to 29th 1868, under £5.5 Tariff [27]860 }
4,507 } From March 1st to 31st 1868, under £5.5 Tariff [27]707 }
4,320 } From April 1st to 30th 1868, under £5.5 Tariff [27]718 }
3,538 } From May 1st to 31st 1868, under £5.5 Tariff 550 }
2,884 } From June 1st to 30th 1868, under £5.5 Tariff 447 }
3,217 } From July 1st to 31st 1868, under £5.5 Tariff 490 }
3,740 } From Aug. 1st to 31st 1868, under £5.5 Tariff 558 }
5,053 } 201 From Sept. 1st to 30th 1868, under £3.7.6. Tariff 501 } £596
6,341 } From Oct. 1st to 31st 1868, under £3.7.6. Tariff 615 }
6,877 } From Nov. 1st to 30th 1868, under £3.7.6. Tariff 670 }
A single wire between New York and Plaister Cove, Cape Breton, the eastern terminus of the Western Union Telegraph Company’s lines, not only promptly transmits all the telegraphic business that is done between Europe and America, but every message is telegraphed back for comparison with the original, to insure correctness.
87