Publication: Electrical Review
New York, NY, United States
Western Union vs. Baltimore and Ohio.
The purchase of the National Telegraph Company's lines by the Baltimore and Ohio Telegraph Company, and the plan of general extension which the last-named Company has conceived and is about to execute, may fairly be said to solve the problem which for some time has been prominently before Congress for solution. If the Baltimore and Ohio Telegraph Company was an insignificant organization, whose directors were little better than stock-jobbers, anxious to make a valuable property, only that the price of their treachery to the people, to be exacted from the Western Union should be enhanced, it might expect nothing from the REVIEW but exposure. But such is, happily, not the case. The Baltimore and Ohio Telegraph Company is of the most reliable kind. It is supported and controlled by the Baltimore and Ohio Railroad, and should it carry out its plans, will constitute the first genuine rival to Western Union that has appeared in the telegraphic field.
There are no Jay Goulds behind the new competitor with Western Union, but, on the contrary, men of well known integrity, who are not known, as Jay Gould is, for stock-jobbing, hypocrisy, and unblushing rascality.
If the new company fulfills the promise of its Spring, there will scarcely be any need of either a government telegraph — that is for general business — or for government control.
For the new company, unencumbered with a load of eighty millions of dollars to pay interest on, will, likely enough prove, when fairly started, more than a match for Western Union, with its load of stock and its stock-jobbing management.
The new company proposes, so soon as the frost is out of the ground, to begin building its main and adjunct lines, but besides these and still more important, are the arrangements which it has already made with a number of railroads for leasing their telegraph lines when their contracts with Western Union shall have expired. In accordance with this, the New Jersey Central Railroad notified the Western Union that the contract between them which is about to terminate will not be renewed.
It looks as though the coming year is going to be a somewhat unfortunate one for telegraph and cable monopolies. If we read the telegraph horoscope correctly, we should predict that very heavy weather will prevail in the vicinity of Western Union, and that the old hulk, unless very skillfully managed, will get into the trough of the sea, or, as the sailors say, athwart seas on account of her being so top-heavy.
Should this be the case, some of the crew will be compelled to unload. Flurries of unfavorable weather, and a painful frequency of black squalls and uncanny weather, have already been reported from abroad, where the Anglo-American Cable Company, which may be looked upon as a co-conspirator with the Western Union against public interests, is having a shocking time. It is only a short time ago that they adopted Jay Gould's tactics, and they were scarcely over congratulating themselves upon their immense success in the little game of extortion — their stock having been in active demand at ridiculously high rates — when, lo! the Bennett-Mackay storm caught them with all their sails set, and was like to have overturned them entirely. The party righted their old hulk, however, the color gradually got back again into their faces, the nervous twitching of the knees ceased, and, making up their minds that it was only a passing squall, demanded of each other, "Who's afeard?" But Mackay writes to the London Times that the Bennett-Mackay Cable Company could not be induced, under any circumstances, to sell out, and propose to carry on a cable business in good faith with the public. This is really too much, and the Nine Cables Monopoly Company's stock again has the bottom knocked out of it.
But the worst is not yet come. Another cable is to be laid by the Merchants' Cable Company, The Merchants' Telegraph and Cable Company have filed articles of association in the County Clerk's office. The incorporators of the new line are Thomas L. James, Anderson Fowler, C. D. Borden, Edward A. Quintard. David Bingham, William A. Cole, Edwin R. Livermore, Henry W. Edye, Adolph D. Strauss, John H. Herbert, John F. Plummer, Edward H. Tobey, and Vernon H. Brown. The immediate purpose of this company is to lay a cable line from this city to London. The line will be a direct one, though the point of landing it on the English coast has not yet been selected. The organization originated in the Produce Exchange, and is principally intended to supply the needs of the members in the way of direct international communication. The articles provide for the future construction of lines to France and Germany. The capital stock is $13,000, in 130 shares of $100 each. Provision is made for an increase of the capital to an amount not exceeding $20,000,000. Active operations will be begun at the earliest practicable date.
Failing in an attempt to buy out the Bennett-Mackay scheme, or, at least, to dissuade its projectors from entering the cable field by all kinds of cable facilities, Gould determined to buy out the Nickel Plate telegraph lines, in order to keep them away from the Baltimore and Ohio people. Foiled here, he had himself interviewed, and said that the new additions to the Baltimore and Ohio Telegraph Company, viz., the National and the Nickel Plate, would have no effect upon the Western Union Telegraph Company, and that the latter-named company did not pay expenses. But such reckless falsehood was to be expected from Gould, who, only a few weeks before, had been doing his best to purchase this same line, as has been seen.
Mr. Robert Garrett, president of the Baltimore and Ohio Telegraph Company, when questioned concerning this Gould interview, said: "I am very glad to get an opportunity to say a few things to you about telegraph properties in this country. I was asked by Mr. Gould to become a director in the Atlantic and Pacific properly, and before deciding not to become one I went carefully over the books of that concern, and it will probably surprise the public to know that the total amount of cash put into the Atlantic and Pacific by Gould and his friends was less than a million of dollars. Mr. Gould afterward sold this property to the Western Union for I believe, $8,000,000. I did later on become a director in the American Union Telegraph Company. This property cost, I believe, about $4,000,000, although some additional sum in money may have been turned over to the Western Union when it purchased the American Union Company for $15,000,000, and upon the acquisition of these two most valuable properties an extra dividend of $15,000,000 of Western Union stock was declared. In other words, about $40,000,000 of Western Union capital to-day is represented by a cash expenditure of $5,000,000. Si