American Union Telegraph Company

FIGHTING THE MONOPOLY

ANOTHER INJUNCTION AGAINST

THE WESTERN UNION.

THE FRENCH CABLE COMPANY BRINGS A

SUIT IN THE UNITED STATES COURTS —

THE GROUNDS OF THEIR COMPLAINT —

JUDGE BLATCHFORD'S ORDER.

Another legal impediment was yesterday placed in the way of the consummation of the telegraph consolidation. The Compagnie Francaise du Telegraphe de Paris a New-York, commonly known as the French cable company, began a suit in the United States Circuit Court against the American Union, Atlantic and Pacific, and Western Union Telegraph Companies, and the Union Trust Company, and before noon Judge Blatchford granted a temporary injunction, which practically checks until the further order of the court the doing of any act whatever by any of the defendants looking to the completion of the arrangements for consolidation. The general features of the cause of action held by the French company against the defendant, the American Union Company, are similar to those in the recent action by the Direct United States Cable Company against the Atlantic and Pacific Company and the other defendants named. In June, 1879, the French company and the American Union entered into an agreement with each other for the exclusive interchange of business, the former being the only cable company and the latter the only land telegraph company which had not at that time entered into some such compact. This contract was made to run for 20 years. The contract went into effect on Jan. 23, 1880, the date when the French cable was completed, and the American Union Company observed the conditions of the agreement up to a few days ago. On Jan. 19 this year the telegraphic consolidation was agreed to by a contract between the three telegraph companies defendant, and the French Company avers that the Western Union Company, under the terms of that agreement, has undertaken three exclusive and hostile agreements which it cannot perform or keep, and which will render it impossible for the American Union or the Atlantic and Pacific Company to keep their contracts relating to the exclusive interchange of business between the various land lines on the one side and the cable companies of the other. This, the complainants allege, will retard and their business and hamper their efforts to furnish cheap telegraphy to the United States. On learning through the press and from other sources that the combination was being formed, Baron P. Cambourg, Manager of the French company, addressed a letter to Mr. D. H. Bates, First Vice-President of the American Union, in which he said:

"I have just received from our General Manager the following telegram: 'Please deliver following telegram to Mr. D. H. Bates, President of the American Union Telegraph Company, New York:

" 'We have not received any information from you regarding the amalgamation of your company with the other land line companies. Please let us know to what extent the cable companies will be affected by it. What will become of our exclusive contract with you, and how will be considered our agreement with your company ?

" 'Are the new cables of Mr. Jay Gould to be laid ? What are the arrangements, and what will be the communications in America of same ?

" 'We trust in you to protect the rights of the Compagnie Francaise du Telegraphe de Paris a New-York.

" 'Please be kind enough to send answer by cable with the least delay.' "

On Feb. 7 Mr. Bates sent to Baron Cambourg the following reply:

"Your communication of Feb. 3, inclosing copy of telegram form your General Manager to my address, asking for information regarding the amalgamation of this company with other land line companies has been received. In reply thereto, I beg to say that an amalgamation between your company and the Anglo-American and the Direct United States Cable Companies was announced in the public prints several months ago, but the facts and details in regard to it have not been communicated to us by your company, nor have we been informed how such consolidation of interests between the cable companies will affect this company.

"The inquires relative to the new cables should be made to the American Cable Construction Company, which company, I am informed, has engaged to lay them."

To this Baron Cambourg sent , on Feb. 9, the following response to Mr. Bates:

"I beg to acknowledge the receipt of your letter dated 7th inst., and I am sorry to say that I cannot agree with your statement regarding the so-called amalgamation of our company with the English cable companies. On Oct. 12, 1880, and as soon as I had received by with the full copy of our agreement with the English companies, I communicated it at once to Gen. Eckert, according to my instructions, giving him at the same time assurances that our contract with the American Union Telegraph Company would not be affected. About a fortnight after I received a printed copy of the same agreement and supplementary agreement, with directions to deliver it to Gen. Eckert, actual President of the American Union Telegraph Company, which I did. I had, a few days after, a conversation with yourself about that contract, the details of which you seemed to know very well at the time. I call your attention to the questions propounded by my company, which you have not yet answered."

Since the sending of this letter the French company has received no reply, either verbal or written, from the American Union Company. The complainant sets up the provisions of the act of Congress relating to telegraph companies passed July 24, 1866, with the amendments thereto, giving all such companies the right to use the military and post roads of the Government, and the public domain, and forbidding any company, on the acceptance of such privileges, from transferring its rights or privileges to any other parties whatever. For these reasons the complainant avers that the consolidation is and will be illegal, null, and void, and contrary to public law and public policy, as well as in derogation of the rights of complainant.

The attorneys for the plaintiff are Senator George F. Edmonds, Clarence A. Seward, Joseph H. Choate, Lewis L. Delafield, and Charles M. DaCosta. On their pleadings and affidavits accompanying them, which set out in great detail the facts above outlined, Judge Blatchford yesterday granted a preliminary injunction restraining the American Union Company from delivering, and the Western Union Company from receiving, any of the property, franchises, or contracts of the former company; also restraining the Western Union from changing, disposing of, or in any manner incumbering any of the franchises or property of the American Union, and the receipt or delivery of stock or certificates of stock, in furtherance of the consolidation through the Union Trust Company as Trustee, is also enjoined and prohibited. The return of the order is set down for Thursday next, the same time as the hearing is fixed for on the motion to continue the injunction pending litigation in the case of the Direct Cable Company against the same defendants.