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 government, 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:—

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 reduces 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 estimate 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

The English rate for

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, while 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 proportioned 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.”

Mr. 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.

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 Company 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, 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.”

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 be 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.

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.