Telephony And Involved Interests

Frorn the inception of the telephone enterprise in 1876 until late in 1879 there were two active competitors in antagonista for the monopoly of the wliole telephone business. These com petitors were the Western Union Tele graph Company and American Bel Telephone Company. As the result of the suits of law anc for various other reasons, both compan ies found it convenient to enter into an iron-clad agreement - the now famous contract of 1879. This agreement or contract, haviug a life of 17 years, anc therefore expirmg in November of this year, secured to the American Bel Company the rnonópoty of the telephone business on the conditions that the Bel Company should refrain froin telegraph ie work, from the telephonic transmis sion of dispatch business and from the handling of press news matter ; also on the condition that the Bell Company should pay to the Western Union Comp any 20;, of the net telephone receipts. Provisions were made for a possible renewal of this contract. If we look into the past of telephone matters, we shall see that the security to both companies in this contract rest ed wholly in the power of the Bell Comp any to base its monopoly on the funda mental Bell patents; for because of these patents no competitor o the Western Union Company couk uüdertakg long-distance telephony for the haudling of news or dispateh work While by this contract between the two corporations the Western Union Telegraph Company tried to limit the the distance over which telephonic mes sages should be conveyed, yet the Bel Company has not only managed to parallel with its long-distance telephone lines the Western Union telegraph lines thronghout the Northeastern section of country, from Maine to Minnesota and South to the District of Columbia and Kentucky, but also without tion :t is enabled to handle press work as well as well as dispatch business, for which it charges rates as per Western Union scale. Let us now discuss the possibilities o the long-distance telephone interests at the expiration of the 1879 contract. The continuance of the Bell Telephone monopoly now depends upon the validity of the Berliner patent of 1891. The coming trial of the appeal of the United States against the Berliner patent before the Supreme Court of the United Ptates will not go into the merits of the Berliner patent only in so far as such merit has been bronght bef ore the lower courts. Therefore the defeat of the governrnent will not mean absolute security of the Bell Company whereas defeat of the Bell Company will mean an end to its monopoly. "We have therefore to consider the elephonic possibilities, with the Bell Company continued in its monopoly, and with the monopoly destroyed. Under a continuance of the Bell telefone monopoly, what is the probabiliy of a renewal or extensión of the Wesern-Union-Bell contract? It is hardly o be expeóted that the Bell Company will continue to pay the Western Union Company 20 per cent. of its net earnngs; for the same conditions do not now exist as obtained in 1879. STor is it ikely that the Bell Company will choose o be liinited in the nature and extent f its business ; for it is in a position by means of its long-distance lines to enter nto active competition for the ordinary elegraphic work. This would produce battle royal with the advantage on the ide of the Bell Company to the jeopary of the great vested interests of both he Western Union and Postal Tele;raph Companies. The possibility of an amalgamation of he Bell and Western Union Companies under the continuation of the Bell moopoly, while worth consideartion for tock-jobbing purposes, would not be pt to take place because the value of tie Western Union plant to the Bell Company would not be commensurate with its value to the Western Union Company. Much less wonld there be a iklihood of an amalgamation of the Bell, Western Union and Postal Companies. It is therefore of chief interest to the Vestern Union and to the Postal Comanje,s to see that the Bell monopoly is ot continued if such be in their power. If now the Bell monopoly be destroyd by reason of the invalidity of the Berliner 1891 patent, what are the teleraphic and and telephouic possibiliïes? Let us at once dispose of the numerus telephone companies now in the field triving to compete with the Bell Comany- such as the Harrison, the Standrd, the Home and others. These comanies can be of little importance as ompetitors because there is not the inentive to their success essential to bring api tal to meet the demands of so giganIc a competition. The only incentive hey possess is that of the possibility of ain under impossibly favorable circumtances. They have no large vested inerests at stake which would make it ssential that capital should hurry to he rescue and safety of such interests nder adverse circumstances. These companies have everything to gain and but little to lose. On the other hand, the vested interests of the Western Union and of the Postal Telegraph Companies are of such magnitude and importance that it is absolutely esssntial that, the Bell monopoly being destroyed, these companies take measures to protect their interests against the advent of a new coinpetitor for their business - a competitor, the Bell Telephone Conipany, so well entrenched and established that on the day of the expiration of the Bell-Western Union contract thousands of offices can be thrown open for the dispatcli of telegraphic and telephonic business between the important news and business centres at rates far below those now in force, It is not to be presumed that each of these companies is not fully alive to the possibilities and necessities of the situation ; but it is not without importance to discuss the conditions which each of these interests have to face in the future. Therefore the telephone monopoly and the Bell-Western Union contract being expired, what are the probabilities of this contract being rene wed? The conditions now are such that this contract would not prevent the Postal Conipany, or any other company, for that matter, from undertaking long-distance telephony in competition for dispatch work, and therefore such contract would only handicap the Western Union Company in its business. Therefore such contracts have to be modified and the Pitetal Company taken in ; and by reason of gigantic power such a eombination would have to monopolize the field in order to hold together. There is a possibility of an amalgamation of the Bell and AVestern Companies, but in this case they would be compelled to face the competition of the Postal Company and the influence of such other interests as would be antagonized. The Postal Telegraph Company, as a competitor of the Bell and AVestern Union Companies, whether combined or not, is of no small concern, for to protect its interests of necessity it must go into long-distance telephone work. The strength of the Postal Company as a competitor would reside, not in the strength of its vested capital so much as in the necessity that certain great interests of this country should not be subject to a monopoly of the telegraphic and telephonic business. It is these interests which, even if the above-mentioned three companies were to consolídate, would be compelled to enter the field in competition for its own protection. This interest is the newspaper press of this country. The same necessity which achieved the construction of the press cables to Europe will construct its long-distance telephone lines across this ctintinent, for it will not suffer itself to be at the mercy of any monopoly, there aeing no legal necessity for it. The gathering of news is of that importance which will warrant the establishment of a long-distance press telephonic and :elegraphic system to include every news centre in this country. Tliis sys.em would be entirely distinct from the ocal telephonic and telegraphic interests. Nor would it necessarily encroach upon the dispatcli business of the companies, except as competition should cause retaliation ; for should it become necessary to undertake dispatch work. Should it become desirable to antagonize ,he Bell Company it would only be necessary to radíate local telephone at each news centre. Therefore, we may look for a great truggle in the near future between hese great iuterests, the outcome of which will be to the advantage of the )ress and possibly to the business world at large. It is conclusiva from the above that it s of vital importance to American newspaper interests, whether they have yet ealized it or not, that the Bell Company hould not be sustained its monopoly, ïvery energy of this great power should )i brought to bear to achieve the end of ,he telephone monopoly, if such can )e done in justice and in equity. ai i