466 oe FOREIGN RELATIONS.

pence more for each word to Washington ; nine pence more for each
word to Chicago; and fifteen pence more for each word to San Fran-
cisco. This, with exchange, and the present ditference between gold
and the United States currency, is, for that part of the service which
lies beyond New York, more than double the proper charge of the
Western Union Company ; ; and is so far an extortion or overcharge to
be divided between the companies who are parties to it. |

When the charges imposed for transmission over the wires west of
New York are double the regular tariff prices, the American company
can well afford to allow the cable company one-third of the receipts for
that portion of the service performed by their lines. If the charge were
only double, then the account would stand thus: the Western Union
being credited $2, when the proper amount to be collected for them was
but $1, they would leave 662 cents with the British company and yet
receive $1. 334 for their share, being 334 cents in excess of their regular
anid legitimate charge at home.

But the case is in some particulars much worse than this.

Let me illustrate by supposing a message of one hundred words sent
from London to Washington. Ten of those words may be supposed to
constitute the date, address, and names. The cable company would re-
quire to be paid here for the transmission over the land-lines between
New York and Washington threepence on each of the whole hundred
words. This would amount to £15s., which is equal to $6.96. But the
regular published charge for such a message by the Western Union
would be, for the date, address, and names, 10 words, nothing; for the
first ten words, 40 cents; for the remaining: 80 words, at 3 cents, $2.40;
one hundred words, $2. 80. |

Thus there would be extorted for the § service in the United States an _
overcharge equivalent in currency to $4.16. And the $6.96 being.
divided would give the British company the equivalent of $2.32, and |
leave to the American company for their share $4.64, which is still $1. 84. —
beyond their legitimate charge at home.

In the case of shorter messages, where the address, date, and names
bear a larger proportion to the text, the proportional overcharge would
be greater. For a message, for instance, of twenty words, there would
be collected here, for the line from New York to Washington, five shil-
lings, equal to $1.39 in United States currency, instead of forty cents,
which would be the charge at home. In such a case the Western Union
pocket for their share, for service performed by them, 93 cents, being
much more than twice their whole proper charge. And it must be
remembered that a large proportion of telegrams sent across the ocean
have a text of but ten words or less.

This may seem dealing with an inconsider able matter; but considered
in the aggregate and computing the percentage of unjustifiable charges,

it is no small thing as affecting the cost of sending intelligence between
the two countries. So far as the Government of the United States is
concerned, it must have made a large difference during the past year.

I have no means of knowing whether. messages coming from Wash-
ington, or other points in the United States, to be transmitted by the
cable to England, are subjected to the: same or similar overcharges or
not.

My ealculations are based on $1.09 for exchange and $1.15 for gold,
which has been for some time a fair average.

I submit this exposure to you for such use as you may deem it proper
to make of the information. | :

I have, &c., |
ROB’T C. SCHENCK.