if you give a commission the power they seek they are immediately going to run away with it. I don't look for anything of that sort.

Q. Wholly irrespective of whether the commission will be better than the law, do you think it would be a wise law to authorize the immediate execution of a judgment which can be appealed from?-A. That is another legal question that I am not qualified to deal with.

(Testimony closed.)

SUPPLEMENTARY STATEMENT OF PROF. FRANK PARSONS,

President of the National Public Ownership League.

As the vice-president of the Western Union and the general manager of the New York Telephone Company have referred to parts of my testimony in criticism, questioned my sources of information in relation to two of the facts cited by me, and misunderstood my position in some respects, I trust it may be deemed proper for me to make some explanation and suggestive comment in the interests of thorough understanding.

Remarks were made by the general manager (somewhat modified in his revised testimony) tending to throw discredit on my sources of information in respect to two cases without inquiring what those sources were. In fact, they were of the highest character in both instances. I got the data relating to the Cooperative Telephone Company of Grand Rapids, Wis., from Mr. John A. Gaynor, the first president of the company, a man of excellent repute and thoroughly familiar with the facts. At the time of my testimony I held in my hand a letter from Mr. Gaynor, written a few days before, and from that letter I took the facts about lines, cost of construction and operation, net charges, etc., that I gave the commission. The facts about the Government telephones I obtained directly from the books of the Department by a personal visit to the Patent Office building in 1896. The general manager said he thought it perfectly safe to say that the expenses of a man to attend to the maintenance of the plant were not included in the $10.25 total cost per phone. The fact is, however, that one of the items in the Government account was $300 a year for the services of an expert electrician under contract to attend to the maintenance of the plant, which duty took only a part of his time. The general manager's statement as to the use I made of the Government data is also incorrect, as may be seen by examining my testimony. I used the data to show that the Bell Company was wrong in that case in its refusal to reduce rates, wherefore it may be mistaken in other cases as to the practicability of low rates. At the time of my testimony I did not know that the Department exchange had been given up, but on inquiry I find that it has; that the installation was not satisfactory (a thing that has happened many times in private systems also), that a wider service was needed, and that the Bell folks withdrew their refusal to make reasonable rates to the Department and now supply such wider service, long-distance facilities, and all, at rates that come down close to the cost under the Department system with its comparatively narrow service-all the way down, perhaps, considering the additional facilities now enjoyed.

The statement I made about the wages of telephone girls related to the general situation in this country, and is not met by a comparison of foreign wages with those in New York City, one of the highest wage centers in the United States. I am informed on high authority (that of a leading telephone official) that in the smaller places the companies pay many of their telephone girls only $10 and $12 a month, $16 being considered good pay. Compare what the general manager says about wages of telephone operators in France and Switzerland.

My position on the flat-rate question was misunderstood. I believe in the measured service plan for large places, but think the double flat rate (residence and business) simpler and better for small exchanges. If the message charge is carried too far it limits communication where no end is gained by the limitation, as well as where limitation is useful.

The general manager's data of telephone development are of great interest, but the comparisons made do not have the bearing impliedly given them in reference to the influence of public and private ownership on telephone development, because of the mixture of other causes, and because of the selection of American cities entirely from the list of those most highly developed. That New York City has 26 telephones per 1,000 people while Paris has 13 per 1,000 proves nothing as to public ownership, because there is even a greater difference in favor of New York in respect to transit and other interests which are private in both cities. Moreover, the heart of New York (Manhattan and Bronx) is selected for comparison with Paris instead of taking the whole city, Greater New York. It would be fairer to compare London's 7 telephones per 1,000 people, under private ownership, with the 13 per 1,000 in the public

system of Paris, for general conditions are more similar in London and Paris than in New York and Paris. It should be noted also that the 7 per 1,000 of the private system in London, and the low development in Warsaw and Moscow and other half civilized places are among the principal factors in pulling down the average of the European cities dealt with by Mr. Bethell. Instead of comparing the 26 telephones per 1,000 of population in the heart of New York with the 25 per 1,000 in the whole of Berlin, why not compare Greater New York's 20 per 1,000, or Brooklyn's 11 per 1,000, or Philadelphia's 16 telephones per 1,000, or St. Louis's 17, or Washington's 14 per 1,000 with Berlin's 25 per 1,000? With smaller places, Larchmont's 180 phones per 1,000 people is contrasted with Trondhjem's 38 per 1,000, but it is not explained that Larchmont is a gilt-edged residence town filled with wealthy New Yorkers, while Trondhjem is a city of more than 30,000 with the various classes of people in ordinary proportions. It would be fairer to contrast the 6 telephones per 1,000 in the Bell system in Chester, Pa. (34,000 population), or the 10 per 1,000 in Camden, or the 19 per 1,000 in Trenton, N. J., or the 14 per 1,000 in Wilmington, Del.

If a city of low general condition shows a higher telephone development than another city that is in general more civilized and progressive, then some valid inference may be drawn as to the effect of differences in rates and management. But if the more civilized and progressive city has the higher telephone development, that is what might be expected even in spite of overcharges. The truest comparison is between public and private ownership in the same place, and Mr. Bethell's statements about Stockholm and the movement from private to public telephone systems in Amsterdam, Denmark, Sweden, Austria, Switzerland, France, and England are of the deepest moment.

In view of the importance of the subject of telephone development, and the fact that the true test of it is not the phonage of a few of the most progressive cities but the average development throughout the country, I have drawn up a comparison which includes a number of other places besides those mentioned by Mr. Bethell. It would be desirable if still more numerous comparisons might be made, and the data for 1880 included as well as those for 1900.

*The places marked with a star have public systems, Stockholm having also a private company in competition with the Government exchange.

The data down to and including Larchmont are simply a tabulation of the principal facts given in the general manager's testimony, except the rates in Trondhjem and the population of Berlin, which he did not state, merely saying that it was about the same as New York. The exact figures, however, for 1900, as given in the Statesman's Year Book, show a difference of 166,600. The last 5 ratios of the table are probably too high, since the telephone stations are taken from the June book, 1901, while the population data are from the census a year before. The difference in most cases is only 6 months, as in Mr. Bethell's data.

When the Government entered the field in Stockholm, Mr. Cedergren, manager of the private com. pany, had 5,000 subscribers, and was running along with single overhead wires. The Government started by bringing rates down from $22 and $28 to $16.50 and $22, putting in metallic wires against single wires, unde ground against overhead wherever possible, direct connection with long-distance trunks, and free communication with all places within a radius of 43 miles. The company met the competition nobly, gave free service within 43 miles, put in metallic circuits, so that in 1894 there was not a single wire circuit left in Stockholm; and, with the aid of their big start of 5,000 subscribers, the genius of Mr. Cedergren, one of the leading telephonists of Europe, the wealth of the owner who could get along whether he got any profit or not, and the aid of the municipality, which took sides with the company against the State, the private exchange has been able to keep ahead of the Govern ment exchange in its membership; but it is clear that the impulse for development came from the Gov ernment and not from the company, as Mr. Bethell indicates. (See pp. 335 336, Telephone Systems of the Continent, by A. R. Bennett, a leading English expert and former general manager of the Mutual Telephone Company, of Manchester, England.)

*Means independent company with a Bell Company also in the field. All the telephone stations of both companies are included in estimating the number of telephones per 1,000 of population, but the rates given are those of the independent companies, as the lower rate schedule ought to govern develop. ment where it has once secured a strong exchange.

It is clear, even from this little table, that other causes than the system of ownership are vigorously at work. The variations between 6 telephones per 1,000 of population in Chester and 7 in London to 62 in San Francisco and 180 in Larchmont, all under private ownership, are much greater than the difference between the public group and the private group.

*

On page 801 of his revised testimony Mr. Bethell says: "January 1, 1901, London, with a population of 5,633,000, had 41, 111 telephones; that is, 7 per thousand. Among European cities of its class London's development is exceeded only by that of Berlin." This is clearly incorrect, for, on the general manager's own data, London has less development than Vienna and only about half that of Paris. In fact the private system in London has a lower development than any public system in any city of its class (over 1,000,000) for which Mr. Bethell presents the figures-a lower development than any system, public or private, in any civilized city of 500,000 or more for which I have the data.

I have taken Mr. Bethell's estimate of "54,647 stations" for New York (Manhattan and Bronx), or "26 per thousand;" have used that estimate also in figuring the telephone development of Greater New York, and have shown that Mr. Bethell's case is not good, even on his own data. It must be noted, however, that these figures and Mr. Bethell's estimate of $85 as the average rate are not the fair data for New York in comparing it with European cities, for the reason that these data are based on figures which include the telephones in the private branch exchanges in New York. Most of these private telephones are for communication between different parts of the same establishment, and are used little or none in connection with the city telephone system. These branch phones are very numerous in New York, but are not much in use in European cities. The number of stations in New York exceeds the number of lines connecting such stations by about 42 per cent, while in European cities the number of stations substantially represents the number of lines in connection with the city exchanges. The number of lines in New York January 1, 1901, was about 31,750, or 15 to 16 per thousand of population. President Thomas, of the Independent Telephone Association of the United States, to whom I am indebted for these facts, tells me that 15 telephones per thousand is about the fair figure for New York in comparison with Berlin's 25 per thousand. Some of the branch phones, however, are used in connection with the city exchanges, and New York, moreover, is entitled to some credit even for private phones; wherefore I think the fairest comparison probably lies between Mr. Bethell's figures and those of President Thomas18 or 20 per thousand for New York, perhaps, and 16 for Greater New York. Similar considerations apply to Mr. Bethell's comparisons of European cities with Boston, San Francisco, etc.

The $85 average rate is the average for all the stations, including the private branch phones, for many of which the company receives only $8 and $12 a year, as Mr. Bethell has himself informed us, while the European rates with which it is contrasted are rates for direct-line service. President Thomas says that the average rate in New York, on the basis of direct service, is $183. "From the records of the New York Telephone Company (Mr. Bethell's company), we find that the average number of calls per subscriber's line per day is 10.6. Assuming that the average user has 10 calls for each working day, he will use 3,000 calls per year, the rate for which, according to the schedule of the New Telephone Company, direct-line basis, is $183 per year."

Mr. Clark began with a statement which shows an entire misapprehension of my testimony. He says the evidence given the commission in favor of the public ownership of the telegraph was chiefly based on the conditions of the telegraph in Great Britain, Switzerland, and Belgium, and proceeds to point out the disparity of conditions as to population, wires, wages, distances, etc. In fact, however, the said evidence was chiefly based on the broad principle that the fundamental test of any system is its effect on character, justice, government, civilization-the human effects being far more important than any material considerations—and upon the broad facts: (1) That a normal public plant aims at service and benefit for all, while a private monopoly aims at dividends or profit for a few; (2) that public ownership tends to superior harmony of interest and fuller cooperation, removing the vital antagonism of interest that private monopoly creates between the owners and the public and transferring the interest of wealthy and influential men to the side of good government and honest administration; (3) that private monopoly means congestion of power and benefit, while public ownership favors diffusion of power and wealth and service; (4) that private monopoly means taxation without representation, with power to make and unmake the fortunes of individuals, cities, States, and nations-sovereign power in private hands; (5) that in the same country, and under similar conditions, otherwise than as to ownership, the change from private to public ownership has resulted in superior service, lower rates, better treatment of employees, less corruption of government, improved citizenship, nobler manhood, and higher civilization; (6) that the movement of civilization is toward the public ownership of monopolies, etc., facts entirely independent of the "disparity of conditions" in wages, wires, offices, rates, distances, etc., to which Mr. Clark directs attention. These material elements are of much importance and furnish, I believe, strong evidence for public ownership, but not the chief evidence. The philosophy of public ownership and cooperative industry rests primarily on considerations entirely above the material plane and wholly out of range of these statistics of dollars and wires and offices and telephones-as far out of range as good government, public spirit, partnership, and brotherly love are out of range of the stock exchange. As to the data of miles and wires, etc., 1 mile of wire to 76 people in the United States against 1 mile to 130 people in Great Britain proves nothing except the relative sparsity of population in the United States, even if we take no note of the evidence that the wire mileage tabulated by the Western Union includes all the old rattletrap and worthless lines that were bought up solely to get rid of rival companies and that were built solely to be bought up."

The vice-president's statement relating to offices--76,000 post-offices and 39,000 places reached by the telegraph companies and their telephonic connections in the United States, against 40,000 (estimated) post-offices and 10,816 telegraph offices in Great Britain-shows the telegraph reaching 50 per cent of the post-offices here and 25 per cent in Great Britain, as Mr. Clark says. I suggest, however, that the statement is invalid: (1) Because the witness's own Exhibit B shows that only 29,000 places are reached by telegraph and telephone, 39,000 being there given as the total number of telegraph and telephone distributing offices in the country; (2) because

1 Mr. Clark did not touch these fundamentals except where, in answer to questions after he had finished what he wished to say, he denied that the Western Union's distribution of franks is intended to influence legislators, etc., and where he answered "No" to the question whether or not he approved of the principle (adopted in Europe, Australia, and New Zealand) of administering the telegraph to secure the greatest public service, rather than for profit, expressing personal dissent from a principle, which, if admitted, establishes the case for public ownership and cooperation, since philanthropy is not practicable as a general business foundation, and public ownership or cooperation are the only other things that can make it an aim to forego profit and so extend the service to its widest limits. Private monopoly must say "No to the greatest service principle, for profit is an essential condition of its continued existence, and profit is inconsistent with greatest service, for without the profit rates could be lower and service greater.

2 See Senate Doc. No. 65, Fifty-sixth Congress, first session, p. 30; Blair (Senate Committee on Education and Labor) Report on Labor and Capital, 1883, Vol. II, p. 1277; Bingham Hearings on Wanamaker Bill of 1890 (House Committee on the Post-Office), p. 76, and House Report 114, Forty-first Congress, second session, p. 85, giving the statement of G. S. Thompson, a prominent telegraph builder of New York, in which he says, "It must be remembered that the estimate (in its report) of the quantity of lines owned by the Western Union has been predicated upon a computation made by simply adding together all lines that have come into its possession. Many of these wires have now ceased to exist, and others that are still standing are not in operation."

the number given for the British telegraph offices is the figure for more than 2 years ago, while the other factors in the comparison are brought down to date; (3) because the British post-offices are overestimated. The 1898 report gives the number of post-offices as 21,197 and the telegraph offices 10,483; (4) because telephone connections are included in the American figures and not in the English; (5) because about three-fourths of the Western Union offices are railway offices if the same ratio holds as a few years ago, while less than one-fourth of the British offices are railway offices; (6) because there is no mention of the fact that in Great Britain every post-office and every post-box is a place of deposit for telegrams. Lastly, the figures, even if correct, would only show that Great Britain had a much greater relative development of post-offices than we have. The implication that the telegraph development in Great Britain is relatively less than in this country is wholly unwarranted, even on the figures as they stand, since 10,816 offices is a more extensive service for the United Kingdom, with 120,973 square miles, than 39,000 for the United States, with thirty times the area.

*

Later in his testimony, the vice-president says: "If you are going to extend the telegraph as was done in Great Britain, to carry it to every hamlet;" thus admitting that the development of the telegraph in Great Britain is greater than it was in England under private ownership. Afterwards he says he thinks "it was the policy of extending the telegraph to unprofitable places that caused the deficiency." I suggest that the vice-president's comparisons of American rates from New York with European rates from London are invalid. (1) Because the American rates are internal, while the European are international, the messages passing through 2, 3, and 4 countries, each of which adds its tariff; (2) because the American rates are land rates, while each of the European routes includes the cable from England to the Continent, and, as Mr. Clark admits, in answer to a question later in his testimony, the cable service is "infinitely" more costly than the land service.

I suggest further that all his rate comparisons are vitiated by his assumption of 11 words as the average of address and signature, making 21 words to the ordinary message as a basis of comparison. In the first place, the addition of 11 words as the average for address and signature is not justified by experience, or by Western Union testimony in the past. President Green, of the Western Union, some years ago placed the average number of words in address and signature at 7 per message.2 In the second place, even if the average ordinary message here were 21 words, the comparison would not fairly present the situation, for, whatever may be the case here, it is perfectly certain that the average message in England is not 21 words, but about 15 words.

The vital matters are the minimum rates at which messages can be sent, and the actual average charge, for these are the things that in connection with the extension of facilities really govern the use of the telegraph, and give the English people about double the per capita use of the wires that we attain. A few words more or less to the message is of comparatively little consequence, but the ordinary minimum rate at which any message may be sent determines the strata of the population that can afford to use the telegraph and the frequency of its use by the whole middle class. The internal rate in Great Britain is 12 cents; that is, a message from any point in Great Britain to any other point in Great Britain may be sent for 12 cents. From a point in Massachusetts to another point in Massachusetts the ordinary rate is 25 cents. In New York State the internal rate is 25 cents; in Connecticut, 25 cents; in New Jersey, 25 cents, etc. The average charge for all messages in Great Britain is about 15 cents, against 31 cents in the United States. By Mr. Clark's admission 3 cents a message added in Great Britain would pay for all extensions and cover the interest charges on a debt overloaded by the purchase of the lines at about 4 times their value. By Western Union data less than 3 cents of the 21 is due to distance, and the evidence does not favor the idea that our telegraph runs up its expenses by paying high wages. If, then, the 31-cent charge is not due to

1

1 Bingham committee, hearing of Mr. Thurber, testimony of Mr. Wiman, a director of the Western Union, p. 22. (See, to same effect, testimony of President Green, Blair committee, Vol. I, p. 881.) 2 See Senate Doc. 65, Fifty-sixth Congress, first session, p. 14.

3The Telegraph Monopoly (Equity Series, 1520 Chestnut street, Philadelphia), p. 145.

4 Senate Doc. 35, Fifty-sixth Congress, first session, p. 16, n. 1, and p. 83, n. 3.

5 According to the Tenth Census, volume 4, the average telegraph salary in the United States for 1872 was $360, against $288 in Europe, and in 1880 the average telegraph salary was $327 in the United States and $320 in Europe, showing a large increase in Europe and a fall in the United States. In view of the facts that further reductions were made in the United States, causing the great telegraph strike of 1883, that the company won the strike and have continued their policy of wage reduction (Senate Doc. 65, Fifty-sixth Congress, first session, pp. 38, 39, and authorities there cited), that English wages are above the general European level, and that the British reports show a rise of telegraph wages from 55 per cent of the total expenditures in 1881 to 65 per cent in 1895 (the last report I have in which I find this item dealt with), and from 44 per cent of telegraph receipts in 1880 to 67 per cent in 1899, while since 1881 the hours have been reduced in England from 56 per week to 48 day and 42 night. In view of all these facts it seems clear that the average telegraph wage is higher now in Great Britain than in the United States, this roundabout method being the only one available since the average telegraph wage in this country is not attainable.