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 ti3:e] xjnsrionsr oi^ 
 
 Telegraph Interests in Canada. 
 
 A Letter to the Shareholders of the Montreal Telegraph Company 
 
 BY 
 
 ERASTUS WIMAN. 
 
 : 
 
 / '6 ?/ ^^ 
 
 '^.,. 
 
 I VLIRRAIIJK8,'<'J 
 »5\ 27 Rue Buade, 
 
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TO THE SHAREHOLDERS 
 
 OK THK 
 
 MOITREAL TELEGRAPH COMPANY. 
 
 >♦< 
 
 I 
 
 GENTLEMEN : 
 
 I venture to address you iu relation to the proposition which is to 
 be Bubrnittcd to your decision at the Special General Meeting called for the 
 IGth of July next, on which occasion you will be asked whcither you will 
 consent to a contract for the working of your lines by another telegraph 
 company, under a guarantee to you of Eight per cent, per annum on the capi- 
 tal of your conipanj\ I take this liberty btf-ause I have been more or less 
 concerned in the negotiations which have resulted in this proposition, and 
 because there seems to exist a misunderstanding and a i)rejudice, which is 
 most unjust to the measure now before you, and which, unless removed, may 
 Boiioiisly interfere with the wisdom of the judgment at which you may 
 
 arrive. 
 
 THE PLAN PROPOSED. 
 
 In order that you may clearly apprehend the plan proposed for the 
 fusion of telegraph interests iu Canada, an estracc is herewith submitted, 
 which, in a measure, explains the same. This memorandum puts into 
 shape and form the result of negotiations extending over several weeks, in 
 which serious legal difflculties were encountered, but surmounted by the 
 pl?.n now T)roposed. 
 
 The Great North Western Telegraph Company of Canada desire to place 
 themselves in the position of contractors, to undertake tae working of the 
 lines of the Montreal Telegraph Company, at a fixed rate of remuneration, 
 uj)on the terms and conditions of an agreement, to bo hereafter drawn up. 
 The contractors are to undertake, for a period of 91) years, to work, manage, 
 and operate the lines of the Montreal Company, by means of its own em- 
 ployes and operators, and to conduct the business in the same manner, and 
 to the same extent, that the Montreal Company has heretofore conducted 
 it, performing, to the fullest extent, all tlie obligations of the company to- 
 wards the public. And the contractors bind and pledge themselves to pay 
 to the Montreal Company, quarterly, during the continuance of this agree- 
 ment, the sum of forty-one thousand dollars, on the iirst days of January, 
 April, July, and October, of each year, or at the rate of eight per cent, per 
 annum, on the capital stock of the Montreal Company, and four thousand 
 dollars for the maintenance of the organization of the same. The Western 
 Union Telegraph Company to be parties to this agreement, in consideration 
 of certain arrangements with them, they binding and pledging themselves 
 as sureties of the said contractors for the payment of ail sums ci" money and 
 for the performance of all the obligations and duties wliich these contractors 
 undertake. And it is agreed by the contractors that no charge greater 
 than t-,Tenty-five cents shall be made for the transmission of a message of 
 ten words over the present extent of the lines of the company. 
 
wrnni 
 
 THE PLAX rnOVOSED. 
 
 After (hio considoration the Board, through itH a<;tiiig Secretary, 
 notilied me of their approval of this seheiue, and caUed i he meeting of 
 stockhohh'rs by the advertisement with wliich you aro familiar. 
 
 There are, of course, other conditions of the pioposed af^reement than 
 aro contained in the forej;oin<j; hut the {general bases of the jtropositions 
 submitted are more clearly set forth in this commnnication than can be 
 shortly gleaned from any other source. An agreennmt completely protecting 
 your interests, and covering all the points essential to legality and safety, 
 has lieen drawn up by your own counsel, Hon. J. J. C'. Ahhott, and is to be 
 submitted for consideration. 
 
 It will be noticed that the Montreal Telegrajdi is in the position of em- 
 ployer, that its organization, powers, and dignity are undisturbed. The Great 
 Nortn Western Telegraph Company s(!cks, on the other hanu, to occupy 
 8im])ly the position of a ccmtractor to your corporation, whose remuneration 
 is dependent upon good managenumt and success of the administration of 
 affairs, but against the consequences of whose failure you have a safe and 
 ample guarantee. 
 
 CONDEMNED UNHEARD. 
 
 It would ill become me to question die sincerity of parties who condemn 
 the scheme as proposed; but it is submitted that this condenuiation has 
 been most unjust, because no attempt has been made to get at the facts of 
 the case, and no explanations Avero sought before judgment was attempted 
 to be entered up in the public mind against the project. The chief ground 
 of complaint has been, that the telegraph companies were about to pass 
 under the control of Americans, that the telegraph system of Canada would 
 become denationalized, and tliat there was no assurance that the most 
 exorbitant rates might not be charged for messages. The <')iange8 have 
 been rung from one end of the Dominion to the other, with variations of 
 these charges, and a prejudice adverse to the proposed amalgar.mtion has 
 been created, which has no foundation, and is simply the result of ignorance 
 or design. The truth is, that, the whole scheme, as now before you, has 
 been proposed and promoted for the very purpose of obviating the possi- 
 bility of results such as are charged against it. Thus, instead of an Ameii- 
 can company obtaining possession of the Canadian telegrai)h lines, it is 
 proposed that a purely Canadian company shall be the instrument used for 
 combining what might easily become very conHicting interests, and with 
 disastrous results. This company, known as 'I he Great North Western Tele- 
 graph Company of Canada, was created under a Canadian charter, is com- 
 posed almost entirely of Canadian stockholders, with a board of Canadian 
 directors, and offlcered solely by Canadians, employing a Canadian staff only. 
 What element of adverse Americanism is herein contained, it is difficult to 
 discover. It is true that the Western Uaioa Company undertake for the 
 Great North Western Company, a guarantee of an ei^^li per cent, dividend 
 on the capital of the Montreal Telegraph Company, and pay a six per cent, 
 dividend to the Dominion Company, and in consideration of this very great 
 liberality, they are to receive one-half of the profits of The Great North West- 
 ern Company. Is there anything very heinous or very startling in this 
 
 I 
 
 I 
 
CONDEMNED UNHEARD. 
 
 jccretary, 
 leetiiig of 
 
 lent than 
 Dpositions 
 iin can bo 
 [trotecting 
 11(1 Hafety, 
 h1 is to 1)« 
 
 ion of eni- 
 Tlio Great 
 to oc(;ni»y 
 iinneratio)! 
 stratloii of 
 a safe an«l 
 
 lo condemn 
 nation has 
 the facts of 
 4 atteinjited 
 lief ground 
 )at to pass 
 nada wouhl 
 ,t the most 
 anges have 
 ariations of 
 ii.iation has 
 )f ignorance 
 >ro you, has 
 g the possi- 
 if an Ameii- 
 1 lines, it is 
 lent used for 
 ts, and Avith 
 estern Tele- 
 'ter, is com- 
 of Canadian 
 vn staff only. 
 8 difficult to 
 ;ako for the 
 nt. dividend 
 six per cent. 
 is very great 
 North West- 
 bling in this 
 
 proposition? Docs it imply destruction of a national element in the Cana- 
 dian telegraph system, or is it subversive of any sentiment of loyalty or 
 patriotism to the Dominion, that a foreign corporation, with 80 millions of 
 capital, for the sake of peace and harmony, and a profitable connection, 
 should undertake to guarantee the payirent of nearly a quarter of a million 
 of dollars to Canadian stockholders, and ])articipate in the mutual advan- 
 tages of this friendly arrangement ? I'arties who indulge in this kind of 
 criticism forget, or ignore, the fact that the lines of the Montreal Telegraph 
 Company extend into several of the adjoining States; that tlie company 
 occupy a largo portion of the State of New York, and have also offices iu 
 New Hampshire, Maine, Vermont, and Michigan. Fortunately for the 
 business interests and intercourse between ourselves and our neighbours 
 across the line, there is no arbitrary national boundary or dividing line 
 between the telegraph arrangements connecting the two countries. 
 
 UNFOUNDED FEARS. 
 
 The terrors which have hp.ow evoked of American domination in the 
 Telegraph system, when closoTy si-rutinized, are found to bo wholly imagin- 
 ary, and they would be amusing if they were not pitiable. One would 
 think that there was some poison or contamination in the great nation on 
 your borders ; that the tratflc Avhich crowds your railroads, the travel which 
 fills your hotels, should be avoided and spurned. One would think that the 
 great system of telegraphy, the invention of an American, and which the 
 enterprise and capital of the people of the United States has made second 
 only in universality and utility to the post office, was to be ignored by the 
 stockholders of the Montreal Telegraph Company, because it suits the pur- 
 pose of a few interested parties to work up, for their own purposes, a senti- 
 ment which is narrow, false, and unjust. Of all people in the world the 
 stockholders of the Montreal Telegraph Company can least atford to indulge 
 in this kind of sentiment, Avhen the sole chance of profit depends upon a 
 connection with the country so maligned. 
 
 THE RESULT OF DEFEAT. 
 
 The very thing which these parties make such an outcry against is 
 much more likely to happen if the project now before you is not favorably 
 considered, viz: control by Americans of the Telegraph system of Canada 
 It is, of course, known to you that the Western Union Company are now 
 virtually proprietors of the Dominion Company under their lease for 99 
 years at 5 per cent., in addition to which Mr. Gould holds nearly a quarter 
 of a million of the stock of the Company. If the Montreal Company are 
 not inclined to accept the liberal terms that are proposed to them under the 
 new contract offered, it is incredible to snppose that the Western Union 
 people will continue to divide their busiuess between the two Canadian 
 Companies. If the offer now before the Mootreal stockholders be rejected, 
 it will follow, of course, that they must lose the entire American business, 
 and th?.^ the cable business will also be concentrated in the Dominion 
 Company. The consequence would, of course, be that the Montreal Com- 
 
6 
 
 THE RICSULT OF DEFEAT. 
 
 ,1 ■ 
 
 ;1 i 
 
 
 ,,. f 
 
 " t 
 
 pauy, deprived of i>robiibly |iiiOG,00() a year, could not pay dividomlH ; and 
 its 8tocl< would certainly fall in value to a point lower tliau it has ever 
 <lone before. What the final result might be, it is hardly necessary to 
 indicate. 
 
 THE CONSEQUENCES OF ACCEPTANCE. 
 
 In opposition to the possibilities, not to say the probabilities, thus indi- 
 cated, how much more attractive is the offer now before you ? A certain 
 and fixed value to the stock, at a figure fully up to its intrinsic worth, is 
 secured by a regular and certain (luarterly payment of a dividend of Eight 
 l)er cent., a rate which creates surprise among those familiar with the perils 
 to which the property is exposed, and the dead certainty of the extinction 
 of dividends should the offer be refused. But beyond all this, is the condition 
 which has laid at the bottom of the whole negotiation ever since its coui- 
 mencenient, viz: that the maximum rate for ten-word messages should not 
 exceed, within the provinces of Ontario and Quebec, 2r> cents, and should any 
 attempt be made to exceed this charge the whole agreement should bo null 
 and void. Thus the parties in opposition, in endeavoring to defeat the 
 proposition now before you, are contributing to the destruction of a plan to 
 accomplish the two great purposes which they all i)rofe8sedly desire to 
 SCO a(;complished. These two ends are : 1st, a permanent and certain profit 
 to the stockholders ; yd, a rate as low as prevails under the jiostal system 
 of Great Britain, with far greater facilities in proportion to population, 
 distance and use. If any other plan can accomplish these objects more 
 desirably or more effectually, and which cau be made practicable and 
 acceptable to the jiarti-^s interested, both in the United States and Canada, 
 it has failed yet to devek n itself. 
 
 THE OPPOSITION OF THE PRESS. 
 
 While a portion of the j)res8 have taken a fair and impartial vi nv of the 
 proposed arrangement, and have fairly recognized and considered the in- 
 terests of all concerned, others have dealt with the question in such a 
 manner as would seem to indicate that shareholders who invest their money 
 in telegrai)h8 have no interests or rights which are entitled to the slightest 
 consideration. The regular rates charged the press in Canada for news re- 
 ports ar(5 probably the lowest in the world; and even these rates have been, 
 in some cases, demoralized by 'ohe ruinous competition of the companies. 
 It is "'>t the intention to increase these rates beyond a point Avhich shall bo 
 the lowest reasonable compensation for the service. It Avill be the inten- 
 tion to make these rates uniform to all; and, if for special reiiorts to any 
 newspajier the maxiumm rate is named at twenty-five cents per hundred 
 words, no reasonable fault can ]»p 'bund. It is well known that telegraph 
 lines could not be built or operated to do business at any such rates except 
 at a heavy loss, were it not in connection "with the commercial business of 
 the country. Special etfbrts will bo made to serve the press, and these ef- 
 forts will be largely aided by the friendly business relations which it is pro- 
 posed to establish with the Western Union Company, by means of which 
 their co-operation over their vast area of territory and extensive cable con- 
 
 t 
 
TttK OPPOSITION OF THE J'RESS. 
 
 Ills; ami 
 
 lia» ever 
 
 CHHary to 
 
 thus iudi- 
 A certain 
 a worth, is 
 il of I'^iglit 
 L the perils 
 
 oxtiuctioii 
 D coiuUtion 
 loe itH i'oiu- 
 shouUl not 
 
 should any 
 (Ulfl ho uiill 
 
 defeat the 
 jf a idau to 
 ly desire to 
 ertaiu proiit 
 ostal system 
 
 population, 
 )bjec'ts more 
 ;ticahlo and 
 and Canada, 
 
 a vi 'W of the 
 iliicd the iu- 
 )u iu such a 
 t their money 
 
 the slightest 
 i for news re- 
 teshave heen, 
 ho companies, 
 vhich shall he 
 
 be the inten- 
 eports to any 
 s per hundred 
 Dhat telegraph 
 h rates except 
 ial business of 
 
 I, and these ef- 
 .vhich it is pro- 
 aeans of which 
 sive cahle con- 
 
 I 
 
 ncctions will bo fully assured, in addition to the low rate of trauHnusslon 
 for local nowH. 
 
 But, in addition to the low rate of transmission, the C.iuiuliau press 
 enjoy advantages from the Telegraph Companies of a very pi . iiliar charac- 
 ter, and that is the amount of news tliey daily get, liio gleaning and pre- 
 paration of which costs them literally nothing. Without charge to them, 
 the whole of one side of each daily paper is lilled with tele<:;raphic advices 
 of events transpiring in all jjarts of the world, from tlio most stupendous 
 occurrence in the most distant and important quarter, down to the most 
 insigniticant and trivial event that hai>pens in tlie remotest part of the 
 Dominion. Thus, in one day, there are two columns recounting the assas- 
 sination of the Emperor of Russia, a few hours before, in St. Tetersburg, 
 side by side with the account of a broken leg of some poor lumbernum in 
 Bobcaygeon, all of which in fjot irilhont auij effort at all on hchalf of the editors 
 anil proprietors of the ncwnpapera, and in furnished to them at rates so loto as 
 ahsolntehj not to pay the cost of transmisaiou. Thus, for $25 or fliO a week, 
 whole columns of news are gleaned iVom all parts of the -A^orlil. It is pos- 
 sihlo, that under sonui other arrangement, wherein a fair profit Avill bo 
 sought, newspapers may have to jiay a little more than they have been 
 paying for transmitting their columns of matter daily, and it is natural that 
 they should discover, in any i)lan looking towards liarmony of telegraph 
 iutrests, objections and disadvantages which they will not bo slow to dis- 
 cuss. But with rates fixed at the figure above (piotcd, there certainly 
 ought not to be any such objection urged on the score of disadvantage to 
 the press. The fact is, tlie advantages are all on their side, and none what- 
 ever on the side of others. 
 
 OITOSITION OF THE BKOKEKS. 
 
 With regard to the brokers, the ground of their opposition is of course 
 palpable. No stock in the entire list has yielded such a good return in com- 
 missions to these gentlemen as the Montreal Telegraph Company. Not only 
 has it fluctuated much and rapidly (the rang<i in the last two years being 
 from 50 to 60 per cent. ), but the transactions have been numerous and large. 
 That these fluctuations will continne to an even greater extent than before, 
 should the terms of amalgamation be rejected, is as certain as that the sun 
 shines. To expect, therefore, anything but hostility from gentlemen whose 
 income depends on these fluctuations, is to expect human nature to change. 
 If the stock should decline, as it most assuredly would upon the rejection 
 of the terms now before you, the brokers would reap a rich harvest. Any 
 attempt made to get control of the stock by i^arties outside, or any move- 
 ment wiiatever either up or down, would make it e(pially profitable. The 
 stock of the Montreal Telegraph Company has been the football of the 
 market, kicked hither and thither by every idle rumor, and subject to every 
 influence, favorable or unfavorable. The extreme x'cril to which the pro- 
 perty is exposed from competition, and the extraordinary class of circum- 
 stances which surround it, both from its United Stat'^s and cable con- 
 nections, will always make the stock one of fluctuating value, unless some 
 
I 
 
 8 OPPOSITION OP THE lUtOKI'lIiS. 
 
 Hich plun UH Ih now propoHOil Ih iitlopttMl, to {iiimlgiiiniitu uiul coiiHoliilato tlio 
 variouM coiiflicUng iiitnrt'stH. Under rtucli circuuiHtunceH tlio brokers will 
 most iiuturally bo opposed to tlio rcmoviil of the wtock from tlio niarkot, 
 and placing it uninnj; tlio nIcxiUh which will bo Honghfc for investniont pnr- 
 poscH, f;iving it ii Htablo and hij;h \ alnc. How far tho Htockhohhirs who own 
 tho property, and who wonld like to got a rovcnuo from it, and see its valne 
 certain and permanent, flhare in tho brokers' view of tho case, they ninst for 
 tbeniHelves dotermine. 
 
 i 
 
 l! 
 
 if' 
 
 THK OPPOSITION OF THE ITBLK!. 
 
 Tho i)nblic, too, aro iw «loiibt averse to any scliemo of auialgamation 
 that will necessitato a sominvhat advanced rato for telegraphic nie.ssages. 
 For the last two year.s th(5 pnl)lic have had things pretty much their own 
 way, 80 far as telegraphic business is concerned, not only as to tho rates, 
 but in tho fact thah nowhere else in tho world have so many privileges and 
 faciliticH beciu furnished, owing to tho excessive coinpcititiou that has pro- 
 vailed, resulting in bids for i)nsine8S which have been disastrous to profit. 
 It is, therefore, not surprising that tho adverse criticisms have fonnu ready 
 acquiescence in tho public mind, because it is anticipated that tho amalga- 
 mation of telegraph interests will result in tho demand for better ron^uner- 
 ation for services performed. Tliat this remuneration has been too low 
 every person j'amiliar with t( h-graph matters fully understands. In view 
 of the distances, the facilities and the extent of tho business, twenty cents 
 for ten words, within anj' portion of tho Provinces of Quebec and Ontario, 
 is a rate twenty per cent, lower, in proportion, than that which tho British 
 Government, in its perfect postal telegraph system, requires. It is certain- 
 ly totally inadequate, as is shown by experience, to keep tho property in 
 repair and to make a reiisonablo compensation for the cai)ital employed. It is 
 true that tho stockholders of the Montreal Company have been getting 
 dividends at tho rate of seven or eight per cent., but it is notorious that 
 it has been paid to them with tho greatest difficulty, anu at an expense 
 which, in a very little while, will be a most serious consideration for them in 
 tho condition in which their property is now found. The amount expended 
 for renewals and extensions, the last two years, has been totally inadequate 
 for the purpose, and the expenditures, which must, of necessity, be made 
 very shortly, will be very large in repairing and rebuilding lines. It will 
 ho remembered that the company was able to pay eight per cent., by the 
 sale of the telephone, which this year will not bo available. 
 
 It is true that the present receipts of the Montreal Company are claimed 
 to be largely in excess of last year, and that a dividend is now being earned 
 equivalent to the amount guaranteed under the now arrangement ; but it 
 should be borne in mind that these large receipts are largely the result of 
 tho amalgamation in the United States, and that the Montreal Company, 
 through the forbearance of the Western Union Company, is in receipt of 
 an enhanced amount of business which at any moment could be diverted 
 to the Dominion Line, should the arrangement now proposed not be carried 
 out. A dividend at all, or certainly anything approaching eight per cent. 
 
THE Ol'l'OSlTWS OF TJIK PUBLIC. 
 
 liiliito the 
 )kcrH will 
 ) nmrkot, 
 inotit pur- 
 \ who own 
 1 itH value 
 y imiat for 
 
 ilj^anmtion 
 messages, 
 their own 
 ) the rates, 
 viloj^es and 
 at has pro- 
 is to profit, 
 •ounu ready 
 the amalga- 
 cr reiuuner- 
 •en too h)W 
 la. In view 
 wenty cents 
 „d Ontario, 
 the British 
 t is certain- 
 property in 
 ployed. It is 
 )een getting 
 itorioua that 
 an expense 
 II for them in 
 mt expended 
 y inadequate 
 jity, ho made 
 lies. It will 
 cent., hy tlie 
 
 jy are claimed 
 being earned 
 jment; but it 
 V the result of 
 •oal Company, 
 ill receipt of 
 A be diverted 
 not be carried 
 sight por cent. 
 
 I 
 
 I 
 
 is iwt for an instant to ho thniglit of in the face of a twenty rent rate for 
 inosxagos, couipotition for hitsincHH, and the loss of all principal connctiunM. 
 
 WHO AKE NOT OPPOSHD. 
 
 ll.iving thus nd'erri'd to the three oloinentH fro.u which opposition to the 
 proposed aiicilgainatioti seemed to proceoil, it is in onler now to allude to 
 those in favor of it. Those who favor it are to be found among tho large 
 Mtockholders whoso indiviilual Interests are most seriously threatened by u 
 refusal of the project, or benelitcd by its acceptance, yomo are doubtless ilis- 
 a))pointed, however, that a higher dividend is not sectircd, and somo aro 
 dis])osed to dispute the right of a third company to intervene and (hsprivo 
 tho Montreal company of its iudepcndtMice, and iill chances of i)rotit beyond 
 tho fixed sum of eight percent. Bnt it must be l)orne in mind that somo 
 such arrangeinent is essential t<» a consdidation in which all interests aro 
 to be consulted. The negotiations in relation to this matter have extended 
 over several months, during which four forms of settlement were developed, 
 including pooling, leasing, stock consolidation, and tinally, tho plan now 
 before you. There wcro dithculties and disadvantages in all, and none 
 seemed to bo so simple, so effective, and lik«dy tobeso ac(;eptablo to allof the 
 parties most, interested, as tho i»lan now before you. Whatever may bo its 
 defects, it is now the only one that will l)'> agreed to, at least by one of the 
 parties to the negotiations. A delegation from your board of directors 
 went to Now York to meet the Western Union authorities, and while 
 there all those plans were discussed. In view of the (londderations urged, 
 and tho objections that were n\ade, and, especially, the attitude assumed by 
 parties in intercsi/, I think tho delegation will confirm the statement that 
 this is tho only plan that is at once feasible and acceptable. By it a liberal 
 rate of dividend is assured lieyond i)eradventuro, and its payment, every 
 quarter, will not bcdependsnt upon tho contingencies of business, tho uncer- 
 tainties of profit, or tho certainties of competition, llenco, to tlio.^ vho aro 
 the largest owners of stock tho proposed plan seems tho most accepi le. 
 
 There is another class, however, whoso interests it is most impo, ant 
 to bear in mind — that is, the largo number of holders of tho stock, more or 
 loss dependent upon dividends from this source for .in income. The list of 
 shareholders comprises nearly 400 names, and there is no stock list having 
 shareholdors more Avichdy scattered, and in sums more various, anrl in which 
 tho average holding indicates a greater number of estates, families, trusts, 
 females, and others, to whom a regular dividend is of vital importance. It 
 is hardly to be supposed that more than one-tliird of this large number of 
 I)crsons quite apprehend all the circumstances of the case, and the peril to 
 which their income from this source is exposed. Hence, there is all the 
 more necessity for accepting the sottloment which will make certain for 
 tho future a rate of interest which, in these times, it is next to impossible 
 to secure. To refuse tho otFor made would have a most disastrous effect 
 in tho probable cessation of all income from this source for at least somo 
 years to come. 
 
10 
 
 CA2i JiETTEB TERMS BE HADt 
 
 \i\ 
 
 'l! 
 
 ii 
 
 hi 
 
 i 
 
 W 
 
 i jJ 
 
 It has been MUggesteJ that perhaps some bettor terms could be got than 
 those now proposed, should the present offers be rejected. The parties who 
 think this know very little of tlio diflficulties encountered in giving shape 
 to the plan now before them, and the favorable terras which .are oft'ered. 
 The rate guaranteed is higher than that originally conceded, though it is 
 Jowor than the ofiicers of the Montreal Company demanded at first. But 
 it is not possible that any more favorable figures can be secured, and the 
 conviction of those familiar with the whole subject is, that if the terms are 
 not promptly acceded to, the whole negotiation will drop, and that no temis 
 whatever Avill be oft'ered. The proposal is looked upon by disinterested 
 parties as an exceedingly liberal one, the plans proposed comprehensive 
 and uaobjectionable ; and the reetilts can nardly fail to be advantageous, not 
 only to the shareholders of the Montreal and Dominion Companies, but to 
 the public generally, who will seo in the conditions imposed, the prospect 
 of a continuance of reasonable rates, the restoration of telegraphic prop- 
 erty, and increased etliciency in telegraphic service, from the improved 
 manageiiient which will follow the acceptance of the terms proposed. 
 
 THE DIFFERENCE IN GUARANTEES. 
 
 In some quarters it is urged that the rate of interest to the Dominion 
 Company of six per cent, per annum, is relatively more favorable than that 
 of eight per cent, to the Montreal Company, and it is maintained that the 
 latter should be increased in consequence. In reply to this statement, it is 
 sufficient to say that the rate to the Dominion Company was fixed years 
 ago by the terms of its lease, that on its assignment to o Canadian company 
 it should carry an increase rental of one per cent., the rate hitherto being 
 being five i)er cent. The fact that i\\vi extra charge has to be i)aid, indicates 
 that instead of being what it has hitherto been, practically an American 
 company, it will now, under the new arrangement, pass into the control of 
 a Canadian company, so that the effect of the new arrangement will be to 
 nationalize what has hitherto been dc-nationalized. Under cuch circum- 
 stances it will be seen how insincere and unfounded is the shrill cry of 
 patriotic affright which has been raised for selfish purposes, in relation to 
 this matter. 
 
 THE I'OSITION OF YOUR DIRECTORS. 
 
 The decision oi' a number of the shareholders, it is alleged, will be in- 
 fluenced, very much by the position Avhich the directors of the Montreal Tele- 
 graph Compauy assume on this question. It is to be said on behalf of these 
 gentlemen, that the negotiations, extending over some months, indicate on 
 their part a very grea^ anxiety to get the best possible terms for their con- 
 stituents. At the same time, it is apparent they have not felt that they 
 should assume the responsibility of deciding whether acceptance or re- 
 jection of these proposals is the best for all interests. The fact that they 
 have agreed to call you together to pass upon it, is presumed to be a virtnal 
 acceptance, so far as they are concerned, of the i^roposal before you ; bun in 
 order to relieve them from any such resiionsibility, it is juggested that par- 
 ties who desire to express their opinion, either favorable or adverse to the 
 
THE POSITION OF YOVK DIRECTORS. 
 
 11 
 
 got than 
 rtiea who 
 ng shape 
 o offered, 
 ough it is 
 irst. But 
 I, aud the 
 
 toriDS are 
 t no temis 
 iintorested 
 irehcnsivo 
 geous, not 
 lies, but to 
 
 prospect 
 phic prop- 
 
 1 improved 
 osed. 
 
 ! Dominion 
 e than that 
 3d that the 
 ,ement, it is 
 fixed years 
 an oompany 
 hcrto being 
 id, indicates 
 II American 
 le control of 
 it will be to 
 icli circum- 
 shrill cry of 
 relation to 
 
 will be in- 
 )ntreal Tele- 
 lalf of these 
 indicate on 
 be their con- 
 It that they 
 fcance or re- 
 let that they 
 be a virtual 
 you ; bur. in 
 ted that par- 
 iverso to the 
 
 I 
 
 plan, should definitely instruct either directors, or some other reprosentative, 
 to give expression to their views. In order to relievo directors from any 
 responsibility, three stockholders, one representing Quebec, and two others 
 Montreal, have kindly consented to accept proxies of the shareholders who 
 are favorable to this plan. The shareholders representing Montreal are Mr. 
 John Crawford, President of the City Passenger Railway, the largest indi- 
 vidual holder of the stock, and Mr. James Fewer CIcghom, of the well- 
 known firm of Messrs. J. G. McKenzio & Co. The other name is that of 
 Mr. George LMchard Renfrew, a well known resident of Quebec, who 
 will accept a similar trust. A power of attorney will be found accom- 
 panying this pamphlet (see last page) in favor of these gentlemen, which 
 can be transmitted to them by stich stockholders as are favorable to the 
 project. The question now presented to the shareholders is of such vital 
 importance to them, that the specific instructions contained in the power of 
 attorney should be afforded. Hence new proxies should bo substituted in 
 the place of those hitherto held. 
 
 The impression is a most unjust one, which has in some quarters been 
 conveyed, that certain of the directors were opposed to the i>roject because 
 a change in the administration might interfere with such privileges and 
 advantages as they had hitherto enjoyed. The injustice of this implication 
 is found in the fact that the autonomy of the Montreal Company is to bo so 
 completely preserved that, even if this were an actuating motive, it would 
 have no occasion to exist. To relieve the directors from a position in which 
 any such consideration might be said to influence them, eitherfor or against 
 the proposition now before you, the suggestion is made that proxies should 
 be in the hands of shareholders separate from the management. 
 
 Not a few shareholders indicate a natural reluctance to contribute to 
 the withdrawal from active operation of a com]»any Avhich has been so long 
 and honorably identified with the business interests of the country. But 
 no apprehension of the kind need exist ; for both with regard to legal and 
 business considerations, it would bo the best policy to iireserve, to as great an 
 extent as possible, all the advantages arising from the organization, powers, 
 inttaences, aud surroundings of the two companies which have so woven 
 themselves into the warp and woof of Canadian business interests since their 
 organization. So far as the public, and so far as the telegraph companies 
 themselves and their employees are concerned, as little change as possible 
 is contemplated, except that the business of telegraphy will, where, it is 
 possible, be a groat deal bettor done, and the condition of telegr;. i»h iiroperty 
 made more stable and permanently profitable. 
 
 THE POSITION OF THE WESTERN UNION COMPANY. 
 
 Some feeling appears to be entertained by the stockholders that the 
 authorit.es of the Western Union Company are using undue pressure to 
 accomplish their own purposes in Canad?^.. This view of the matter is 
 clearly unjust. It should be borne in mind that the Western Union Company 
 now own a line of their own, extending the whole length of the Dominion. 
 

 'j 
 
 
 1 ' 
 
 f 5 
 
 { ...i!) 
 
 IS 
 
 T£r^ POSITION OF THE WESTERN UNION COMPANY. 
 
 It should also bo borne in mind that they have a large and valaablo buHi- 
 ness, which it is the most natural thing in the world they should divert in 
 the direction of their own lines. This business includes all that is trans- 
 mitted from the United States and all that reaches them by cable. If the 
 Montreal Company had parallel lines rimning to New York and Chicago, 
 they could not be blamed if they gave their business to their own company, 
 any more than the Western Union can bo for confining their messages to 
 their own leased lino in Canada. If, however, this company is willing to 
 make such traffic arrangements as will beget to the Montreal Company a 
 reasonable return upon their cajiital, and thus harmonize conilictiug inter- 
 ests, surely the proposition ought to be promjitly accepted, and, instead of 
 being harshly criticised, the Western Union Company ought to bo com- 
 mended for its liberality and consideration. If the olfer Avas only six pe/ 
 cent, per annum, and the conditions otherwise exacting ; if the rate was not 
 fixed at twenty- five cents, and if the control of the telegraph was not Cana- 
 dian, there might be some valid objection. But with all these conceded, 
 and a dividend guaranteed as good as that attached to any other sound 
 security v/hatever, surely it is " looking a gift horse in the mouth " to criti- 
 cise, carp at, and refuse the offers made. This refusal, should it occur, 
 will likely be all the more keenly resented, in view of its liberality an<l 
 consideration. 
 
 MR. JAY GOULD. 
 
 The virulent attacks which have been made upon Mr. Jay Gould in 
 connection with this matter make it i)roper that some allusion should bo 
 made to the position ho holds in relation to the telegraph interests of 
 Canada. In the first place Mr. Gouhl has a larger investment in Canada 
 than any other single non-resident, and in Dominion Telegr.iph stock alone, 
 his holding amounts to nearly a quarter of a million. This sum was ad- 
 vanced two years ago in hard cash, for a purchase of the stock, and mainly 
 went to liquidate the indebtedness of the Dominion Company when it was 
 on the eve of bankruptcy. It had readied this condition notwithstanding 
 the prevalence of the twenty-five cent rate for messages; and the subsequent 
 uncalled for reduction to twenty cents must have entailed a heavy loss on 
 the company. The consequence of Mr. Gould's investment was that the 
 cheapest telegraphy in tho world has been afforded to Canadians in the 
 past two years, and if the future is to be judged by tho past, his continued 
 interference — did he seek to interfere — should be coveted rather than con- 
 demned. But Mr. Gould does not seek to meddle with Canadian telegraph 
 matt ''8, except as tho largest stockholder, to favor a plan whereby a rea- 
 soDii lo return can be had on his investment. No < oncern has been less 
 intf tered with than has the Dominion Conq)any since it was leased to Mr. 
 Gould and his associates. Not only in connection with tho Dominion 
 Company, but in regard to the whole telegraph interests of Canada no 
 treatment could be fairer, more considerate, and even generous, than has 
 been experienced at the hands of these Americans. To add emphasis to the 
 liberality of their policy in the past, and to show how littlo ground there is 
 for the charge that they are trying to get possession of Canadian telegraph 
 
Y. 
 
 MR. JAY GOULD. 
 
 13 
 
 iblo buHi- 
 divorfc in 
 i, is trans- 
 5. If the 
 L Chicago, 
 company, 
 lessages to 
 willing to 
 Jompauy a 
 itiug inter- 
 instead of 
 ;o be corn- 
 inly six pe<: 
 ate was not 
 i not Cana- 
 ) conceded, 
 ither sonnd 
 ih " to criti- 
 [d it occnr, 
 jerality and 
 
 ay Gould in 
 m should bo 
 
 interests of 
 it in Canada 
 
 stock alone, 
 sum was ad- 
 ;, and mainly 
 
 when it was 
 withstanding 
 10 subsequent 
 heavy loss on 
 was that the 
 adians in tho 
 his continued 
 ;her than con- 
 lian telegraph 
 vhereby a roa- 
 
 has been less 
 s leased to Mr. 
 tho Dominion 
 of Canada no 
 ■rous, than has 
 mphasis to tho 
 ground there is 
 ,dian telegraph 
 
 lines, Mr. Gould and liis friends now agree to assign back to a Canadian 
 company their lease of the Dominion Company, lie thus returns to Cana- 
 dian control the largo interest he has ucquircd in the country, trusting to 
 tho good sense of tho Canadians tlioms ^Ivcs to see to it that lie gets a fair 
 return. 
 
 AVhen tho consolidation of tho Telegraphs was effected in the United 
 States there was a great outcry made that rates would bo advanced, and a 
 grinding monopoly the consequence. Tho result however has been that 
 rates have not been advanced, but on tho contrary, equalized and made 
 more uniform ; and tho service has been all so perfected and improved, that 
 a great change has conio over public sentiment in this matter. I am con- 
 fident that this will be the case in (^anada, if thesti arrangements are carried 
 out according to the jiresent intentions of parties interested, and that tho 
 service Av ill bo made equal to that of nny other Telegraph service of any 
 other country in tho world. 
 
 GOVERNMENT INTERFERENCE. 
 
 There seems to rest in the minds of some tho expectation that govern- 
 ment interference will prevent a consolidation of telegraph interests. How 
 government could interfere without some such consolidation is a mystery. It 
 is alleged that this stei) would prevent a monopoly, yet how tho government 
 could assume the telegraphs, and not create a monopoly, is not explained. 
 Whether a government monopoly is any more enjoyable than a free lield and 
 no favor, for telegraphic enterprise as for all other business pursuits, is a 
 question not fully discussed. Whiit advantages would come from government 
 telegraphs over what are at present enjoyed are unenumorated. Certainly 
 it would not be rates lower than have hitherto prevailed, or that it is 
 agreed will xir'.ivail under the proposed fusion of interests. Clearly it would 
 be impossible to more ctfectually serve tho public, to offer facilities extending 
 over a wider area of country or a greater number of localities than now 
 exists. In all towns there is only one post office, yo'v there have been in 
 almost all places two telegraph offices. In all large cities the post office is 
 confined to ono central location, Avliile tho telegraph otters its services at a 
 dozen different points. Tho English government, with its enormous popu- 
 lation, its density, and tho contiguity of its towns, offers by its telegraph 
 service no advantages greater than are now and will be ofiercd in Canada, in 
 point of either rapidity, accuracy, extent of facilities, or cheapness. What 
 real practical benefit would therefore come from government interference is 
 difficult to define. What disadvantages inight follow are not so difficult to 
 enumerate, especially in the patronage for party purposes, the <lisclosures 
 of business and political plans by tho ease with which telegraphy is now 
 interpreted, and, above all, tho dangers that might result from an aggrega- 
 tion of power in the hands of politicians, to be used for purposes of their 
 own. That tho government should, with all its other cares, bo expected 
 to take over tho business of telegraphy, and yet bo in such haste and at 
 such cost to get out of tho business of building and managing railways, is 
 one of these vague ideas that llud lodgement uiustly iu the miuds of those 
 
 ;j;-.r".3i»i.t^^ 
 
14 
 
 a () VERNMENT INTERFEUESCE. 
 
 fi 
 
 I ' 
 
 i'l 
 
 III 
 
 
 
 who do not seriously refltMt upou the subject. Among the serious advo- 
 cates of sueh a project will be found some patriots that hope to make 
 a place for themselves or their friends. • ■ < • 
 
 But to the shareholders of the Montreal Company, the plan now before 
 them should have an additional attraction, with a prospect of government 
 interference, for in that case the guarantee of eight per cent., which this 
 oflfer brings to their acceptance, would have to be assumed by the Govern- 
 ment, and hence the stockholders would receive a much higher rate of 
 dividend than if the property was to be taken without such a guarantee. 
 
 THE GREAT NORTH WESTERN TELEGRAPH COMPANY OF 
 
 CANADA. 
 
 The machinery which it is proposed to use to accomplish the union of 
 telegraph interests in the Dominion is that fouad in the charter of the 
 Great North Western Telegraph Company of Canada. This company was 
 incorporated by Parliament at its session before last, and has been regularly 
 organized for the purpose of acquiring and working telegraphs in the 
 North Western Provinces. It already owns and operates all the lines be- 
 longing to private individuals in Manitoba, with a subscribed capital of 
 $50,000. It is now intended to increase the capital to $500,000, the greater 
 portion of which has already been subscribed for by parties abundantly 
 able to pay it up, which subscription will bo called for immediately in 
 the amounts required. The President of the company has hitherto been 
 the Hon. A. G. Bannatyne ; Vice-President, J. A. M. Aikens (son of Hon. 
 J. C. Aikens, Secretary of State, Ottawa); and Mr. E. P. Leacock, Secre- 
 tary. Among the existing Directors are Hon. John Xorquay, Premier of 
 Manitoba; John Schultz, M. P., James Anderson, Richard Fuller, and 
 Horace McDougall, Winnipeg; Adam Brown, Hamilton; O. S. Wood, 
 Montreal, and Erastus Wiman. 
 
 Mr. AVood has been for years the largest stockholder in the North 
 Western Company, whoso lines exclusively occupied the vast territory in- 
 cluded in Wisconsin, Iowa, Minnesota, and Dakota, and whose lines afford 
 the only means of communication to Manitoba. His connection with this 
 company is, therefore, a most natural one ; and it is fortunate that his great 
 experience in telegraph matters, and his high character for integrity and 
 prudence, can be made available at the present juncture. His presence in 
 the board is a guarantee that the interests of the Montreal Company, among 
 whose stockholders ho has so many friends, will not be allowed to suffer. 
 
 Through the courtesy of Mr. Bannatyne, I have been elected to the 
 position oi President, because of the necessity of having some person 
 thoroughly familiar Avith the matter to close the contracts betv een the 
 various companies. A resolution authorizing this action has passed the 
 Board of Directors, subject to ratification of the shareholders at a meeting 
 ■wMcn has been called for that purpose. Whether I shall continue to 
 occupy this position of President or not, will rest la the future -with the 
 shareholders and directors. It is the intention, at the next annual 
 
 ,.,* 
 
Nonrn western teleghaph vomi'any of caxada. 15 
 
 ioub advo- 
 )0 to mako 
 
 now before 
 jovernment 
 wlr.cli this 
 slie Govern- 
 rber rate of 
 larantee. 
 
 ANY OF 
 
 ho imioii of 
 arter of the 
 ompany was 
 3cn regularly 
 raphs iu the 
 the lines bc- 
 ecl capital of 
 ), the greater 
 J abuudantly 
 imediatoly in 
 litherto been 
 (son of Hon. 
 sacock, Secre- 
 ,y, Premier of 
 I Fnller, and 
 O. S. Wood, 
 
 in the North 
 t territory in- 
 se lines afford 
 tion with this 
 that his great 
 integrity and 
 ^is presence in 
 mpany, among 
 ed to suffer. 
 
 elected to the 
 g some person 
 8 betv een the 
 las passed the 
 rs at a meeting 
 ill continue to 
 iituro with the 
 next annual 
 
 1 
 
 meeting, to elect such a board of directors as will bo rei)resontativt, iu its 
 character of all the various local interests. In all respects the control 
 and government of the company, it will bo seen, is entirely ('anadian, the 
 only non-resident from the Dominion being myself. The fact that I am a 
 resident of New York m.-^kes me none the less sincere, as a Canadian, to 
 further the Canadian telegraph interests in the future, as I have had the 
 good fortune to do in the iiast. The large amount of telegraphic business 
 which my lirm dispenses at its eighty different branches, amounting to over 
 ^.'jO.OOO annually, gives me here a legitinmte claim to consideration. But, 
 aside from this, if 1 have any claim to the conlideuce of the telegraph 
 authorities in N(!W York, I think they will admit that it is based mainly 
 upon my loyalty to Canadian interests, and to my great anxiety at all 
 times to advance them. That my position here and accessibility to these 
 authorities will be found iuiluential for the future advantngo of these 
 interests, 1 trust none will have occasion to deny. It is safe to say that, but 
 lor this coutiguiiy and iniluence, the favorable proposition now before you 
 would never have been submitted. 
 
 I refer to all these particulars, both as to the company and to myself, 
 simply because the demand Ibr information on these points seeniod to be a 
 reasonable one, and I have endeavored to comply with it iu the fnll'jst 
 manner. 
 
 nUCTICAL KESULTS. 
 
 Permit me to close with an enumeration of some of the advantages 
 which are certain to result from a union of telegraph interests in Canada. 
 In the first place, the rate Avill bo permanently and dcliuitely lixed at a 
 maximum of twenty-live cents for ten words. Further, it is proposed that a 
 rate of iifteen cents only shall be charged between towns and villages with- 
 in twelve miles of each other, and a rate still more favorable for night 
 messages. It is also understood that the maximum rate, for press reports, 
 shall not exceed ^5 cents i)er hundred words, and that if a lower rate than 
 this can be afforded, for lengthy reports, sent during the night, it will be 
 conceded. 
 
 The plan proposed is one by which the lines of the Dominion Company 
 will revert to fJanadiau management, and under which the entire telegraph 
 interests of the whole country will be harmonized, and all worked as inti- 
 mate connections of tho Western Union Company in the United States, 
 getting the beuelit in this way of all the advantages of that company's vast 
 and complete organization. A large sum of money will have to be expended 
 on lines of both companies in order to put them in an efficient state of repair, 
 and to provide the increased facilities necessary for the business. It is con- 
 templated to expend not less than $40,000 within a year for this purpose. 
 
 The advantages of this arrangement Avill bo that the service can be in 
 every way greatly improved, not only as regards home and local service, but 
 as regards the foreign connections in every direction. The new company 
 will be able, under these new arrangements, to provide new and more direct 
 connections, without transfer or repetitions, and consequent delay, between 
 
i-*^i!,|i| 
 
 16 
 
 J7iM C TIC A L 11 ES UL TS. 
 
 ;« 
 
 .■^'i 
 
 '■I 
 
 '1 
 
 all princiiJal towns in the custom and western provincos of the Dominion. 
 It will also bo o.ble to establish dlroct connection between Jill the principal 
 towns in Canada, and the principal cities in the United States ; thus i'acili- 
 tatiug greatly the business intercourse bo ween peoi)le on both sides of the line. 
 
 It may not have been generally known, that heretofore there has been 
 no geographical or national boundary linii dividing the telograi)h system. 
 Hereafter there will be a still greater interlacing an«l provision for com- 
 munication. It will be the, aim of the new couFolidated company to so 
 amply an J perfectly provide the telegraph facilities needed, both as regards 
 their ex*:6r.t and cheapness, as to make an opjiosition unnecessary. Unless 
 the new company does this, its promoters are- well aware that thoy need not 
 expect to be without competition for any length of time;. There can be no 
 monopoly of the telegraph business in Canada. Telegraph companies may 
 be formoJ, at an hour's notice, to build lines, nnder tho general act of Pai- 
 liament. 
 
 Of course, there are many i)eoplo who wonld i)refer that tho companies 
 should go on fighting each other, until both were completely crippled and 
 exhausted, but it certainly is not, in tho long run, for the benefit of the 
 public, that this should bo done. The country can be better served by one 
 strong and able company, than by two, or half a dozen, in a crippled and 
 bankrupt condition. 
 
 There are numerous other advantages, aside from tho steady dividend 
 guaranteed shareholders of tho Montreal Company, which will follow the 
 acceptance of the propositions before you, and which, it is submitted, can 
 hardly be expected unless those propositions are agreed to. But your 
 liatience has already been greatly taxed with this communication, fov the 
 length of which I have to apologize, and urge, in palliation, my anxiety to 
 place you in possession of all the facts and considerations necessary to an 
 intelligent verdict on the grave question, as to whether you will accept, or 
 reject, the proi)Osal8 that are now before you. 
 
 Soliciting personal communication from shareholders desiring such 
 further information as I can give, I have tho honor to be 
 
 ' •': i;' < • Your obedient servant, ■.-•■■.: . ^ ^; . • 
 
 ERASTUS WIMAN. 
 
 314 Bhoadway, New York, July 1, 1881. 
 
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