Sense at Last

For more than ten years practically every U.S. citizen who has thought about it at all has believed that the only way to make economic sense out of the U.S. telegraph industry was to turn it into a monopoly. Yet during all those years Western Union and Postal Telegraph have continued wasteful (and, for Postal, downright suicidal) competition with each other. At the same time they have had to buck increasing competition from the telephone, the teletype and air mail.

Main reason for this economic nonsense is that, under anti-trust laws, a telegraph merger is illegal unless specifically authorized by Congress. And Congress was molasses-slow in wrangling through a bill satisfactory to all parties--particularly to security-minded labor. (The labor confusion was confounded by the fact that Postal has a C.I.O. contract while Western Union is A.F. of L.) Last week, at long last, a telegraph merger bill went to the White House for the President's signature. Its chief labor safeguards might have sounded fair enough during a depression, but they sounded peculiar at a time when the whole U.S. war economy was being terribly strained by the manpower crisis. Every telegraph employe hired before March 1941 is given four years' job security before he can be fired (newer employes get a month's severance pay for each year of service).

Nonetheless the manpower crisis itself has upped both companies' labor turnover to such an extent that Congress' solicitude for their 65,000 employes will not be nearly so costly as it sounds. And if & when the FCC approves a specific merger plan, the end should more than justify the means. Postal, which went through the wringer only two years ago, is again loaded with debt--this time $9,000,000 of RFC notes--and lost over $4,000,000 last year. Western Union, with some 80% of the U.S. telegraph business, turned in a good profit ($9,354,000 v. $7,366,000 in 1941) but competing with Postal has occupied more of its energies than streamlining its services.

After the war a single telegraph company, enjoying a monopoly's operating savings, should be able to give single-minded attention to putting up a real fight for more--and more profitable--business. Both companies have important technological improvements which they have been slow to push, pending a settlement of their competitive (and labor) problems. Meanwhile the release of some of the two companies' duplicating equipment could advance the war effort. If all their parallel wires were torn down, for example, it might release as much as 10,000 tons of badly needed copper.

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