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1/22/35
In reporting against exclusive contracts the Commission said that it would be "desirable whether or not legislation was enacted authorizing the merger of telegraph companies."
"The purpose of competition can be served only as the pub¬ lic has freedom to choose between competing carriers", the report stated. "It is believed that most, if not all of the exclusive provisions are illegal at the present time. Certainly, the ex¬ clusive provisions in contracts between communications carriers and land grant railroads are an open flouting of existing laws and of decisions of the Supreme Court of the United States. "
It was shown that the Western Union had exclusive con¬ tracts with 1316 hotels, and 225 clubs and the Postal with 115 hotels.
A portion of the amendment proposed which would practi¬ cally abolish franks read: "It shall be unlawful for any carrier to issue or recognize any frank, or to render any free service except in situations involving the safety of life or property, including hydrographic and weather reports and medical assistance to injured or sick persons on ships at sea. "
"The officers and employees of railroads and other com¬ mon carriers who actually receive franks at the present time are not those who are least able to pay for communications service", the Commission reports. "The wage earner and the man who receives his pay by the hour or by the day are not included; instead, franks are issued to higher officials and to men who salaries amply enable them to pay for the handling of their communications. The issuance of franks is to some extent for the purpose of influencing men who may be in a position to route the business of the companies with which they are connected over the company issu¬ ing the frank. Franks are also treated as a means by which officers of the issuing company repay favors and courtesies extend¬ ed to them personally. "
The amount of revenue lost in handling franked messages for persons other than officers, agents and employees of communi¬ cation carriers and the families of such persons, is estimated at approximately $300,000 per year. The communications industry as a whole receives nothing in return for this service which goes to a small group.
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