GENERAL: I have the honor to submit herewith an inventory of the public property at this building in conformity with instructions indorsed on copy of " An act to provide for inventories and accounts," &c., (public No. 191,) approved July 15, 187 and issued from the Adjutant General's office under date of July 30, 1870.

Very respectfully, your obedient servant,

Hon. W. W. BELKNAP,

Secretary of War.

JAMES EVELETH,

Superintendent.

Government building at corner of F and Seventeenth streets-Continued.

In compliance with the resolution of the Senate of the 14th of June, 1870, information in relation to charges made by the International Ocean Telegraph Company upon messages passing over their lines.

DECEMBER 13, 1870.-Read, referred to the Committee on Foreign Relations and ordered to be printed.

To the Senate of the United States :

I transmit, in answer to the resolution of the Senate of the 14th of June, 1870, a report from the Secretary of State, and the papers by which it was accompanied.

WASHINGTON, December 13, 1870.

U. S. GRANT.

DEPARTMENT OF STATE,
Washington, December 12, 1870.

The Secretary of State, to whom was referred the resolution of the Senate of the 14th of June, 1870, requesting the President, "if in his judgment not incompatible with the public interest, to inquire into the charges made by the International Ocean Telegraph Company upon messages passing over their lines, and report to the Senate, if they are in excess of the rates allowed by the act of Congress approved May 5, 1866," has the honor to lay before the President the papers mentioned in the subjoined list, which contain all the information upon the subject in the possession of this Department.

Respectfully submitted:

The PRESIDENT.

HAMILTON FISH.

List of accompanying papers.

Mr. Lyon to Mr. Fish, 30th May, 1870, with an accompaniment.
Mr. Fish to Mr. Smith, 25th June, 1870.

Mr. Field to Mr. Fish, 27th June, 1870, with an accompaniment.
Mr. Smith to Mr. Fish, 6th July, 1870, with an accompaniment.
Tabular statement.

Mr. Samuel E. Lyon to Mr. Fish.

NEW YORK, May 30, 1870. (Received June 1.) On the occasion of the interview which I had the honor lately of having with you in Washington, you stated that complaints had been made, against the Cuba Cable Company that it discriminated against eessages sent to European countries; I was then unable to give you the facts bearing on that question in detail.

I now take the liberty of inclosing you a statement showing accurately the tariff of prices which have been charged by this company since its establishment till this time upon its European traffic. This shows that as the business has developed the company has reduced its tariff from time to time, so as to give to the public as cheap a rate as is compatible with keeping up a line which has no local business, and at the same time making to its stockholders a reasonable return on an investment which is short-lived at best, and is always exposed to peculiar hazards.

The last reduction on foreign messages was made on the 10th of August last.

Between that time and the 1st of January following a negotiation was entered into between the Cuba and the Western Union Companies, for the purpose of developing an increased business between Cuba and the United States; and to this end an agreement was made between them to deliver messages to any part of the United States east of the Mississippi River, (including St. Louis,) for five dollars. This went into operation on the 1st of January, 1870, and still continues with considerably reduced receipts, as, for instance, in the months of January, February, March, and April, 1869, the Government taxes paid by this company on their gross receipts amounted to $3,706 82, while for the corresponding months of 1870, since the new tariff went into effect, they have fallen to the sum of $2,974 71. As a consequence of this new arrangement entered into since the last European tariff was fixed, any one in Cuba or in Europe can avail themselves of it by having the message repeated at New York or at any other point in the United States through which it passes, so that, as a naked matter of fact, the discrimination complained of does not exist. But assuming that dealers should not be put to the inconvenience of having their messages repeated, this can in no sense, beyond that recognized as legitimate by all governments, be considered a discrimination against foreign countries. It is an effort to increase the home business of the United States by the use of telegraphic communication for other than business

purposes.

Foreign corporations doing business in this country are specially taxed by both the General and State Governments beyond that paid by domestic corporations. This has not been considered by the majority of the American people an unjust discrimination.

Exceptional rates are common to all telegraph companies.

To perform the service between two important points, rates can be afforded at a much less price than for the same distance between other points that cannot furnish the like amount of business. Even in the absence of so good a reason as this, these discriminations are made, and the parties complaining in this instance adopt it as against the United States. A message may be sent from London to New York for £1 108., with three shillings for each additional word. This, by the table prepared by the Director of the Mint, is 87 273, while the

charge from New York to London is $7 50, and seventy-five cents on each additional word.

Companies like the French and English companies, having lines between the most important commercial points of the world, and who make the entire telegraphic system of four continents their tributaries, especially if acting in combination, may well fix a low tariff and still pay dividends, though it has been publicly stated by the claimant for telegraphic honors of the day, that ocean cables so far have not returned to their stockholders three per cent. on their investment. But, of a line with a terminus at a comparatively unimportant point, like the Cuba cable, the case is altogether different. Its lines are not employed in any proportion to their capacity, but a full working force is necessarily kept up and the expense of working a cable of one thousand miles is no greater than one of one hundred miles.

For the latter to adopt a tariff upon a corresponding scale with the former, would be in the end ruinous to the corporators and injurious to the public.

This is illustrated by the proposition contained in a letter of Mr. Cyrus W. Field, as vice-president of the Newfoundland Company, which has been published, although no intimation was given while the correspondence was going on that its publication was intended. This is the printed statement alluded to by the secretary, which I had not then seen. In the letter of May 3, 1870, Mr. Field, after declining the proposition of this company, the through tariff 33 per cent., says:

"He would propose that our through tariffs be based either upon the cash cost of the lines, or pro rata upon the miles of land line of each and exact the miles of cable of each." He states the relative cost of the lines as follows: W. F. Atlantic French lines, $18,000,000 to $19,000,000; Cuba line, $600,000.

Upon this basis of the proposition, if carried out upon the present tariff of the foreign lines, the Cuba Company would receive 243 cents for a message of ten words.

Upon the basis of the alternative proposition, the Cuba Company would receive for the same services the sum of 454 cents. No one knew better than Mr. Field that these propositions could not be accepted, except to the dissolution of this company, and the swift haste with which the correspondence was published and sent to the Secretary of State discloses its object.

In all respects this company have complied faithfully with the conditions imposed upon them by their grant, and unless it be an offense to refuse to enter into a combination with other companies they have done no wrong.

So far they have not been able to pay cash dividends, except upon their preferred stock, and are now actively engaged in carrying out conLections with the other principal West India Islands, and with South America.

Since their European tariff was last reduced they have been making a large reduction to the people of the United States and to all others who choose to take their messages from the United States.

Just so soon as the business will warrant a further reduction the same policy will be pursued, unless the efforts of one who looks upon every enterprise of this description, not under his own auspicies, as an intruder, shall be successful in breaking down the company.

SAMUEL E. LYON.

*This is nearly 50 per cent. below the truth, but his proposition is based on this e stimate.