Clear All Wires

For weeks, word was whispered around Wall Street that Western Union Telegraph Co. common was a good buy, although the company had not made a profit for two years. Wall Streeters snapped up the stock so eagerly that it rose to 28, a 33% advance since the first of the year. Last week, the good news came out: although Western Union's operating revenues were off almost 5% to $42.3 million, the company had a net profit of $236,766 for 1950's first quarter v. a $2,550,878 loss for the quarter in 1949.

The chief reason for these chipper tidings from the 99-year-old company was a sweeping mechanization program, which has been pushed close to completion by lean, indefatigable President Walter Peter Marshall. Onetime executive vice president of Postal Telegraph, Inc., 49-year-old Walter Marshall went over to Western Union when the two companies were merged in 1943, stepped into the top executive job when President Joseph L. Egan died in December 1948. The company had already started mechanizing but it was Marshall who pushed through an $80 million appropriation to do it fast.

Electric Brains. Before the changeover, cross-country telegrams coming into stations on paper tape were pasted on blanks, sorted by hand, then retransmitted. Now the relaying is done by "electric brains" which scan each message for a routing symbol, then speed it on its way.

By such changes, Western Union had cut its staff from 66,000 to 43,000 in four years; the new mechanization was saving it money at the rate of $17 million a year. To reduce expensive messenger service, Marshall last year equipped 6,000 business offices with Desk-Fax, a device which permits a customer to send and receive telegrams without leaving his desk.

The Chosen Instrument? Marshall thinks that Western Union needs more than mechanization to put it in the black for good. As a starter, he wants Congress to repeal the stiff 25% excise tax on telegrams. He also thinks that Western Union should have a monopoly on U.S. commercial record communications (i.e., written electronic messages such as telegrams, teletype, etc.). To this end, he is campaigning for Government permission to let Western Union purchase American Telephone & Telegraph Co.'s teletype lines, as well as the $46 million-a-year transoceanic cable business of American Cable & Radio Corp., RCA Communications, Inc. and about a dozen other companies.

But ACR and RCA also want to be the U.S. "chosen instrument" for worldwide cable communications. They argue that Western Union should get rid of its cable business, which was a condition to the Postal Telegraph merger. Western Union contends that it needs the overseas revenue, plus a clear field in the U.S. telegram business, before it can be sure of a profitable living in competition with its remaining rivals, the airmail letter and the telephone.

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