All theorizers upon the subject of the telegraph fall into the error
that the amount of business which may be done at any point (the rates
being low enough) is in the ratio of population. An investigation of the
subject will show this to be entirely erroneous. Three years ago, when
the subject of telegraphic communication between the Eastern and Western
continents was discussed by those most intimately connected with the
enterprise, no one estimated the number of messages which would pass
between the two continents, daily, at a rate of $50 gold for ten words,
below 500. But few placed the figures so low. Most of them estimated the
number at two or three times this minimum.
In 1863 Mr. Cyrus W. Field made the following remarks before the Chamber
of Commerce of New York, in relation to the probable amount of business
that would be done between Europe and America when communication by
telegraph should be established: “To express my own opinion, from pretty
large experience on the subject, I do not believe that _ten_ cables
would begin to do the work which would, in a short time, be given to
it.”
At the banquet given in London, in 1864, to inaugurate the renewed
attempt by the Atlantic Telegraph Company to unite Europe and America by
means of the Atlantic cable, Mr. Cromwell F. Varley made the following
remarks touching the amount of business that would be offered for
transmission over the cable: “I feel great confidence that, when once a
cable is successfully laid across the Atlantic, the demands upon it will
be so great that you will have to lay one or two per annum for the next
twenty years, or even more.”
Their disappointment was, therefore, very great when, after the Atlantic
Cable was in operation, it was found that the daily average at the $100
tariff was but 29 messages, and at the $50 tariff, which was in
operation thirteen months, it was but 64. At the $25 rate the average
advanced to 131; and although the rate has been still further reduced to
$16.85, the average is but 201. This illustration is sufficient to prove
the fallacy of all reasoning concerning telegraph business based merely
upon population. We venture the prediction that, at the rate of $5
between Europe and America, the number of messages which would pass per
day would never equal the number exchanged daily between New York on one
hand, and Philadelphia and Boston on the other. The reason is simply
this: The number of messages which will pass within a given time between
two points depends, first, upon a reasonable charge for transmission,—a
charge conveniently within the means of those having occasion to
communicate; and secondly and mainly, upon the number of people at
either extreme having intimate business relations with those at the
other. The vast commerce of the Old World and the New is not exchanged
in detail, but in bulk. A few banking houses on each side make all the
exchanges for both continents, and the agricultural products and the
manufactures of both are also exchanged in substantially the same
manner.
We have shown how fallacious is the claim that the increase of business
is dependent upon the tariff, by the statistics of our own and foreign
countries, by which it appears that business has sometimes largely
increased at an advanced rate. We do not desire to be understood,
however, as saying that low tariffs, under similar circumstances, will
not bring more business than high ones. But we do say that it is
susceptible of proof, that the minimum rate is undoubtedly much higher
than most of those who theorize upon this subject are willing to
believe. Take the case of the Atlantic Cable as an illustration. During
the three months at which the tariff was $100, and the daily average of
messages 29, the receipts per day were £505. During the thirteen months,
at the average of 64 messages daily, the receipts were £579. During the
nine months, at the average of 131 messages per day, the receipts were
£635. And for the two months since the rates were reduced to $16, the
daily average has been 201 messages, and the average receipts £596.
Now it happens, fortunately for the Cable Company, that the present
volume of business is considerably less than the capacity of their
cables; so that the increase of that business has been attended with but
a very slight additional expense, the cost to operate being the same at
offices open day and night, whether operators are occupied all or only a
part of the time. But suppose, for illustration, that the limit of the
capacities of the cables will be reached when the average number of
messages per day is 250. To undertake to transmit any number beyond this
without further facilities would result in crowding and confusing the
business to an extent which would inevitably produce dissatisfaction. On
the other hand, to provide an additional cable would cost a sum of money
which it might be exceedingly difficult to raise. It seems proper,
therefore, that the profits from this business should always be
considerably more than enough to yield a proper return for the capital
invested, so that greater facilities may be provided out of surplus
profits; and, as facilities are increased, rates may be gradually
reduced, until, by judiciously pursuing this course, the charges for
telegraphing may be materially diminished, without endangering the
revenues to which owners of telegraph property are justly entitled.
_Statistics of Traffic through the Atlantic Cables from July 28, 1866,
to November 1, 1868._
┌────────┬─────────┬─────────────────────────────────────────┬───────┐
│ Number │ Daily │ │Average│
│ of │ Average │GROSS AMOUNT of RECEIPTS accruing to the │Amount │
│Messages│ No. of │TWO ATLANTIC CABLES, between Valentia and│ per │
│ per │Messages.│ Heart’s Content. │ Day. │
│ Month. │ │ │ │
├────────┼─────────┼─────────────────────────────────────────┼───────┤
│ 1,104 }│ 29 │From July 28th 1866, under [25]£500 }│ £505│
│ │ │to 31st Aug., £20 Tariff │ │
│ 837 }│ │From Sept. 1st 1866, under 456 }│ │
│ │ │to 30th £20 Tariff │ │
│ 831 }│ │From Oct. 1st 1866, under 491 }│ │
│ │ │to 31st £20 Tariff │ │
├────────┼─────────┼─────────────────────────────────────────┼───────┤
│ 1,530 }│ 64 │From Nov. 1st 1866, under [26]502 }│ £579│
│ │ │to 30th £10 Tariff │ │
│ 1,582 }│ │From Dec. 1st 1866, under 493 }│ │
│ │ │to 31st £10 Tariff │ │
│ 1,686 }│ │From Jan. 1st 1867, under 466 }│ │
│ │ │to 31st £10 Tariff │ │
│ 1,764 }│ │From Feb. 1st 1867, under 549 }│ │
│ │ │to 28th £10 Tariff │ │
│ 2,147 }│ │From March 1st 1867, under 666 }│ │
│ │ │to 31st £10 Tariff │ │
│ 2,624 }│ │From April 1st 1867, under 722 }│ │
│ │ │to 30th £10 Tariff │ │
│ 2,262 }│ │From May 1st 1867, under 705 }│ │
│ │ │to 31st £10 Tariff │ │
│ 1,843 }│ │From June 1st 1867, under 597 }│ │
│ │ │to 30th £10 Tariff │ │
│ 1,432 }│ │From July 1st 1867, under 542 }│ │
│ │ │to 27th £10 Tariff │ │
│ 1,693 }│ │From July 18th 1867, under 401 }│ │
│ │ │to 31st Aug., £10 Tariff │ │
│ 1,860 }│ │From Sept. 1st 1867, under 515 }│ │
│ │ │to 30th £10 Tariff │ │
│ 2,505 }│ │From Oct. 1st 1867, under [27]715 }│ │
│ │ │to 31st £10 Tariff │ │
│ 2,292 }│ │From Nov. 1st 1867, under [27]661 }│ │
│ │ │to 30th £10 Tariff │ │
├────────┼─────────┼─────────────────────────────────────────┼───────┤
│ 3,901 }│ 131 │From Dec. 1st 1867, under [27]732 }│ £635│
│ │ │to 31st £5.5 Tariff │ │
│ 4,739 }│ │From Jan. 1st 1868, under [27]756 }│ │
│ │ │to 31st £5.5 Tariff │ │
│ 5,128 }│ │From Feb. 1st 1868, under [27]860 }│ │
│ │ │to 29th £5.5 Tariff │ │
│ 4,507 }│ │From March 1st 1868, under [27]707 }│ │
│ │ │to 31st £5.5 Tariff │ │
│ 4,320 }│ │From April 1st 1868, under [27]718 }│ │
│ │ │to 30th £5.5 Tariff │ │
│ 3,538 }│ │From May 1st 1868, under 550 }│ │
│ │ │to 31st £5.5 Tariff │ │
│ 2,884 }│ │From June 1st 1868, under 447 }│ │
│ │ │to 30th £5.5 Tariff │ │
│ 3,217 }│ │From July 1st 1868, under 490 }│ │
│ │ │to 31st £5.5 Tariff │ │
│ 3,740 }│ │From Aug. 1st 1868, under 558 }│ │
│ │ │to 31st £5.5 Tariff │ │
├────────┼─────────┼─────────────────────────────────────────┼───────┤
│ 5,053 }│ 201 │From Sept. 1st 1868, under 501 }│ £596│
│ │ │to 30th £3.7.6. Tariff │ │
│ 6,341 }│ │From Oct. 1st 1868, under 615 }│ │
│ │ │to 31st £3.7.6. Tariff │ │
│ 6,877 }│ │From Nov. 1st 1868, under 670 }│ │
│ │ │to 30th £3.7.6. Tariff │ │
└────────┴─────────┴─────────────────────────────────────────┴───────┘
Footnote 25:
During this month over £100 per day were paid by the New York Herald
for news reports, and many persons sent messages as a novelty.
Footnote 26:
During this month the despatches sent by the United States government
averaged over £100 per day.
Footnote 27:
During these months there was extraordinary excitement in cotton.
A single wire between New York and Plaister Cove, Cape Breton, the
eastern terminus of the Western Union Telegraph Company’s lines, not
only promptly transmits all the telegraphic business that is done
between Europe and America, but every message is telegraphed back for
comparison with the original, to insure correctness.
PROGRESS
OF THE
ELECTRIC TELEGRAPH IN AMERICA AND EUROPE.