THE STATE TELEGRAPHS SUBSIDIZE THE NEWSPAPER PRESS
Why the newspaper press demanded nationalization. Mr.
Scudamore gives the newspaper press a tariff which he deems
unprofitable. Estimates of the loss involved in transmitting
press messages, made by responsible persons in the period from
1876 to 1900. The State telegraphs subsidize betting on horse
races.
Before proceeding with the further discussion of the intervention of
the House of Commons in the details of the administration of the State
telegraphs, it is necessary to review briefly the tariff on messages
for the newspaper press.
Before the telegraphs had been acquired by the State, the telegraph
companies maintained a press bureau which supplied the newspapers with
reports of the debates in Parliament, foreign news, general news, a
certain amount of London financial and commercial intelligence, and
the more important sporting news. While Parliament was in session,
the messages in question averaged about 6,000 words a day; during the
remainder of the year they averaged about 4,000 words daily. The annual
subscription charges for the aforesaid services ranged from $750 to
$1,250. Before the Select Committee of 1868, the representatives of
the newspapers asserted that those subscription charges yielded the
telegraph companies, on an average, 8 cents per 100 words. They further
asserted that the telegraph companies ascribed 62.5 per cent. of the
cost of the press bureau to the transmission of the news; and 37.5 per
cent. to the collecting and editing of the news.[98] But neither the
representatives of the press, nor the Select Committee itself, called
any representatives of the telegraph companies to testify upon these
latter points.
The subscribers to the companies' press bureau service also were
allowed to send messages at one-half the rate charged to the general
public; and in case the same newspaper message was sent to several
newspapers in the same town, the charge for each address after the
first one was 25 per cent. of the sum charged the first addressee.
By coöperation, therefore, the newspapers in the larger towns were
able to obtain considerable reductions from the initial charge,
which, as already stated, was 50 per cent. of the tariff charged the
general public.[99] Apparently, however, little use was made of these
privileges. In 1868, for instance, the subscriptions to the press
bureau aggregated $150,000, whereas the sums paid for messages to
individual newspapers aggregated only $10,000.[100]
[Sidenote: _The Newspapers' Grievance_]
The newspaper proprietors admitted that the charges for the press
bureau service were entirely reasonable; but they desired to organize
their own press bureaux on the ground that they were the better judges
of what news the public wanted. Since the telegraph companies would not
give up their press bureau, the newspaper proprietors joined in the
agitation for the nationalization of the telegraphs.[101]
As soon as the Government began to negotiate with the telegraph
companies for the purchase of their plants, the newspaper proprietors
organized a committee to protect their interests and to represent them
before the Select Committee to which had been referred the Electric
Telegraphs Bill of 1868. That Bill had said that the tariff was to be
uniform, irrespective of distance, and was not to exceed 24 cents for
20 words, address not to be counted. It had said nothing on the subject
of the tariff to be charged to the newspaper press.
On May 15, 1868, Mr. Scudamore had written the Committee of the
newspaper proprietors: "As a matter of course the Post Office would
not undertake to collect news any more than it would undertake to
write letters for the public, but the news being collected, it could,
and I submit, ought, to transmit it at rates at least as low as those
now charged, and which though they are unquestionably low, are still
believed to yield the companies a considerable profit.... It seems to
me, indeed, that the transmission of news to the press throughout the
United Kingdom should be regarded as a matter of national importance
and that the charge of such transmission should include no greater
margin of profit than would suffice to make the service fairly
self-supporting."[102]
Thereupon the newspaper proprietors demanded: "That the maximum rate
for the transmission of telegraphic messages [for newspapers] should
not exceed that which is now paid by each individual proprietor [as a
subscriber to the companies' press bureau], which is, for transmission,
exclusive of the cost of collection, 4 cents per 100 words."[103] This
demand assumed that the companies' charge of 8 cents per 100 words was
remunerative; that it was made up of two separable parts: a charge for
transmission, and a charge for collecting and editing; and that the
charge ascribed to transmission still would remain remunerative even
after the charge ascribed to collecting and editing had been withdrawn.
Upon none of these several points were the officers of the telegraph
companies asked to testify, the statements of the newspaper proprietors
being allowed to stand unsupported.
[Sidenote: _Mr. Scudamore yields to the newspapers_]
In order to insure the payment of an average sum of 4 cents or 5 cents
per 100 words, the newspaper proprietors proposed that messages be
transmitted for the newspapers "at rates not exceeding 24 cents for
every 100 words transmitted at night, and at rates not exceeding 24
cents for every 75 words transmitted by day, to a single address, with
an additional charge of 4 cents for every 100 words, or for every 75
words, as the case may be, of the same telegram so transmitted to every
additional address." By way of compromise, Mr. Scudamore proposed a
charge of 24 cents for 75 words or 100 words for each separate town
to which each message might be sent, and the limitation of the 4 cent
copy rate to copies delivered by hand in the same town. Mr. Scudamore,
however, withdrew that proposal, and accepted the proposition of the
newspaper proprietors, which became the law. It is needless to add that
the opposition of the newspaper press to the Bill of 1868 would have
delayed the passage of that Bill even more than any opposition on the
part of the telegraph companies and railway companies could have done.
Indeed, it is probable, that the newspaper press could have defeated
the Bill.
In 1875 the Treasury appointed a "_Committee to investigate the Causes
of the Increased Cost of the Telegraphic Service since the Acquisition
of the Telegraphs by the State_." That committee consisted of three
prominent officers taken from the Post Office Department and other
departments of State. Upon the newspaper tariff fixed by the Act of
1868, the Committee reported: "The consequences of such a system must
be obvious to every one. Even at ordinary times the wires are always
largely occupied with press work, and at extraordinary times they
are absolutely flooded with this most unremunerative traffic, which
not only fills the wires unduly to the exclusion of better paying
matter, but necessitates a much larger staff than would be necessary
with a more reasonable system [of charges].[104] After very careful
consideration of these points, Mr. Weaver [one of the members of the
committee, and the former Secretary of the Electric and International
Telegraph Company], has no hesitation in expressing his opinion that
the principle of the stipulations of the tariff authorized by the
Telegraph Act, 1868, both as regards messages transmitted for the
public, and those forwarded for the press, is essentially unsound,
and has been the main cause of the large percentage of expenditure as
compared with the gross revenue. In order to provide for the prompt
and efficient transmission of the vast amount of matter produced
by such a system, a considerable extension of plant was necessary,
involving a large original cost, besides a regular yearly outlay for
maintenance and renewal, and not only so, but a large and constantly
increasing staff had to be provided to work lines, which, if taken
separately, would not be found to produce anything approaching to the
cost entailed for erecting, working, and maintaining them. It will be
obvious, therefore, that, unless a retrograde step be taken in order to
amend the principles upon which the stipulations of the tariff are made
up, it would be unreasonable to expect that the revenue derived for
telegraph messages under the present system can ever be made to cover
the expenses of working, the interest upon capital, and the ultimate
extinction of the debt."[105]
In May, 1876, Mr. C. H. B. Patey, Principal Clerk in the Post Office
Department, testified that the Post Office was losing $100,000 a
year by transmitting 220,000,000 words for the newspaper press at an
average price of 8 cents per 100 words. Mr. Patey said 180,000,000
words were being carried at the rate of 4 cents per 100 words, or
for $74,180 in the aggregate; and 40,000,000 were being transmitted
at the rate of 24 cents per 100 words, or, for $109,795 in the
aggregate.[106] Mr. Patey submitted no calculations in support of his
statement that there had been a loss of $100,000 on newspaper messages
yielding $183,975. But he cited two illustrations from Hull and the
Nottingham-Sheffield-Leeds-Bradford group of towns. He stated that
the Post Office received $1,600 a year for messages transmitted to
six newspapers in Hull, and spent $5,275 on the transmission of those
messages. He added that the service supplied to nineteen towns included
in the Nottingham-Sheffield-Leeds-Bradford group of towns yielded
$21,760, and cost the Post Office $38,270.[107]
In 1876, the Postmaster General, through Mr. S. A. Blackwood, Financial
Secretary to the Post Office,[108] asked the Select Committee on the
Post Office (Telegraph Department) to recommend to Parliament that the
tariff on newspaper press messages be made "24 cents for 75 words or
100 words for each separate town to which each message may be sent, and
that the 4 cent copy rate be limited to copies delivered by hand in
the same town." That, it will be remembered, was the proposal made and
withdrawn in 1868 by Mr. Scudamore. The Select Committee recommended
that the amount of the loss on the newspaper press messages be clearly
ascertained, and that the copy rates be raised sufficiently to cover
that loss. But Parliament failed to act on the recommendation.
Mr. Patey had supported Mr. Blackwood's request with the statement,
based upon inquiry of postmasters throughout the United Kingdom, that
"in a very large number of towns only a small part of the telegraphic
news transmitted was inserted in the newspapers. In many cases, on
inquiry of the proprietors, it was stated that it was not inserted
inasmuch as it was not of interest to the readers. In other cases,
because the amount of local news was more than would admit of the
special telegraphic news being inserted." Mr. Patey also had quoted
from a recent issue of the _Glasgow Herald_ the statement, that "there
was not a leading provincial paper in the Kingdom, the sub-editorial
room of which was not littered in the small hours of the morning ankle
deep with rejected telegraph flimsy;" and from a recent issue of the
_Freeman's Journal_: "The fact is, that the Post Office, and the
better class of papers as well, are both over-pressed with these cheap
duplicate telegrams. We suppose we pay for about ten times as many as
we print. Though we get them, and pay for them, so as to insure having
the best news from every quarter, we regard them rather as a nuisance,
and would be glad to have them reduced in quantity." And finally, Mr.
Patey had argued that the newspaper press was able to pay much more
than it did pay, "inasmuch as there had been a tendency on the part of
the papers generally, not confined only to the large papers," to get
their news by special messages prepared by their own agents and not
sent in duplicate to any extent.[109]
Before the _Select Committee on the Revenue Departments Estimates_,
1888, Mr. C. H. B. Patey, Third Secretary to the Post Office, stated:
"We believe that the tariff under which the press messages are sent in
this country causes a loss amounting to nearly $1,000,000 a year."[110]
In August, 1888, in the House of Commons, Mr. Cochrane-Baillie asked
the Postmaster General "whether in view of the _Report of the Committee
on the Revenue Departments Estimates_, he could state that the
Government would bring in further legislation to relieve the country
from the loss incurred by the present arrangement in connection with
press telegrams?" The Postmaster General replied that "he was quite in
accord with the Committee on Revenue Departments but he feared it would
be difficult to effect any change, since the newspaper press tariff was
fixed by the Act of 1868, and had been in force for upward of eighteen
years."[111]
[Sidenote: _Annual loss on Newspaper Messages estimated at $1,500,000_]
In November, 1893, Mr. Arnold Morley, Postmaster General, stated in
the House of Commons that "the best estimate that can be formed by the
officials at the Post Office points to the loss on the newspaper press
telegrams being at least $1,500,000 a year; and it probably is still
more."[112] In April, 1895, Mr. Arnold Morley, Postmaster General,
repeated the foregoing statement, and "maintained it in spite of
various statements to the contrary in the newspapers." He added: "and I
should be quite willing to arrange for an impartial investigation such
as is suggested by the Right Honorable Gentleman, if I were to receive
satisfactory assurances that the press would abide by the result of an
inquiry, and would undertake not to oppose the passage of the necessary
legislation for a corresponding revision in the charges, if it should
be shown that they are insufficient to provide for the cost of the
service."[113] The assurances were not forthcoming; and the newspaper
press tariff remained unchanged.
In April, 1900, Mr. R. W. Hanbury, Financial Secretary to the
Treasury, and representative in the House of Commons of the Postmaster
General, a member of the House of Lords, said: "The penny postage
realizes an enormous revenue and brings in a profit, but every other
part of the Post Office work is carried on at a loss. The whole profit
is on the penny letter."[114]
* * * * *
[Sidenote: _Betting on Horse Races subsidized_]
The Telegraph Act of 1868 provided that newspaper rates should be given
to "the proprietor or occupier of any news room, club, or exchange
room."[115] The clubs or exchange rooms in question are largely what
we should term "pool-rooms," places maintained for the purpose of
affording the public facilities for betting on horse races.[116] In
1876 Mr. Saunders, proprietor of the Central News Press Association,
testified that his association would send in the course of a day to the
same list of addressees the results of a number of races.
The words in the several messages might not aggregate 75 words, and
thus his association would be charged for the transmission of one
message only. In that way a number of messages would be transmitted
"gratuitously." Mr. Saunders added that, in 1875, the Post Office
had transmitted gratuitously for his association 446,000 sporting
messages. Mr. Patey, Third Clerk in the Post Office, added that while
the Post Office received 4 cents for transmitting from 8 to 10 sporting
messages, it had to make 8 to 10 separate deliveries, by messenger boy,
on account of those messages which were counted as one; and that each
such delivery cost the Post Office on an average two cents. Thus, on a
recent date, the Post Office had delivered the results of the Lichfield
races to 205 addressees by means of 1,640 separate deliveries, and had
received for the service, on an average, one-half a cent per separate
message.[117]
In January, 1876, the Post Office discontinued the "continuous
counting" of sporting messages.[118] It took the Department six years
to summon the courage to make this change whereby was effected some
diminution of the burden cast upon the general body of taxpayers for
the benefit of the sporting element among the voters of the United
Kingdom.
It would seem, however, that the practice of "continuous counting"
had been resumed at some subsequent date. For, in March, 1906, in
reply to a question from Mr. Sloan, M. P., the Postmaster General, Mr.
Sydney Buxton, said: "Clubs are, under section 16 of the Telegraph
Act of 1868, entitled to the benefit of the very low telegraph rates
accorded to press messages; and I have no power to discriminate against
a legitimate club because it is used for betting purposes. I propose
to consider whether the section ought not to be amended in certain
respects."[119]
On December 31, 1875, the Post Office discontinued entirely the
practice--voluntarily assumed--of transmitting sporting messages to
so-called hotels, in reality saloons. The waste of the public funds
that the Post Office had incurred in response to pressure from the
publicans, is illustrated in Mr. Patey's statement that the Post Office
had received from a certain Liverpool hotel $0.82 a week for messages
which had entailed a weekly expenditure of $2.50 for messenger service
alone.
FOOTNOTES:
[98] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876, J. E. Taylor, Proprietor of the _Manchester
Guardian_; q. 3,835 to 3,849, and 1,246; and C. H. B. Patey, Principal
Clerk in the Post Office Department; q. 3,452 and following, 3,845,
3,377, and 3,383; and _Report by Mr. Scudamore on the Re-organization
of the Telegraph System of the United Kingdom_, 1871, pp. 31 and 32.
[99] _Special Report from the Select Committee on the Electric
Telegraphs Bill_, 1868; Dr. Cameron, Editor and Manager of the _North
British Daily Mail_; q. 1,430 and following.
[100] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876, C. H. B. Patey, Principal Clerk in the Post Office
Department; q. 4,900 and 4,901.
[101] _Special Report from the Select Committee on the Electric
Telegraphs Bill_, 1868; J. E. Taylor, Proprietor of the _Manchester
Guardian_; Wm. Saunders, Proprietor of the _Western Morning News_;
Dr. Cameron, Proprietor of the _North British Daily Mail_; and F. D.
Finlay, Proprietor of the _Northern Whig_.
[102] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876; J. E. Taylor, Proprietor of the _Manchester
Guardian_; q. 3,854 to 3,862.
[103] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876; G. Harper, Editor _Huddersfield Chronicle_, and
representative of the Provincial Newspaper Society, which embraced
about 300 newspapers.
[104] Compare: _Report by Mr. Scudamore on the Re-organization of the
Telegraph System of the United Kingdom_, 1871, pp. 31 and 32.
Daily number of words transmitted for the newspapers:
Parliament Parliament
in session not in session
1868 6,000 4,000
1870 20,000 15,000
[105] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876; J. E. Taylor, Proprietor of the _Manchester
Guardian_; q. 3,854 and 3,900; and G. Harper, Editor _Huddersfield
Daily Chronicle_, and Representative of the Provincial Newspaper
Society; q. 4,157 to 4,162.
[106] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876; q. 5,057 to 5,074, 3,360, 3,377, 3,383, and 4,934
to 4,942; and Jno. Lovell, Manager of The Press Association; q. 3,979
to 3,986.
[107] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876; q. 5,122 to 5,129.
[108] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876; q. 5,278.
[109] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876; q. 3,385 and following, 4,926, 4,927, 3,371, and
3,372.
Receipts from messages sent to individual newspapers, and not
duplicated to any extent:
$
1870 29,000
1871 41,000
1872 60,000
1873 78,000
1874 85,000
1875 91,000
[110] Questions 2,007 and 2,167.
[111] _Hansard's Parliamentary Debates_, August 30, 1888, p. 305.
[112] _Hansard's Parliamentary Debates_, November 27, 1893, p. 1,789.
Compare also June 19, 1893, p. 1,316.
[113] _Hansard's Parliamentary Debates_, April 4, 1895, p. 919.
[114] _Hansard's Parliamentary Debates_, April 27, 1900, p. 136.
[115] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876; q. 3,360 to 3,370, 3,423, 4,917 to 4,923, and 5,147
to 5,149.
[116] _Report by Mr. Scudamore on the Re-organization of the Telegraph
System of the United Kingdom_, 1871, pp. 31 and 32; and _Report from
the Select Committee on Revenue Departments Estimates_, 1888; Mr. C. H.
B. Patey, Third Secretary to the Post Office, in Appendix No. 14.
=======+=======+========+============+===========+=============
| | News- | Newsrooms | Messages | Words
| Towns | papers | and Clubs | Delivered | Delivered
| | |(pool-rooms)| |
-------+-------+--------+------------+-----------+-------------
1869 | 144 | 173 | 133 | ? | ?
1871 | 365 | 467 | 639 | ? | 21,702,000
1881 | 326 | 525 | 278 | 2,735,042 | 327,707,400
1885 | 371 | 578 | 397 | 3,616,653 | 421,362,579
1887 | 286 | 499 | 289 | 4,289,986 | 481,796,400
=======+=======+========+============+===========+=============
[117] _Report from the Select Committee on the Post Office_ (_Telegraph
Department_), 1876; q. 4,047 to 4,051, 4,889, 4,890 and 3,343.
[118] _Parliamentary Paper_, No. 196, Session of 1877; Copy _of
the Regulations Relating to Press Telegraph Messages issued by the
Postmaster General_ in 1876.
[119] _Hansard's Parliamentary Debates_, March 12, 1906, p. 867.