CHAPTER X

THE TELEGRAPH SYSTEM AS A BRANCH OF THE POSTAL DEPARTMENT

Previous to the acquisition of the telegraphs by the state, the

different telegraphic companies carried on their business in comparative

harmony, a harmony which was occasionally disturbed by the entrance into

the field of competition of new claimants for the confidence of the

public. By far the most important of these companies in 1855 were the

Electric and International, and the British and Irish Magnetic,

controlling between them about 8500 miles of line and having 600

stations open to the public. During the succeeding ten years, by the

growth of the old companies and an increase in the number of the new,

the number of miles of line increased to 16,000, of telegraph stations

to 2040. The number of public messages sent in 1855 was a little more

than one million, in 1860 nearly two millions, and in 1865 over four

millions and a half. The rates for a message of twenty words varied from

1_s._ for a distance under fifty miles, plus 1_s._ for each additional

fifty miles, to 4_s._ for a distance over 150 miles and 5_s._ to Dublin,

including free delivery within half a mile from the telegraph

office.[797]

In 1860 a competing company, the London District Telegraph Company,

started operations in the Metropolitan District, and offered a low rate

of 6_d._ a message. In the following year a far more dangerous rival,

the United Kingdom Telegraph Company, announced that henceforth it would

charge a uniform shilling rate irrespective of distance. Four years

later both of these companies fell into line, forced according to some

by the unfair tactics of their competitors, according to others by the

utter impossibility of making both ends meet, while charging a uniform

rate irrespective of distance. The tariff agreed to in 1865 was as

follows:--[797] _Acc. & P._, 1867-68, xli, 202, pp. 43, 73, 74.

For a distance not exceeding 100 miles 1_s._

from 100 to 200 miles 1_s._ 6_d._

beyond 200 miles 2_s._

Between Great Britain and Ireland from 3_s._ to 6_s._

In some cases these rates applied only to wires of a single company,

and, where a message was transmitted over the wires of two or more

companies, an additional charge was made. Special rates were offered for

press messages, the news being supplied by the agency of the

intelligence department of the telegraph companies.[798]

[798] _Acc. & P._, 1867-68, xli, 202, pp. 87-88, 126; _Rep. Com._,

1867-68, xi, 435, pp. 31, 68.

The earliest proposal for government ownership of the telegraphs seems

to have originated with Thomas Allan, the same Allan who was later

instrumental in establishing the United Kingdom Telegraph Company. In

1854 he submitted arguments to the government through Sir Rowland Hill

in favour of the change, arguments which met with the approval of Lord

Stanley, the President of the Board of Trade, and Mr. Ricardo, formerly

Chairman of the International Electric Telegraph Company, and ex-member

for Stoke. Two years later Mr. Barnes, an official in the Post Office

Department, submitted to my Lords a plan "for the establishment in

connection with the Post Office of a comprehensive scheme of electric

telegraphs throughout the kingdom." In 1866, Lord Stanley, as

Postmaster-General, in a letter to the Lords of the Treasury called

their attention to the fact that the question of the propriety of the

assumption by the government of the telegraphic systems of the Kingdom

had been revived in the previous year by the Edinburgh Chamber of

Commerce, and still more recently the proposition had been embodied in a

petition from the Association of Chambers of Commerce of the United

Kingdom. As he himself had for many years been in favour of such a

change and found his opinion shared by more than one important body of

public men, he directed Mr. Scudamore[799] to report whether, in his

opinion, the telegraphs could be successfully operated by the Post

Office, whether such operation would result in any advantages to the

public over the present system by means of private companies, and

whether it would entail upon the department any large expenditure beyond

the purchase of existing rights.[800]

[799] Receiver and Accountant-General of the Post-Office.

[800] _Rep. Com._, 1867-68, xi, 435, p. 108; _Acc. & P._, 1867-68, xli,

202, p. 7.

The report presented by Mr. Scudamore was strongly in favour of the

control of the telegraphs by the Post Office, and is especially

interesting in furnishing an abstract of the evils which the people

considered that the companies were inflicting upon them. The most

important of these evils, real or imaginary, were as follows:--

Exorbitant charges and a resulting failure to expand on the part of the

system.

Delay and inaccuracy in the transmission of messages.

Failure to serve many important towns and communities.

Inconvenient situation, in many places, of the telegraph office, it

being often at a considerable distance from the business centre of the

town, especially when in the railway station.

Inconveniently short periods that offices are open in many places.

Wasteful competition between the companies.

The strongest argument against the existing condition was rather a

result of competition than private ownership. In the more populous

centres the companies very often had their telegraph offices at a very

short distance from each other, being so situated as to compete for the

public patronage, while other and more outlying portions of the town

were quite unserved. The latter were thus made to suffer in order that

favoured portions might enjoy the somewhat doubtful boon of competition.

In order to show the failure to extend telegraphic facilities, Mr.

Scudamore compiled a list of towns in England and Wales having an

individual population of two thousand or more. In his own words "So far

as telegraphic accommodation is concerned, while thirty per cent of the

whole number of places named ... are well served, forty per cent are

indifferently served, twelve per cent badly served, and eighteen per

cent, having an aggregate population of more than half a million

persons, not served at all." By combining the telegraphic business with

the postal service, there seemed every reason to suppose that its

advantages could be more widely extended, the hours of attendance

increased, charges reduced, and facilities given for the transmission of

money orders by telegraph.

Mr. Scudamore proposed to open telegraph offices in all places which had

a population of 2000 and upwards and which already had money-order

offices. All other post offices were empowered to receive telegrams,

which were to be sent by post to the nearest telegraph office for

transmission. The charge was to be made uniform at 1_s._ for twenty

words and 6_d._ for each additional ten words, or part thereof. He

judged that the whole of the property and rights of the telegraph

companies might be purchased for a sum within £2,400,000, and £100,000

more would have to be spent in the extension of the service. His

estimate for gross annual product was £676,000; annual charge, £81,250;

working expenses, £456,000; surplus, £138,750.[801] Finally, his reply

to Lord Stanley's question was in effect that the telegraph system might

be beneficially worked by the Post Office, that there would be

advantages thus obtained over any system of private ownership, and that

the Post Office would have to bear no expense not amply covered by the

revenue.[802] In fairness to Mr. Scudamore, it should be remembered that

his original low estimate of the probable cost of the telegraph

companies did not include Reuter's and other important companies. In

addition, the strict monopoly conferred in 1869, with the necessary

accompaniment of the purchase of all inland telegraph companies,

entirely upset his original estimates. Finally, the decision to include

the public telegraph business of the railways and the excessive price

paid to the railway and telegraph companies should not be forgotten in

contrasting the estimated price with that eventually paid for the

acquisition of the telegraph systems in the United Kingdom.[803] Mr.

Grimston, the Chairman of the Electric and International Telegraph

Company, contended that the extension of telegraphic facilities to any

considerable number of small towns and villages would involve a loss to

the state by greatly increasing working expenses, that village

postmasters and postmistresses were totally unable to work the

telegraphs, and that consolidation could be effected more advantageously

by the companies themselves.[804]

[801] In another place his estimate for gross revenue was £608,000;

annual charge £105,000 on a purchase price of £3,000,000 with expenses

for improvement; working expenses £425,000, and surplus £77,750 (_Acc. &

P._, 1867-68, xli, 202, pp. 145-47).

[802] _Ibid._, pp. 7-39.

[803] _Parl. Deb._, 3d ser., ccxxviii, col. 215; cxcii, coll. 747-751.

[804] _Acc. & P._, 1867-68, xli, 202, p. 131.

In 1868, the Postmaster-General was given authority by act of Parliament

to purchase the undertakings of the telegraph companies and also the

interests of the railways in the conveyance of public messages, together

with a perpetual way-leave for telegraphic purposes over the properties

of the railway companies. Any telegraph company, with the authority of

two thirds of the votes of its shareholders, was empowered to sell to

the Postmaster-General all or any portion of its undertaking. When the

Postmaster-General had acquired the property of any telegraph company,

he must also, upon the request of any other company, purchase its

undertaking, this privilege being extended also to the railways so far

as telegraphs operated by them for transmitting public messages were

concerned. The price paid for the Electric and International, the

British and Irish Magnetic, and the United Kingdom Telegraph Companies

was fixed at twenty years' purchase of their net profits for the year

ending 30th June, 1868. In the case of the United Kingdom Telegraph

Company additional sums were to be paid for the Hughes type-printing

patent, for the estimated aggregate value of its ordinary share capital

as determined by its highest quotation on any day between the 1st and

25th days of June, 1868, for compensation for the loss of prospective

profits on its ordinary shares, and any sum that might be determined as

loss for its attempt to establish a uniform shilling rate. Every officer

or clerk of the companies who had been in receipt of a salary for not

less than five years or of remuneration amounting to not less than £50 a

year for not less than seven years, if he received no offer from the

Postmaster-General of an appointment in the telegraphic department of

the Post Office equal in the opinion of an arbitrator to his former

position, was entitled to receive an annuity equal to two thirds of his

annual emolument if he had been in service twenty years, such annuity to

be diminished by one twentieth for every year less than twenty. Those

entering the service of the Postmaster-General were entitled to count

their past continuous years of service with the companies as years in

the service of the Crown.

For the most part all the telegraph apparatus belonging to the railway

companies and all belonging to the telegraph companies on the railway

lines necessary for the private business of the railways were handed

over to the railways by the Postmaster-General free of charge. He was

given the use, from telegraph stations not on the railway lines, of all

the wires of the telegraph companies on the lines employed exclusively

in the public telegraph business. The railways might affix wires to the

posts of the Postmaster-General on the line, and in like manner he might

require the railways to affix wires to their own posts for the use of

the Post Office or erect new posts and wires. Finally the railways were

required to act as agents of the Postmaster-General, if required, for

receiving and transmitting messages. The railways as a rule succeeded in

driving a very sharp bargain with the Government for the purchase of

their interests in the public telegraph business. The price paid was

twenty years' purchase of the net receipts from public telegrams

reckoned for the year ending 30th June, 1868, plus twenty times the

increase in net receipts for the three preceding years or for such

shorter period as the business of transmitting public telegrams had been

undertaken. In addition, compensation was made for the rents, etc.,

payable to the railways by the telegraph companies, for the unexpired

period of their respective agreements, for the right of way obtained by

the Postmaster-General over the lands of the railways, for the loss of

power on the part of the railways to grant way-leaves, for the value of

the railways' reversionary interests (if any) in the transmission of

public messages on the expiration of the agreements with the telegraph

companies, and for any loss the railways might suffer in working their

telegraph business as a separate concern. Finally the Postmaster-General

was required to convey free of charge to any part of the United Kingdom

all messages of the railways relating to their own private

business.[805] The act empowering the Postmaster-General to purchase the

undertakings of the telegraph companies did not confer upon the Post

Office a monopoly in the transmission of telegrams, Mr. Scudamore

himself declaring that such a monopoly was neither desirable nor did the

Post Office wish it. The second act, however, declared that no

telegraphic messages, except those sent from or to any place outside of

the United Kingdom, should be transmitted by any telegraphic company for

gain unless the company was in existence on the 22d of June, 1869, and

was not for the time being acquired by the Postmaster-General, who

should be required to purchase its undertaking upon demand.[806]

[805] 31 and 32 Vict., c. 110.

[806] 32 and 33 Vict., c. 75.

Mr. Scudamore's original estimate of the cost of acquisition of the

telegraphs fell far short of the final expenditure; although it must be

remembered that, when he proposed £2,500,000 as sufficient, he did not

anticipate items of expense which later vastly increased the cost.

Before the committee which reported in 1868 he advanced his original

estimate to £6,000,000, and in the following year to £6,750,000, of

which he considered about two thirds to be of the nature of good-will.

The telegraph companies when first approached asked for twenty-five

years' purchase of their prospective profits, and the Government offered

to buy at the highest price realized on the Stock Exchange up to the

25th of May, with an addition of from 10 to 15 per cent for compulsory

sale. The cost of the leading companies, based upon twenty years'

purchase of the net profits for the year ending 30th June, 1868, was as

follows: For the Electric and International, £2,933,826; for the British

and Irish Magnetic, £1,243,536; for Reuter's, £726,000; for the United

Kingdom Electric, £562,000; and for the Universal Private, £184,421,--a

total of £5,650,047. Separate bargains followed with many smaller

companies. The acts of 1868 and 1869 granted £8,000,000, for the purpose

of purchasing the undertakings of the companies and the interests of the

railways; £6,640,000 were spent in purchases, and £1,560,000 in renewals

and extensions between 1868 and 1872.[807] The claims for compensation

on the part of some of the railways were very excessive. The Lancashire

and Yorkshire Railway asked for £1,129,814, with interest, and £1 per

wire per mile a year for all wires erected upon its right of way by or

for the Post Office. By the terms of the award they obtained £169,197

and 1_s._ per mile per wire. The Great Eastern Railway presented a claim

for £412,608, with interest, and £1 per mile per wire. Their claim was

reduced to £73,315 and an annual payment of £200 for way-leave. In all,

the capital sum of £10,880,571 was expended by the Government,

necessitating an annual interest payment of £326,417, charged, not on

the Post Office vote, but on the Consolidated Fund.[808]

[807] _Rep. Com._, 1867-68, xi, 435, p. 162; 1868-69, vi, 348, p. 11;

1867-68, xi, 435, p. 217; 1873, xxxix, 316, pp. 762-64; 1873, vii, 290,

p. 95; _Parl. Deb._, 3d ser., cxcii, coll. 747-751, 1303-04. According

to figures furnished by Mr. Fowler in a speech in the House of Commons

in 1868, the value of the capital and the debentures of the Electric and

International at that time was £1,240,000 while the capital value of the

British and Irish Magnetic was £534,000; of Reuter's Company, £266,000;

of the United Kingdom Electric, £350,000, and of the London and

Provincial, £65,000 (_Parl. Deb._ 3d ser., cxcv, coll. 747-751).

[808] _Rep. P. G._, 1876, p. 10; _ibid._, 1883, p. 9.

When the Post Office acquired the telegraphs, a uniform rate was

introduced of 1_s._ for twenty words or part thereof and 3_d._ for each

additional five words or part thereof, exclusive of the names and

addresses of sender and receiver, which were transmitted free. Delivery

was free within a radius of one mile from the terminal telegraphic

office, or within the limit of the town postal delivery when it

contained a head office and the postal delivery extended more than a

mile from it. Beyond the above limits the charge did not exceed 6_d._

per double mile or part thereof. When special delivery was not required

beyond the free delivery, the message was sent free by the next ordinary

postal delivery. The newspapers succeeded in having incorporated within

the act a clause prohibiting a higher charge for press messages than

1_s._ for every one hundred words transmitted between 6 P.M. and 9 A.M.,

or 1_s._ for every seventy-five words between 9 A.M. and 6 P.M. when

sent to a single address, the charge for the transmission of the same

telegram to each additional address to be not greater than 2_d._[809] On

the day of transfer the Post Office was able to open about a thousand

postal telegraph offices and nineteen hundred offices at railway

stations where the railways dealt with the public messages as agents of

the Postmaster-General. On the 31st of March, 1872, the system comprised

more than five thousand offices (including nineteen hundred at railway

stations), twenty-two thousand miles of line, with an aggregate of

eighty-three thousand miles of wire, and more than six thousand

instruments. A decided increase in the number of messages was the

result. During the first year after the transfer there were nearly ten

millions of messages, the second year twelve millions, and the third

year fifteen millions, or more than double the number transmitted in

1869. The period from 1872 to the adoption of a sixpenny tariff in 1885

was one of steady progress. The number of new offices opened was not

numerous, the increase having been only one thousand, but the

improvements in existing connections were marked and the number of

messages transmitted had increased to thirty-three millions. The new

tariff rate was 6_d._ for twelve words or less, with a halfpenny for

each additional word, but the old system of free addresses was

abolished. Under the old tariff each figure was charged at a single

rate. Under the new schedule five figures were counted as one word. A

large proportion of telegrams were brought within the minimum sixpenny

rate, while the average charge, which had been 1_s._ 1_d._ in 1885, was

reduced to 8_d._ in 1886. The number of messages increased from

thirty-three millions in 1884-85 to fifty millions in 1886-87. Four

cables between France and England and one between France and the Jersey

Isles were purchased by the governments of the two countries, two by the

Belgian and English governments, two between Holland and England, and

one between Germany and England, by the governments of the countries

interested.[810]

[809] 31 and 32 Vict., c. 110.

Following the adoption of a uniform sixpenny rate the department has

granted other facilities to the public, which, though popular enough,

have undoubtedly tended to place the working of the telegraphs upon a

less secure financial basis. In 1889, the issue of telegraphic money

orders was begun as an experiment, and in the same year was extended to

all head and branch post offices in the United Kingdom.[811] Two years

later the Post Office ceased to require the repayment of the capital

outlay on telegraph extensions made under guarantee, and the rural

sanitary authorities were empowered to defray the cost of such

extensions in places within their districts.[812] For the six preceding

years the average annual number of guaranteed telegraph offices was

seventy-seven, and during the next five years the average annual number

increased to 167. As part of the Jubilee concessions in 1897, the

guarantors were required to pay only one half of the deficiency, with

the result that during the following two years the average annual number

of guaranteed telegraphic offices increased to 290. At the same time the

free delivery limit was extended to three miles and a reduction was

granted in the porterage charges beyond that distance. Finally, in 1905,

the guarantee was reduced to one third of the loss incurred, the

delivery charge being fixed at 3_d._ a mile for the distance beyond the

three-mile limit, instead of the distance from the office of

delivery.[813]

[810] _Rep. P. G._, 1895, app., pp. 33-35; 1889, p. 13.

[811] _Ibid._, 1890, p. 7.

[812] _Rep. P. G._, 1892, p. 20; 54 and 55 Vict., c. 46.

[813] _Rep. P. G._, 1900, p. 15; 1898, p. 19; 1906, pp. 1, 15.

In 1896, the main routes from London having become crowded, especially

by the telephone trunk lines, the principle of underground lines between

the most important centres was sanctioned by the department. London and

Birmingham were first connected, and the line was ultimately extended

through Stafford to Warrington, where it joined existing underground

wires between Manchester, Liverpool, and Chester. By 1905, underground

wires were laid as far north as Glasgow through Carlisle, to be extended

later to Edinburgh. At Manchester a junction was effected with a line

passing through Bradford to Leeds. During the same year underground

lines were completed from London to Chatham and from London westward

toward Bristol, with the intention of extending it into Cornwall in

order to secure communication with the Atlantic and Mediterranean

cables.[814]

[814] _Ibid._, 1900, p. 15; 1902, p. 13; 1905, app., p. 99; 1906, p. 16.

In 1875, England joined the other important European powers in a

telegraphic agreement which went into effect in January of the following

year. By this agreement each of the contracting parties agreed to devote

special wires to international service, government telegrams to have

precedence in transmission and to be forwarded in code if desired.

Private telegrams could also be sent in code between those countries

which allowed them, and the signatory powers agreed to pass them in

transit, but each country reserved to itself the privilege of stopping

any private telegram. For the purpose of making charges, any country

might be divided into not more than two zones, and each of the signatory

powers owed to the others an account of charges collected.[815] So far

as foreign telegrams were concerned, the use of manufactured expressions

in place of real words gave rise to considerable trouble in view of the

fact that such combinations were difficult to transmit. In 1879, the

languages which might be used for code words were reduced by common

consent to English, French, German, Italian, Spanish, Portuguese, Dutch,

and Latin. At the same time the use of proper names as code words was

prohibited. This did not remove the evil, as the roots of words in one

language with terminations in another were used. An official vocabulary

was compiled by the International Telegraph Bureau, to become obligatory

in 1898, but its publication in 1894 aroused considerable opposition, as

many of the words were dangerously alike, and in 1896 the decision of

the Paris Conference of 1890, by which the official vocabulary was to

become compulsory for European telegrams in 1898, was rescinded. It was

also decided that an enlarged vocabulary should be published by the

International Bureau, but, owing to the action of the English delegates,

the official vocabulary was not made compulsory at the meeting of the

International Telegraph Conference in 1903, although artificial words

were allowed if pronounceable in accordance with the usages of any one

of the eight languages from which the ordinary code words might be

selected. It was also decided to admit letter cipher at the rate of five

letters to a word, and several countries agreed to lower their charges

for the transmission of extra-European telegrams, the English delegates

contending that the rates for such telegrams should be made the same as

the rates for European telegrams.[816] In 1878, negotiations with the

German and Netherland Telegraph Administrations resulted in a charge of

4_d._ a word being fixed as the rate between the United Kingdom and

Germany and 3_d._ a word between the United Kingdom and the Netherlands.

[815] _Acc. & P._, 1876, lxxxiv [c. 1418], pp. 116-119.

[816] _Rep. P. G._, 1904, pp. 15-22.

In 1885, the following reductions in rates were announced:--

To Russia from 9_d._ to 6-1/2_d._ a word.

Spain 6_d._ 4-1/2_d._

Italy 5_d._ 4-1/2_d._

India 4_s._7_d._ 4_s._

to be followed six years later by still greater reductions:--

To Austria from 4-1/2_d._ to 3_d._ a word.

Hungary 4-1/2_d._ 3_d._

Italy 4-1/2_d._ 3_d._

Russia 6-1/2_d._ 5-1/2_d._

Portugal 5-1/2_d._ 4-1/2_d._

Sweden 5_d._ 4_d._

Spain 4-1/2_d._ 4_d._

Canary Isles 1_s._7-1/2_d._ 10_d._

the minimum charge for a telegram being 10_d._ in all cases. The

transmission of foreign money orders by telegraph was inaugurated in

1898 by the opening of an exchange with Germany and its extension

shortly afterward to the other important European countries.[817]

[817] _Rep. P. G._, 1897, pp. 40-42; 1879, p. 21; 1886, p. 10; 1892, p.

19; 1900, p. 10.

In 1892, an attempt was made, curiously suggestive of Marconi's

discovery, to transmit telegraph messages without a direct wire. The

experiment was conducted between the island of Flat Holm in the Bristol

Channel and the mainland, a distance of three miles. A wire was erected

on the mainland parallel with one on the island, and, by means of strong

vibratory currents sent through the former, signals were transmitted and

messages exchanged. Three years later and before the practical value of

the Flat Holm experiment had been substantiated, Mr. Marconi arrived in

England to submit his plans to the Post Office. A private wire from

Poldhu to Falmouth was provided for him on the usual rental terms, and

it was announced that the Post Office would act as his agent for

collecting messages to be transmitted by wireless telegraphy when he had

proved the feasibility of his project. At the international congress on

wireless telegraphy held in Berlin in 1903 it was recommended that shore

stations equipped with wireless apparatus should be bound to exchange

messages with ships at sea without regard to the system of wireless

telegraphy employed by the latter, that the rate of charge for the shore

station should be subject to the approval of the state where it was

situated, the rate of the ship to the approval of the state whose flag

it carried, and that the working of wireless stations should be

regulated so as to interfere with other stations as little as possible.

In order to enable the Government to carry out the decision of the

congress and to place wireless telegraphy under its control for

strategic purposes, an act was passed in 1904 making it illegal to

instal or work wireless telegraphic apparatus in the United Kingdom or

on board a British ship in territorial waters without the licence of the

Postmaster-General. The act was to be operative for two years only, but

before its expiration, was extended until the 31st of December, 1909,

before which it might again be renewed. Arrangements were also made for

the collection and delivery of the telegrams of the Marconi Company by

the post offices throughout the country. The company charges its usual

rate, 6_d._. a word, and the Post Office in addition charges the

ordinary inland rate.[818] The international agreement providing for

compulsory communication between shore stations and ships was signed in

1906 in spite of the protests of the Marconi Company, Sir Edward

Sassoon, and others, who contended that the agreement was unfair to the

company and a mistake on the part of the Kingdom, "which was thus giving

up advantages obtained by the possession of the best system of wireless

telegraphy in the world." The majority of the countries represented were

also in favour of compulsory communication between ship and ship, but

this was successfully negatived by Great Britain and Japan. In 1908, Mr.

Buxton was able to announce in the House that the relations between the

Post Office and the Marconi Company "are now of the most friendly kind,"

and that they have accepted and adopted the principle of

intercommunication. In the preceding year two experimental stations were

started by the Government which will enable the department to extend

its operations quite independently of the companies.[819]

[818] _Rep. P. G._, 1893, pp. 19-22; 1903, pp. 15-18; 1905, pp. 16-18; 4

Edw. VII, c. 24; 6 Edw. VII, c. 13.

[819] _Parl. Deb._, 4th ser., clxxix, coll. 841-858; cxcii, col. 1116,

London _Times_, 1906, Nov. 5, p. 5; 1907, July 1, p. 14.

From a financial point of view, government ownership and control of the

telegraphs in the United Kingdom has not been a success. In addition,

the Telegraph Department, for some time previous to 1874, had been

drawing upon the balance in the possession of the Post Office, a balance

which was required to be invested for other purposes and whose

expenditure for the use of the telegraphs had not been authorized by

Parliament. Mr. Goldsmid, in introducing a motion for the appointment of

a committee of enquiry, alluded to this error on the part of the

department, to the excessive price paid for the telegraphs, and

complained that the telegraph system was not being operated on a paying

basis. His motion was withdrawn, but an agreement was reached with the

department by the appointment of a committee, with Mr. Playfair as

chairman, "to inquire into the organization and financial system of the

Telegraph Department of the Post Office." The committee in their report

commented unfavourably upon the unnecessarily large force, the cumbrous

organization, and the far from economical management of some of the

divisions of the department, advised that an attempt be made to remedy

these faults, and that press messages be charged a minimum rate of 1_s._

each, and not at the rate of 1_s._ for each seventy-five or one hundred

words obtained by adding together separate messages requiring separate

transmission. This suggestion with reference to press messages was

adopted, promises were made at the same time to diminish the force, and

a scheme was submitted for the reorganization of the department.[820]

[820] _Parl. Deb._, 3d ser., ccxxviii, coll. 172 f.; _Rep. Com._, 1876,

xiii, 357, pp. i-xiii, 147, 240.

The number of telegrams for the year ending 31st March, 1887, the year

following the sixpenny reduction, was 50,243,639; for the year 1891-92

it had increased to 69,685,480. In 1896-97 the number was 79,423,556 and

in 1899-1900 the total was 90,415,123. During the next three years there

was a reduction, followed in 1902-03 by an increase to 92,471,000.

Since 1902-03 the number has again fallen off, the figures for 1906-07

being only 89,493,000.[821] It is rather difficult to make definite

statements about the telegraph finances on account of the lack of

uniformity in presenting the accounts since 1870. Under gross revenue is

now included the value of services done for other departments, but this

was not always the rule. The expenditure of other departments for the

telegraph service may or may not be included under ordinary telegraphic

expenditure. Net revenue may also be increased or a deficit changed to a

surplus by deducting the expenditure for sites, buildings, and

extensions from ordinary expenditure. Finally, the interest on capital

is not charged on the Telegraph Vote, and so is not included under

expenditure. In 1871, 1880, and 1881 there seem to have been surpluses

over all expenditure, including interest on capital. Excluding interest

from expenditure, the net revenue decreased from £303,457 in 1871 to

£59,732 in 1875, when the pensions to officials of the telegraph

companies were first charged to the Telegraph Vote. With an increased

net revenue of £245,116 in 1876, following the report of the committee

of investigation, the department did very well from a financial point of

view, until 1884, when the net revenue fell to £51,255, and in 1887

there was a deficit of £84,078, due to the fact that expenses were

increasing at a greater rate than receipts. The sixpenny reduction seems

to have made but little change in the financial situation, the gross

revenue increasing from £1,755,118 in 1884-85 to £1,855,686 in 1886-87,

the expenditure for the same years being £1,731,040 and £1,939,734. The

net revenue began to recover in 1888-89, and averaged about £150,000 a

year during the four years ending March 31, 1892. During the fiscal

years 1894 and 1895 there were deficits, then a slight recovery from

1896 to 1900 and a succession of deficits from 1901 to 1905. The

interest on stock, £214,500 in 1870, increased steadily to £326,417 in

1880, at which figure it remained until 1889, when a reduction in the

rate of interest from 3 per cent to 2-3/4 per cent lowered the amount

payable to £299,216. In 1903, there was a further reduction to

£278,483.[822]

[821] _Rep. P. G._, 1891, app., p. 40; 1901, app., p. 57; 1907, app., p.

61.

[822] _Ibid._, 1881, app., p. 53; 1891, app., p. 66; 1901, app., p. 83;

1905, app., p. 99.

The financial loss experienced by the Government in operating the

telegraphs has naturally produced considerable interest in this phase of

the question. Mr. Blackwood, the Financial Secretary of the Post Office,

in his evidence before the committee, considered that the financial

control and oversight of the department were inadequate and that the

department was over-manned. On the other hand, he was of the opinion

that many expenses were met by revenue expenditure which should have

been charged to capital. Mr. Baines, the Surveyor-General, among other

causes of the financial deficiency, called attention to the shorter

hours and longer annual leave of the telegraph staff as government

employees, the higher standard of efficiency established by the Post

Office, and the prevalence of much overtime work as a result of the

maintenance by the companies, just before the transfer, of an inadequate

staff.[823] The fact that the yearly increase in messages continued to

diminish after 1879 is commented on by the Postmaster-General in 1884 as

due to the stagnation of trade, the competition of the telephones, and

the rapidity of the letter post. Mr. Raikes called attention to the

large number of telegrams on the business of the railways which were

transmitted for nothing. By an agreement with several of the railway

companies to send, as a right instead of a privilege, a fixed number of

messages containing a fixed number of words, this increase was checked.

In 1892, the following comment is found in the Postmaster-General's

Report: "This stagnation of business, viewed in connection with an

increased cost in working expenses, is a matter for serious

consideration, and necessarily directs attention to that part of the

business which is conducted at a loss," the reference being to the

increased number of press messages transmitted at a nominal charge. When

in 1868 the newspaper proprietors succeeded in obtaining the insertion

in the Telegraph Act of special rates for the transmission of press

messages, no condition was laid down that copies, in order that they

might be sent at the very low charges there enumerated, should be

transmitted to the same place as the original telegram. The newspapers

combined to receive messages from news associations in identical terms,

and, by dividing the cost, obtained a rate equal on the average to 4-1/2

_d._ per hundred words. Under the arrangements adopted for the

transmission of news messages the number of words so sent did not

necessitate a corresponding amount of work, but it is an interesting

fact that in 1895 the number of words dealt with for the press formed

two fifths of the total number. In that year the loss on these telegrams

was estimated at about £300,000 a year. The high price paid as purchase

money is another of the factors to be considered, only in so far,

however, as the Telegraphic Department has failed to meet the interest

on the debt so incurred. The telegraph companies were very liberally

treated, and in certain cases excessive prices were undoubtedly paid.

Probably the most important reason for the financial failure of the

telegraphs under government ownership and control has been the influence

of forces productive of good in themselves, but quite different from

those which had previously been dominant when the telegraphs were under

private control and during the early years of government management. The

effect of these forces is clearly seen in the reduction of the tariff in

1885, the extension of facilities under inadequate guarantee, and the

increase in the pay of the staff.[824] Mr. Buxton is of the opinion that

the worst feature of the postal business is the telegraph service. "It

has never been profitable and now the telephone system has so largely

taken its place that the revenue is falling off," while the "Economist"

considers that "it is obvious that both in the Savings Bank and the

Telegraph branches reforms are urgently needed in order to place matters

on a sound financial basis."[825]

[823] Between 1870, when the telegraphs were taken over by the state,

and 1873, the number of employees was more than doubled, although,

during the same period, the number of messages--not including news

messages--increased only from ten to fifteen millions (_Rep. Com._,

1876, xiii, 357, pp. 18, 90, 232, 240).

[824] _Rep. P. G._, 1895, pp. 37-38.

The proportion of the amount spent on salaries and wages which in 1881,

before Mr. Fawcett's revision, stood at about 55 per cent, increased, as

a result of that revision and Mr. Raikes' revision in 1890, to about 65

per cent.

[825] _Parl. Deb._, 4th ser., clix, col. 389; _Economist_, Sept. 21,

1907, p. 1576.

The History of the British Post Office · 第 10 / 12 章