The post office and its story

by Edward Bennett

Mr. William Preece, who was in after years knighted, and who was at the time Divisional Engineer to the General Post Office, exhibited at this same meeting Bell's telephone, which he had brought from the United States, and Graham Bell himself gave further illustrations.

Mr. Preece was at that time watching the progress of the telephone with a keen eye for the interests of the Post Office, but so also were business men who saw a profitable opening for private enterprise. To put the matter briefly, the instrument was at once captured by private speculators and exploited for all it was worth and a good deal more besides. The Telephone Company, Limited, was formed in 1878 to acquire Bell's patent, and in 1879 the Edison Telephone Company of London was formed. By this time it was being generally discussed whether these people were not poaching on the manor of the Postmaster-General. That official asked Parliament to insert a clause in a Telegraph Bill which was under discussion declaring that “the term 'telegraph' included any apparatus for transmitting messages or other communications with the aid of electricity, magnetism, or any like agency.” But Parliament has usually a very tender heart for the private speculator, and refused to agree to this proposal. It is a habit with many ill-informed people to blame the officials of the Post Office for not collaring the telephone from the first, but if there were any blame attached to them it must be shared by Parliament. There was possibly in official circles a little jealousy of this new rival to the telegraph: it must be remembered that State telegraphs were yet in their infancy, and officials were still at work organising the new system all over the country at great expense to the State. We have seen in a previous chapter that just at the time when the mail coach service had been magnificently organised, and vast sums of money had been spent on improving the roads, the steam engine upset all the calculations of the postal officials. Something of the same kind seemed to be likely to happen in the case of the telephone and telegraph. It is easy to be wise after the event, but the telegraph was still a new toy in the hands of the postal officials, and their strongest efforts were being directed to improve this branch of the service.

But if the Post Office was not over enthusiastic in its welcome of the new medium it was at any rate keen in the assertion of its own rights. When the Edison Company announced its intention to start telephone business in London the Postmaster-General at once instituted proceedings against the company for infringement of his monopoly rights under the Telegraph Act of 1869. This was a test action, and Mr. Justice Stephen, who was the judge, decided that the telephone was in the meaning of the Act a telegraph, and that telephone exchange business could not legally be carried out except by the Postmaster-General or with his consent. The decision covered also future inventions in regard to “every organised system of communication by means of wires according to any preconcerted system of signals.” This, it has been said, was the psychological moment when the Government might then and there have taken advantage of its position and have incorporated the telephone with the telegraph system. But Great Britain acts cautiously in these matters, and as I have said she has an intense respect for private enterprise. It is only when competition between rival companies obviously fails to meet the wants of the public that she consents to allow her Government to step in and do the work itself. It was characteristic of our nation that divided counsels should so long have been allowed to continue over the telephone business; it was characteristic of our officials also, that they were not prepared to launch out into any fresh expenditure of public money with the purchase of the telegraphs still weighing heavily on their consciences.

Public opinion would not have allowed the Post Office to act the dog in the manger over the business, even if it desired to do so, and it proceeded to grant licences to the telephone companies to work within certain areas. In 1883 the Post Office did in fact propose to engage in active competition with the companies, but the Treasury opposed the policy on the ground that the State should at most be ready to supplement and not to supersede private enterprise.

The various telephone companies united in 1889 under the name of the National Telephone Company, but their work was carried on under many restrictions. They were not allowed to lay wires underground, and for a long time they were not permitted to establish trunk lines. The Post Office was perhaps still inspired too much with the idea that it was a profit-making institution, and it was making a fight for the telegraph, with which the telephone was now in serious competition. Another opportunity for the Post Office to step in and buy out the companies happened in 1890, but it was not taken. But in 1892 the Post Office compelled the company to sell their trunk lines to the Government, leaving the local exchanges in the hands of the company. So things went on until 1898, when a Select Committee was appointed by Parliament to consider whether the telephone service is calculated to become of such general benefit as to justify its being undertaken by municipal and other local authorities, and if so, under what conditions. The decision of the Committee was that so long as the telephone service was not likely to become of general benefit the present practical monopoly in the hands of a private company should continue. The telephone, we see, was still considered only a luxury for the few, and although certain foreign countries were making great strides in the direction of a general use of the system, Parliament was not yet prepared to sacrifice the private speculator. The committee, however, recommended competition by the Post Office and local authorities, and in pursuance of this policy the Post Office in 1899 decided to establish a telephone system in London in competition with the company.

Thus began the first direct connection of the Post Office with the working of the telephone. But there is always something unsatisfactory and not in accord with the fitness of things when the State enters into competition with any of its members in business undertakings, and this attempt was certainly not advantageous to anybody. In 1901 the Post Office came to an agreement with the company in regard to the London business. The company agreed to free intercommunication between its subscribers and those of the Post Office, and undertook to charge rates identical with those fixed by the Department. The long struggle of the company to obtain permission to lay underground wires was settled by the Post Office agreeing to provide these wires for the company at a rental. Finally the Post Office undertook to buy out the National Telephone Company in the year 1911.

Briefly stated, this is the story of how the Post Office came to possess, as was already the case with the telegraph, the working of the telephone. Even now there are persons who are of opinion that although there should be one single authority to work the telephone, this should not be the Post Office. Let me submit a few considerations why I think the right policy has been adopted. The telephone has undoubtedly become a formidable competitor to the telegraph, and it is desirable, with a view to the economical adjustment of facilities, that both systems should be under one direction. In this case the one service becomes the natural complement to the other, and one or the other can be developed or reduced as circumstances demand. Moreover, there are hundreds of miles of underground pipes all over the country laid at an expense of a million and a half, and a single cable may contain from 100 to 200 wires used indiscriminately for telegraph and telephone services. Many thousands of miles of route are furnished with poles used for both services.

Then there is the familiar illustration of the post office existing in every village and town. What other authority would think of touching the unremunerative parts of the country, or would think it worth while to take up the business which the Post Office now undertakes as a matter of course? If the two services were separated all this plant and accommodation would have to be duplicated (or dropped) for telephones. All the work would have to be controlled by officials just as at present, with this difference, that they would be entirely free from the effects of popular criticism and control. Everybody claims the right to attack a Department of the State, and if their grievances are not attended to, the member of Parliament for their constituency can ask a question in the House of Commons. The Postmaster-General is considered fair game for attack by every telephone subscriber; far less satisfaction would be got out of a dispute with an official not directly responsible to Parliament.

A telephone subscriber, writing from the Junior Constitutional Club in reply to a pressing request for payment of subscription, wrote: “Anyhow, £5 is more easily paid than £8 at the present moment. I don't suppose the P.M.G. is quite so short for a day or two as I am.”

And in a further letter he said: “It would be an act of grace on the part of an exalted and powerful man like the P.M.G. to show clemency under the cruel circumstances and forego his rights.”