The British State Telegraphs / A Study of the Problem of a Large Body of Civil Servants in a Democracy

by Hugo Richard Meyer

To indicate the manner in which the use of the telegraph increased with reductions in the charges made, Mr. Scudamore reported that in Belgium, in 1863, a reduction of 33 per cent. in the charge had been followed by an increase of 80 per cent. in the number of telegrams; and that, in 1866, a reduction of 50 per cent. in the charges had been followed by an increase of 85 per cent. in the traffic. In France, in 1862, a reduction of 35 per cent. in the charge, had led to an increase of 64 per cent. in the number of messages. In Switzerland, in 1868, a reduction of 50 per cent. in the charge had been followed, in the next three months, by an increase in business of 90 per cent. In Prussia, in 1867, a reduction of the charge by 33 per cent. had, in the first month, increased the number of messages by 70 per cent. The increase in business always had followed immediately, said Mr. Scudamore, showing that new classes of people took up the use of the telegraphs.

Finally, Mr. Scudamore stated that in 1866, the proportion borne by the total of telegrams sent to the aggregate of letters sent, had been: in Belgium, one telegram for every 37 letters; in Switzerland, one telegram for every 69 letters; and in the United Kingdom, one telegram for every 121 letters. The relative failure of the people of the United Kingdom to use the telegraph freely, Mr. Scudamore ascribed to the high charges made by the telegraph companies, and to the restricted facilities offered by the companies.

In 1868, the British companies were charging 24 cents for a twenty-word message, over distances not exceeding 100 miles; 36 cents for distances between 100 and 200 miles; and 48 cents for distances exceeding 200 miles. For messages passing between Great Britain and Ireland, the charge ranged from $0.72 to $1.44. In all cases the addresses of the sender and of the sendee were carried free.

Promise of Lower Charges and Better Service

The Government proposed to make a uniform charge of 24 cents for twenty words, irrespective of distance. Mr. Scudamore stated that he fully expected that in two or three years the Government would reduce its charge to 12 cents. The only reason why the Government did not propose to adopt immediately the last mentioned rate, was the desire not to overcrowd the telegraphs at the start before there had been the chance to learn with what volume of traffic the existing plant and staff could cope.[7]

In 1868 there was in the United Kingdom one telegraph office for every 13,000 people. The Government promised to inaugurate the nationalization of the telegraphs by giving one office for every 6,000 people.[8] In the shortest time possible, the Government would open a telegraph office at every money order issuing Post Office. At that time the practice was to establish a money order office wherever there was the prospect of two money orders being issued a day; and in some instances such offices were established on the prospect of one order a day.

The contention that the public interest demanded a great increase in the number of telegraph offices, Mr. Scudamore supported by citing the number of offices in Belgium and France. In the former country there were upward of 125 telegraph offices which despatched less than one telegram a day. In fact, some offices despatched less than one a month. The Belgium Government, in figuring the cost of the Telegraph Department, charged that Department nothing whatever for office rent, or for fire, light and office fittings; nor did it charge the smaller offices anything for the time given by the State Railway employees and the postal employees to the Telegraph Department. In France there were 301 telegraph offices that took in less than $40 a year; 179 offices that took in from $40 to $100; and 185 offices that took in from $100 to $200.

Mr. Scudamore over and again assured the Parliamentary Select Committee of 1868 that the telegraphs in the hands of the State would be self-supporting from the start, and that ultimately they would be a considerable source of revenue. But he supported his indictment of the telegraph companies of the United Kingdom by drawing upon the experience of the State telegraphs of Belgium, Switzerland, and France, under very low rates on inland telegrams, as distinguished from telegrams in transit, or telegrams to and from foreign countries. In taking that course, Mr. Scudamore ignored the fact that the inland rates in question were not remunerative.

Belgium’s Experience

The Belgium State telegraphs had been opened in 1850. In the years 1850 to 1856, they had earned, upon an average, 36.8 per cent. a year upon their cost. In the period 1857 to 1862, they had earned, upon an average, 24.3 per cent. In 1863 to 1865, the annual earnings fell to an average of 13.5 per cent.; and in 1866 to 1869, they reached an average of 2.8 per cent. only. The reasons for that rapid and steady decline of the net earnings were: the opening of relatively unprofitable lines and offices; increases in wages which the Government could not withhold; a slackening in the rate of growth of the profits on the so-called foreign messages and transit messages; and a rapid increase in the losses upon the inland messages, which were carried at low rates for the purpose of stimulating traffic.