Very little new capital was invested by the telegraph companies after 1865, because of “the very natural reluctance of the companies to extend the systems under their control so long as the proposal of the acquisition of those systems by the State was under consideration,” to use the words of Mr. Scudamore.
Adequate Results of Private Enterprise
The foregoing facts show that private enterprise was ready throughout the period beginning with 1838 to incur considerable risks in establishing the new industry of telegraphy, and in giving to the public facilities for the use of that industry. Private enterprise did not at any time adopt the policy of exploiting the public by confining itself to operations involving little or no risk, while paying well. It is true that once a company had reached the position of paying 5, 6, 7, 8, or more, per cent., it tried to maintain that position, and refrained from making extensions at such a rate as to cause a decrease in the dividend. But that fact does not warrant the charge that the companies neglected their duty to the public. Until the threat of purchase by the State arrested extensions, and the dividends rose unusually rapidly, the earnings of the companies were moderate; and finally, though the companies tried to maintain whatever rate of dividend had once been attained, the investing public never believed that even the Electric and International would maintain indefinitely the 10 per cent. rate. That is shown by the fact that until the public began to speculate on the strength of the prospect of the State paying a big price for the property of the Electric and International, the stock of that company never sold for more than 14 years’ purchase.[21] Had the public believed that the 10 per cent. dividend would be maintained indefinitely, the stock would have risen to 25 years’ purchase, the price of the best railway shares.
Mr. Scudamore’s Statistics
In order to show that the people of the United Kingdom suffered from a lack of telegraphic facilities, when compared with the people of Belgium and Switzerland, Mr. Scudamore stated in his reports of 1865 and 1866, that there were: in Belgium, 17.75 miles of telegraph line to every 100 square miles; in Switzerland, 13.7; and in the United Kingdom, 11.3. He stated, also, that there were in Belgium 6.33 telegraph offices to every 100,000 people; in Switzerland, 9.9; and in the United Kingdom, 5.6.
Mr. Scudamore obtained the figures with regard to the United Kingdom from the Board of Trade returns.[22] For 1865 to 1867, those returns were very incomplete; but in 1868 they became very full. Mr. Scudamore’s reports of 1865 and 1868 were not ordered, by the House of Commons, to be printed, until April, 1868, when the completed Board of Trade returns were available. But neither in the reports as laid before Parliament, nor in the testimony given before the Select Committee of Parliament in 1868, did Mr. Scudamore draw attention to the fact that the statement that the United Kingdom had only 11.3 miles of telegraph line to every 100 square miles of area, and 5.6 telegraph offices to every 100,000 people, was based on incomplete returns.
The Board of Trade return for 1868 stated that the Lancashire and Yorkshire Railway Company had 432 miles of telegraph lines and that various other companies not enumerated in 1865, had, in 1868, 3,665 miles of line. If it be assumed that in the period from 1865 to 1868 the Lancashire and the other railway companies not enumerated in 1865, increased their net at the same rate as did the three railway companies that were enumerated in 1865, namely, 11 per cent., there must have been, in 1865, not less than 3,825 miles of telegraph line of which Mr. Scudamore took no account in fixing the total mileage at 16,066 miles. If it be further assumed that one-third of the 3,825 miles in question paralleled telegraph lines of the telegraph companies, there were left out of account in 1865 by Mr. Scudamore 2,550 miles of telegraph line, the equivalent of 2.1 miles per 100 square miles of area. On the foregoing assumptions the mileage that should have been assigned to the United Kingdom in 1865 was not 11.3, but 13.4.
Considerations similar to the foregoing ones, when applied to Mr. Scudamore’s statement that there were, in 1865, 2,040 telegraph stations, show that there probably were 2,680 telegraph stations in 1865, a full allowance being made for duplication. The last named figure would have been equivalent to 8.9 telegraph offices for every 100,000 people as against 5.6 reported by Mr. Scudamore.
The foregoing corrections probably err in the direction of understating the telegraph facilities existent in the United Kingdom in 1865. These corrected results show that in the matter of telegraph line per 100 square miles of area, the United Kingdom was abreast of Switzerland in 1865, though considerably behind Belgium; and that, in the matter of telegraph offices per 100,000 people, it was almost abreast of Switzerland, and considerably in advance of Belgium.