[CHAPTER II] The Argument for the Nationalization of
the Telegraphs
The indictment of the telegraph companies. The argument
from foreign experience. The promise of reduced tariffs
and increased facilities. The alleged financial success of
foreign State telegraphs: Belgium, Switzerland and France. The
argument from English company experience.
[CHAPTER III] The alleged Break-down of Laissez-faire
Early history of telegraphy in Great Britain. The
adequacy of private enterprise. Mr. Scudamore’s loose use of
statistics. Mr. Scudamore’s test of adequacy of facilities.
Telegraphic charges and growth of traffic in Great Britain.
The alleged wastefulness of competition. The telegraph
companies’ proposal.
Upon inadequate consideration the Disraeli Ministry
estimates at $15,000,000 to $20,000,000 the cost of
nationalization. Political expediency responsible for
Government’s inadequate investigation. The Government raises
its estimate to $30,000,000; adding that it could afford
to pay $40,000,000 to $50,000,000. Mr. Goschen, M. P., and
Mr. Leeman, M. P., warn the House of Commons against the
Government’s estimates, which had been prepared by Mr.
Scudamore. The Gladstone Ministry, relying on Mr. Scudamore,
estimates at $3,500,000 the “reversionary rights” of the
railway companies, for which rights the State ultimately paid
$10,000,000 to $11,000,000.
[CHAPTER V]
None of Mr. Scudamore’s Financial Forecasts were Realized
The completion of the telegraph system costs $8,500,000;
Mr. Scudamore’s successive estimates had been respectively
$1,000,000 and $1,500,000. Mr. Scudamore’s brilliant forecast
of the increase of traffic under public ownership. Mr.
Scudamore’s appalling blunder in predicting that the State
telegraphs would be self-supporting. Operating expenses on the
average exceed 92.5% of the gross earnings, in contrast to
Mr. Scudamore’s estimate of 51% to 56%. The annual telegraph
deficits aggregate 26.5% of the capital invested in the plant.
The financial failure of the State telegraphs is not due to
the large price paid to the telegraph companies and railway
companies. The disillusionment of an eminent advocate of
nationalization, Mr. W. Stanley Jevons.
[CHAPTER VI]
The Party Leaders ignore their Fear of an Organized Civil Service
Mr. Disraeli, Chancellor of the Exchequer, opposes the
enfranchisement of the civil servants. Mr. Gladstone, Leader
of the Opposition, assents to enfranchisement, but expresses
grave apprehensions of evil results.
[CHAPTER VII] The House of Commons is Responsible for
the Financial Failure of the State Telegraphs
Sir S. Northcote, Chancellor of the Exchequer in Mr.
Disraeli’s Ministry of 1874 to 1880, is disillusioned. The
State telegraphs become self-supporting in 1879-80. The House
of Commons, under the leadership of Dr. Cameron, M. P., for
Glasgow, overrides the Ministry and cuts the tariff almost in
two. In 1890-91 the State telegraphs would again have become
self-supporting, had not the House of Commons, under pressure
from the civil service unions, increased wages and salaries.
The necessity of making money is the only effective incentive
to sound management.
[CHAPTER VIII] 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.