The Bill became law; and the 12 cent tariff went into effect on October 1, 1885, the close of the first half of the fiscal year 1885-86. The number of messages jumped from 33,000,000 to 50,000,000, while the net revenue dropped from $1,370,000 to $440,000. In the next three years, 1887-88 to 1889-90, the number of messages increased to 62,400,000, and the net revenue rose to $1,451,000, or within $431,000 of the interest on the capital invested, $62,748,000. In the following year, 1890-91, the messages continued to increase at the rate at which they had increased in the three preceding years, and the net revenue would once more have sufficed to pay the interest on the capital invested, had the operating expenses not been swollen by increases in wages and salaries granted under pressure brought by the telegraph employees upon the House of Commons. The raising of salaries and wages continued through the subsequent years; and in the thirteen years 1893-94 to 1905-06, the State telegraphs have earned the operating expenses in five years only.[97]
In 1888, the Select Committee on Revenue Departments Estimates reported as follows: “Your Committee are of the opinion that the reasons urged against treating the Post Office as a commercial business are not applicable in anything like the same degree to the Telegraph Department; and that the increasing annual deficit in the accounts of the latter cannot be viewed otherwise than with grave concern. Looking to the increasing costliness of the service as a whole, and to the constant pressure upon it of demands for increased and unprofitable expenditure, your committee deem it their duty to call attention to the fact that the Department of the Postmaster General, in all its branches, is a vast Government business, which is most likely to continue to be conducted satisfactorily, if it should also continue to be conducted with a view to profit [beyond the payment of interest on the debt outstanding], as one of the revenue yielding departments of the State. Excessive expenditure appears to your committee to be sooner or later inevitable in a great Government business which is not administered with a view to an ultimate profit to the State.”
Had the House of Commons permitted the successive Governments of the day to act upon the doctrine contained in the foregoing quotation, the State telegraphs would have been self-supporting ever since the year 1880-81. They would have paid the full interest upon the whole capital invested in them; in spite of the high prices paid to the telegraph companies and the railway companies for the sale of those companies’ plants and rights.
FOOTNOTES:
[73] Report from the Select Committee on Revenue Estimates, 1888; q. 2,396, Mr. C. H. B. Patey, Third Secretary to the Post Office.
[74] Report from the Select Committee on Revenue Estimates, 1888; q. 950, Sir S. A. Blackwood, Secretary to the Post Office.
[75] Hansard’s Parliamentary Debates, April 15, 1875, p. 1,025.
[76] Hansard’s Parliamentary Debates, August 4, 1887, p. 1,126, the Marquis of Salisbury, Prime Minister.
[77] Hansard’s Parliamentary Debates, August 31, 1893, p. 1,580, Mr. A. Morley, Postmaster General.