On the 5th of February, 1870, the Monopoly conferred upon the postmaster general, by the telegraph act of the previous year, took effect when the Post-Office assumed control of telegraph communication within the United Kingdom, and it then became possible to send telegrams throughout the country at a uniform charge irrespective of locality or distance.
The purchase money paid to the telegraph companies, compensation to railway companies for their interest in the telegraph business and the expense of new lines amounted to upwards of ten millions sterling.
On the day of the transfer a thousand post-offices and nineteen hundred railway stations were opened as telegraph offices. The public at once showed their appreciation of the change.
In the year 1869 but seven millions of telegrams passed on the companies wires; in 1870 the postmaster general transmitted ten millions.
In 1885 the sixpenny telegrams were introduced. The charge for a written telegram, which came into force in 1870, was one shilling for the first twenty words, and threepence for every additional five words, the addresses of sender and receiver being sent free.
In 1885 the charge was reduced to a half-penny a word throughout including addresses (a system of abbreviated addresses, which could be registered on payment of a guinea a year, was introduced), with a minimum charge of sixpence; the effect of this reduction was to run the number of telegrams in two years from thirty-three to fifty millions.
During the first six months the number of telegrams increased by 48 per cent., while the gross telegraph revenue fell off to the extent of £40,233 though £18,124 had been received in respect to abbreviated addresses.
In April, 1886, the telegrams in excess of 1885 amounted to 40 per cent., but the revenue was £11,800 less. In May the increase in telegrams was 51 per cent. and the revenue £4,100 less than the previous May.
In June the increase was 61 per cent. and the revenue £2,800 less. The working expenses were thus increased, while the receipts were diminished. In London alone the receipts fell off by as much as 74 per cent. The principal reasons for the unfavorable financial results of the working of the telegraph are: the large price £10,130,000 expended as purchase money, an argument of little weight so long as working expenses are not paid; the right accorded to railway companies at the time of the transfer of sending postal telegrams free of all charge. The number of these telegrams, at first insignificant, reached a total of 1,600,000 in 1891, with an average length of 25 words, representing a value of £80,000 a year. Arrangements were afterwards made under which the companies would surrender this privilege in return for permission to send a fixed number of free telegrams in the course of the year.
The loss on press telegrams, to quote the forty-first report of the postmaster general: “A still more serious burden is caused by the loss on press telegrams.”