Previous to the acquisition of the telegraphs by the state, the different telegraphic companies carried on their business in comparative harmony, a harmony which was occasionally disturbed by the entrance into the field of competition of new claimants for the confidence of the public. By far the most important of these companies in 1855 were the Electric and International, and the British and Irish Magnetic, controlling between them about 8500 miles of line and having 600 stations open to the public. During the succeeding ten years, by the growth of the old companies and an increase in the number of the new, the number of miles of line increased to 16,000, of telegraph stations to 2040. The number of public messages sent in 1855 was a little more than one million, in 1860 nearly two millions, and in 1865 over four millions and a half. The rates for a message of twenty words varied from 1s. for a distance under fifty miles, plus 1s. for each additional fifty miles, to 4s. for a distance over 150 miles and 5s. to Dublin, including free delivery within half a mile from the telegraph office.[797]
In 1860 a competing company, the London District Telegraph Company, started operations in the Metropolitan District, and offered a low rate of 6d. a message. In the following year a far more dangerous rival, the United Kingdom Telegraph Company, announced that henceforth it would charge a uniform shilling rate irrespective of distance. Four years later both of these companies fell into line, forced according to some by the unfair tactics of their competitors, according to others by the utter impossibility of making both ends meet, while charging a uniform rate irrespective of distance. The tariff agreed to in 1865 was as follows:—
| For a distance | not exceeding 100 miles | 1s. |
| from 100 to 200 miles | 1s.6d. | |
| beyond 200 miles | 2s. | |
| Between Great Britain and Ireland from 3s. to 6s. | ||
In some cases these rates applied only to wires of a single company, and, where a message was transmitted over the wires of two or more companies, an additional charge was made. Special rates were offered for press messages, the news being supplied by the agency of the intelligence department of the telegraph companies.[798]
The earliest proposal for government ownership of the telegraphs seems to have originated with Thomas Allan, the same Allan who was later instrumental in establishing the United Kingdom Telegraph Company. In 1854 he submitted arguments to the government through Sir Rowland Hill in favour of the change, arguments which met with the approval of Lord Stanley, the President of the Board of Trade, and Mr. Ricardo, formerly Chairman of the International Electric Telegraph Company, and ex-member for Stoke. Two years later Mr. Barnes, an official in the Post Office Department, submitted to my Lords a plan "for the establishment in connection with the Post Office of a comprehensive scheme of electric telegraphs throughout the kingdom." In 1866, Lord Stanley, as Postmaster-General, in a letter to the Lords of the Treasury called their attention to the fact that the question of the propriety of the assumption by the government of the telegraphic systems of the Kingdom had been revived in the previous year by the Edinburgh Chamber of Commerce, and still more recently the proposition had been embodied in a petition from the Association of Chambers of Commerce of the United Kingdom. As he himself had for many years been in favour of such a change and found his opinion shared by more than one important body of public men, he directed Mr. Scudamore[799] to report whether, in his opinion, the telegraphs could be successfully operated by the Post Office, whether such operation would result in any advantages to the public over the present system by means of private companies, and whether it would entail upon the department any large expenditure beyond the purchase of existing rights. [800]
The report presented by Mr. Scudamore was strongly in favour of the control of the telegraphs by the Post Office, and is especially interesting in furnishing an abstract of the evils which the people considered that the companies were inflicting upon them. The most important of these evils, real or imaginary, were as follows:—
Exorbitant charges and a resulting failure to expand on the part of the system.
Delay and inaccuracy in the transmission of messages.
Failure to serve many important towns and communities.