UNFORTUNATE EFFECTS OF LOW RATES AND COMPETITION.
In 1849 the rate was reduced between New York and Boston to thirty cents, in 1850 to twenty cents, and in 1852 to ten cents. None of the lines, however, paid their working expenses from the time of their construction up to 1853. Even in 1848, when there was no opposition, the expenses exceeded the receipts by $1,199.00. One of the three lines was sold at public auction twice within three years after its construction, to pay the debts incurred in operating it. In 1853 two of the lines were united under one control, and an amicable arrangement entered into between the two remaining companies, by which the rates were advanced approximately to those of 1848, and they remained unchanged for the next ten years.
AMERICAN AND EUROPEAN RATES COMPARED.
In 1851, when the tariff between New York and Boston was twenty cents, the average French rate was $1.56, and the Belgian, for less than one third the distance, $1.56.
| In | 1852, | New York and Boston, | tariff, | 10 | cents. | |
| „ | French, average | „ | 2.25 | „ | ||
| „ | Prussian, „ | „ | 2.35 | „ | ||
| „ | Belgian, „ | „ | for less than one third the distance, | 1.21 | „ | |
| „ | Austrian, „ | „ | 1.55 | „ | ||
| 1866, | New York and Boston, | „ | .30 | „ | ||
| „ | French, average, | .83 | „ | |||
| „ | Prussian, „ | .65 | „ | |||
| „ | Belgian, „ | for less than one third the distance, | .25 | „ | ||
| „ | Austrian, „ | .46 | „ |
When the Belgian lines were opened to the public, an act of the legislature, dated March 15, 1851, established a charge of 2½ francs for a message of twenty words, if transmitted within a circle of 75 kilometres (i.e. 50 cents in gold for a distance of about 46½ miles), and five francs (one dollar gold) for any distance beyond the limit of 75 kilometres.
The increase from 52,050 messages in Belgium in 1853 to 1,128,005 in 1866 is, no doubt, in part justly attributable to the reduction of the prohibitory tariff of the former year, but it is not greater or more remarkable than the increase during the same period in America, where no reduction from the early rates has been made, and where, nevertheless, the business has improved year by year until it has grown into its present volume, exceeding that of any nation on the globe, on whatever basis the comparison be placed.
Belgium transmitted 14,025 messages in 1851 and 52,050 in 1853, being an increase of nearly 400 per cent in three years, although the tariff had been reduced less than 20 per cent. From 1853 to 1862 there was an increase of over 500 per cent, with a reduction of tariff of about 52 per cent. From 1862 to 1867 there was an increase of less than 400 per cent, although the average tariff had been reduced from 2.07 to 0.85 francs, or about 60 per cent.
Other suggestive illustrations are contained in the tables furnished by Mr. Washburne. Thus, in Switzerland, in 1853, at an average cost of 1.55 francs per message, the number sent was 82,586. In 1854, at an average cost of 1.62 francs, 129,167 were sent, showing an increase of 46,581 messages at a higher tariff. In 1855, when the cost per message was almost identical with that of 1853, the number had increased to 162,851, or about 100 per cent. In 1859, when the cost of messages was 1.48, as compared with 1.35 in 1858, the number had increased from 247,102 to 286,876, and in 1861, at the average charge of 1859, had increased from 286,876 to 333,933. In 1857 and 1862 the charges were exactly alike, yet the increase in the number of messages in the latter year was 113,288, or over 43 per cent over the former. The tables furnished by other countries show similar results. In Prussia, in 1852, 48,751 messages were sent at an average cost of 2.35, while in 1858, at a cost increased to 2.95, 247,292 messages were sent, or an increase of over 400 per cent.
The effect of the policies of the two nations thus shown to be so dissimilar are instructive.