Читать книгу The British State Telegraphs - Hugo Richard Meyer - Страница 6
ОглавлениеArgument from Foreign Experience
Mr. Scudamore supported his position with the subjoined reports from countries in which the State operated the telegraphs. The Danish Government had reported that the telegraph was used by merchants generally and for social and domestic purposes. Prussia had reported that in the early days, when the charges had been high, the use of the telegraph had been confined almost exclusively to bankers, brokers, large commercial houses and newspaper correspondents, but that with each reduction in the charges, or extension of the telegraphs to small towns, the number of those who regularly sent out and received messages had increased considerably. Switzerland had reported that messages relating to personal business and family affairs formed as important a part of the whole traffic as the messages of banking interests and other trading interests.
France had reported that 38 per cent. of the messages related to personal business and family affairs; and Belgium had reported that nearly 59 per cent. of the messages related to personal business and family affairs.
To indicate the manner in which the use of the telegraph increased with reductions in the charges made, Mr. Scudamore reported that in Belgium, in 1863, a reduction of 33 per cent. in the charge had been followed by an increase of 80 per cent. in the number of telegrams; and that, in 1866, a reduction of 50 per cent. in the charges had been followed by an increase of 85 per cent. in the traffic. In France, in 1862, a reduction of 35 per cent. in the charge, had led to an increase of 64 per cent. in the number of messages. In Switzerland, in 1868, a reduction of 50 per cent. in the charge had been followed, in the next three months, by an increase in business of 90 per cent. In Prussia, in 1867, a reduction of the charge by 33 per cent. had, in the first month, increased the number of messages by 70 per cent. The increase in business always had followed immediately, said Mr. Scudamore, showing that new classes of people took up the use of the telegraphs.
Finally, Mr. Scudamore stated that in 1866, the proportion borne by the total of telegrams sent to the aggregate of letters sent, had been: in Belgium, one telegram for every 37 letters; in Switzerland, one telegram for every 69 letters; and in the United Kingdom, one telegram for every 121 letters. The relative failure of the people of the United Kingdom to use the telegraph freely, Mr. Scudamore ascribed to the high charges made by the telegraph companies, and to the restricted facilities offered by the companies.
In 1868, the British companies were charging 24 cents for a twenty-word message, over distances not exceeding 100 miles; 36 cents for distances between 100 and 200 miles; and 48 cents for distances exceeding 200 miles. For messages passing between Great Britain and Ireland, the charge ranged from $0.72 to $1.44. In all cases the addresses of the sender and of the sendee were carried free.
Promise of Lower Charges and Better Service
The Government proposed to make a uniform charge of 24 cents for twenty words, irrespective of distance. Mr. Scudamore stated that he fully expected that in two or three years the Government would reduce its charge to 12 cents. The only reason why the Government did not propose to adopt immediately the last mentioned rate, was the desire not to overcrowd the telegraphs at the start before there had been the chance to learn with what volume of traffic the existing plant and staff could cope.7
In 1868 there was in the United Kingdom one telegraph office for every 13,000 people. The Government promised to inaugurate the nationalization of the telegraphs by giving one office for every 6,000 people.8 In the shortest time possible, the Government would open a telegraph office at every money order issuing Post Office. At that time the practice was to establish a money order office wherever there was the prospect of two money orders being issued a day; and in some instances such offices were established on the prospect of one order a day.
The contention that the public interest demanded a great increase in the number of telegraph offices, Mr. Scudamore supported by citing the number of offices in Belgium and France. In the former country there were upward of 125 telegraph offices which despatched less than one telegram a day. In fact, some offices despatched less than one a month. The Belgium Government, in figuring the cost of the Telegraph Department, charged that Department nothing whatever for office rent, or for fire, light and office fittings; nor did it charge the smaller offices anything for the time given by the State Railway employees and the postal employees to the Telegraph Department. In France there were 301 telegraph offices that took in less than $40 a year; 179 offices that took in from $40 to $100; and 185 offices that took in from $100 to $200.
Mr. Scudamore over and again assured the Parliamentary Select Committee of 1868 that the telegraphs in the hands of the State would be self-supporting from the start, and that ultimately they would be a considerable source of revenue. But he supported his indictment of the telegraph companies of the United Kingdom by drawing upon the experience of the State telegraphs of Belgium, Switzerland, and France, under very low rates on inland telegrams, as distinguished from telegrams in transit, or telegrams to and from foreign countries. In taking that course, Mr. Scudamore ignored the fact that the inland rates in question were not remunerative.
Belgium’s Experience
The Belgium State telegraphs had been opened in 1850. In the years 1850 to 1856, they had earned, upon an average, 36.8 per cent. a year upon their cost. In the period 1857 to 1862, they had earned, upon an average, 24.3 per cent. In 1863 to 1865, the annual earnings fell to an average of 13.5 per cent.; and in 1866 to 1869, they reached an average of 2.8 per cent. only. The reasons for that rapid and steady decline of the net earnings were: the opening of relatively unprofitable lines and offices; increases in wages which the Government could not withhold; a slackening in the rate of growth of the profits on the so-called foreign messages and transit messages; and a rapid increase in the losses upon the inland messages, which were carried at low rates for the purpose of stimulating traffic.
At an early date the Belgium Government concluded that the first three of the four factors just enumerated were beyond the control of the State, and therefore permanent. It resolved, therefore, to attempt to neutralize them by developing the inland traffic to such proportions that it should become a source of profit, that traffic having been, up to that time, a source of loss. Accordingly, on January 1st, 1863, the Government lowered the charge on inland messages from 30 cents for 20 words, addresses included, to 20 cents. As that reduction did not prove sufficiently effective, the charge on inland messages was reduced, on December 1st, 1865, to 10 cents for 20 words. Under that reduction the loss incurred upon the inland messages rose from an annual average of $13,800 in 1863 to 1865, to an annual average of $59,500 in 1866 to 1869; and the average annual return upon the capital invested fell to 2.8 per cent. This evidence was before Mr. Scudamore when he argued from the experience of Belgium in favor of a uniform rate, irrespective of distance, of 24 cents for 20 words, not counting the addresses. Mr. Scudamore shared the opinion of the Belgium Government that the rate of 10 cents would so stimulate the traffic as to become very profitable. As a matter of fact, things went from bad to worse in Belgium, and for many years the Belgian State telegraphs failed to earn operating expenses.9
By way of explanation it should be added that the so-called transit messages and foreign messages were profitable for two reasons. In the first place, the Belgian Government kept high the rates on those messages. In the second place, those messages are carried much more cheaply than inland messages. The transit messages, say from Germany to England, have only to be retransmitted; they are not received across the counter, nor are they delivered across the counter and by messenger. The foreign messages are burdened with only one of the two foregoing relatively costly operations. In 1866 the Belgian Government stated that, if the cost to the Telegraph Department of a given number of words transmitted as a message in transit be represented by two, the corresponding cost of the same number of words received and transmitted as a foreign message would be represented by three, while the cost of the same number of words received and transmitted as an inland message would be represented by five.
Swiss Experience
The Swiss State telegraphs, the experience of which Mr. Scudamore also cited in support of his Report, were opened in 1852; and in the period from 1854 to 1866 they earned, on an average, 18 per cent. upon their cost. Throughout that period the average receipts per inland messages were 21 cents, and the average receipts per foreign message were 39 cents. In the year 1865 the average receipts per message were 21 cents for inland messages, and 30 cents for foreign and transit messages, which constituted 39 per cent. of the traffic. In the following year, 1866, the average receipts upon the inland traffic remained unchanged; while those upon the foreign and transit traffic, 43 per cent. of the total traffic, fell to 20 cents. This reduction of 33 per cent. in the average receipts upon the foreign and transit traffic, caused a decline of 45 per cent. in the total net receipts, and reduced the earnings upon the capital from 15.2 per cent. in 1865, to 7.5 per cent. in 1866.
Thus far the receipts from the inland messages had not covered the operating expenses incurred on account of those messages. The profits, which had been very large, had come from the foreign messages and messages in transit.10 The Government, alarmed at the decline in profits resulting from the fall in the average receipts per message in the foreign and transit traffic, resolved upon a special effort to stimulate the growth of the inland traffic. Accordingly, on January 1st, 1868, it lowered the rates on inland messages of 20 words, address counted, from 20 cents to 10 cents. The inland traffic immediately doubled; but the cost of handling it more than doubled. The increase in the traffic necessitated the stringing of additional wires, and the employment of more instruments, linemen, telegraphers and office clerks. At the same time the Government was obliged to concede all round increases of wages and salaries, in consequence of the general increase in the cost of living which accompanied the world-wide revival of trade ushered in by the discovery of gold in California and Australia, the introduction of steamships upon the high seas, and the building of railways in all parts of the world.
The inland messages increased by leaps and bounds from 397,289 in 1867 to 2,118,373 in 1876; and still the receipts from them did not cover the operating expenses. In 1874 and 1875, for example, those expenses averaged 14 cents per message. Accordingly, in 1877, the Government adopted a new scale of charges on inland messages, to wit: an initial charge of 6 cents per message, to which was added 0.5 cent for every word transmitted. The Government assumed that the average length of the inland messages would be 14 words; and that the average receipts per message would be 13 cents. It hoped soon to reduce the average cost per message below 13 cents, and hoped thus to make the inland traffic remunerative. But those expectations never were realized; and to this day the inland messages have been carried at a loss.11
French Experience
In 1861, the French State telegraphs reduced the rate for messages of 20 words, counting the address, to 20 cents for intradepartmental12 messages, and to 40 cents for interdepartmental messages. In 1866 the average receipts per message were: 38 cents on the inland traffic; $1.38 on the foreign traffic; and 55.8 cents on the traffic as a whole. With these average receipts per message, the earnings were $1,541,519; while the operating expenses were $1,796,692. In other words, the State telegraphs lost $255,173 on the working, besides failing to earn any interest on the capital invested in them, $4,760,000.
In making the foregoing statement, no allowance is made for the value of the messages sent “on public service,” messages for which the State would have been obliged to pay, had the telegraphs been owned or operated by companies. No such allowance can be made, because the several official French statements submitted by Mr. Scudamore as to the number of messages sent “on public service” applied to the years 1865 and 1867, years for which the operating expenses were not given. Furthermore, the messages sent on public service in 1865 and 1867 were so numerous as to indicate so loose a construction of the term “on public service” as to make the returns worthless for the purpose of determining the commercial value of the saving resulting to the State from the public ownership of the telegraphs. For 1865, the number of messages “on public service” was returned as 568,647, the equivalent of 23 per cent. of the number of messages sent by the public. For 1867, the number was returned as 168,999, the equivalent of 5.94 per cent. of the messages sent by the public. That those figures represented an unreasonable resource to the telegraph for the transaction of the State’s business, is proved by the fact that in the United Kingdom, in the period 1871 to 1890, the value of the messages sent “on public service” was equivalent to less than 2 per cent. of the sums paid by the public for the transmission of telegraphic messages. On the basis of any reasonable use of the telegraphs “on public service,” the financial results of the French State telegraphs would not have been altered materially. The deficit, in 1866, on account of operating expenses, $255,173, was sufficient to permit of the sending of 457,300 messages “on public service,” the equivalent of 16 per cent. of the messages sent by the public. It would be unreasonable to assume that the State could have need of such recourse to the telegraphs.
Summary of Foreign Experience
To sum up the evidence from Belgium, Switzerland, and France, submitted by Mr. Scudamore in 1866 to 1869: This evidence was that rates of 20 cents and 10 cents for 20 words, applied to inland messages, developed an enormous inland traffic, but that that traffic was unremunerative. So long as the rates on foreign messages and transit messages had remained very much higher than the rates on inland messages, the Belgian and Swiss State telegraphs had paid handsomely. But as soon as the latter rates had approached the level of the former rates, the net revenue had tumbled headlong; and there was, in 1868 and 1869, no certainty that it would not disappear entirely, or be reduced to such proportions as no longer to afford an adequate return upon the capital invested in the telegraphs. In the case of France, no evidence was presented that the State telegraphs ever had paid their way, though the prices obtained for the transmission of foreign messages and transit messages were between three and four times the returns obtained from the transmission of inland messages.
English Companies’ Experience
While the evidence from Belgium, Switzerland and France, presented by Mr. Scudamore, did not support the proposition of a low uniform rate, irrespective of distance, the evidence furnished by the experience of the telegraph companies of the United Kingdom pointed strongly to the conclusion that a uniform rate, irrespective of distance, of 24 cents for 20 words, addresses not counted, was not remunerative in the then state of efficiency of the telegraph. In this connection it must be borne in mind that at this time messages had to be retransmitted at intervals of 200 or 300 miles; and that, while the maximum distance a message could travel was only 160 miles in Belgium, and 200 miles in Switzerland, it was 600 miles in the United Kingdom.
In 1861 the telegraph business of the United Kingdom was in the hands of two companies which had been organized in 1846 and 1852 respectively: the Electric and International Telegraph Company, and the British and Irish Magnetic Telegraph Company. In that year, 1861, a new company, the United Kingdom Electric Telegraph Company, invaded the field with a uniform tariff, irrespective of distance, of 24 cents for 20 words, addresses free. The established companies had been charging 24 cents for distances up to 25 miles; 36 cents for distances up to 50 miles; 48 cents for distances up to 100 miles; 60 cents for distances up to 200 miles; 96 cents for distances up to 300 miles; and $1.20 for distances up to 400 miles.13
The United Kingdom Company began operations in 1861 with a trunk line between London, Birmingham, Manchester, Liverpool and intermediate and neighboring towns. Shortly afterward it opened a second trunk line from London to Northampton, Leicester, Nottingham, Sheffield, Barnsley, Wakefield, Leeds and Hull; and across through Bradford, Halifax, Rochdale, and Huddersfield to Manchester and Liverpool. Subsequently the company extended its line to Edinburgh and Glasgow, thus lengthening to upward of 500 miles, the distance over which messages were transmitted for 24 cents.14
In July 1865, the Board of Directors reported as follows to the stockholders: “The Directors much regret to state that, notwithstanding their earnest efforts to develop telegraphic communication so as to render the shilling [24 cent] rate remunerative, the company has been unable to earn a dividend. The system of the company consists of trunk lines almost exclusively embracing nearly all the main centres of business, telegraphically speaking, of the country. Seeing that the company was working under the greatest possible advantages, and that upward of four years had elapsed since the formation of the company without the payment of any dividend to the proprietary, the directors conceived that they would not be justified in continuing the shilling [24 cent] system, and arrangements were therefore agreed to for its alteration. The directors waited until the last moment before reluctantly adopting this step, but having sought publicity in every way, having persistently canvassed in every department of business, and having endeavored by personal solicitations of numerous active agents to attract trade, they at last saw themselves compelled to agree to a measure that was greatly antagonistic to their personal wishes, but absolutely essential for the well-being of the company, and requisite, as they believe, for the premanentpermanent interests of the telegraphing community.”
In 1865, the United Kingdom Telegraph Company joined with its competitors, the Electric and International Telegraph Company, and the British and Irish Magnetic Telegraph Company, in the following rates for 20 words, addresses free: 24 cents for distances up to 100 miles; 36 cents for distances between 100 and 200 miles; and 48 cents for distances beyond 200 miles.
In July, 1866, the directors of the United Kingdom Telegraph Company reported that in the last half-year “the company earned an amount of profit equal to 6 per cent. dividend over the whole of its share capital.”
When the United Kingdom Company had entered the field, in 1861, with the 24 cent rate, the old established companies, the Electric and International and the British and Irish Magnetic, had been compelled to adopt the 24 cent rate between all points reached by the United Kingdom Company. In February, 1863, the directors of the Electric and International Company reported that the 24 cent circuit between London, Liverpool, Manchester and Birmingham still was unremunerative. The company was losing money on every message transmitted, though the 24 cent rate had increased business to such an extent that the company had been obliged to add two wires to the circuit in question. Since the business done by means of the additional wires did not pay, the directors had charged the cost of those wires to operating expenses, not to capital account. The company did not care for the business, but could not refuse to take it. In July, 1865, the directors reported: “After a trial of four years, the experiment of a uniform shilling rate [on certain circuits] irrespective of distance, has not justified itself.”
The half yearly reports of the British and Irish Magnetic Company from 1862 to 1865 reported that “for any but very short distances,” the 24 cent tariff was “utterly unremunerative.” The effect of the rate was to absorb in unavoidable additional expenses a very large portion of the increase in revenue coming from the increase in business.
In 1859 the London District Telegraph Company was organized for the purpose of transmitting telegraph messages between points in Metropolitan London. In 1860 the company had 52 stations and 73.5 miles of line; and it carried 74,582 messages. In 1862 it had 84 offices and 103 miles of line, and it carried 243,849 messages. In 1865 the company reached its highest point, carrying 316,272 messages. The company at that time had 123 miles of line and 83 offices. The London District Telegraph Company began with a tariff of 8 cents for 10 words, and 12 cents for a message of 10 words with a reply message of 10 words. It soon changed its tariff to 12 cents for 15 words, experience having shown that 10 words was an insufficient allowance.15 Subsequently the company added porterage charges for delivery beyond a certain distance. In 1866, the company raised its tariff to 24 cents. The company never earned operating expenses; and in November, 1867, its shares, upon which $25 had been paid in, fluctuated between $3.75 and $6.25.16
Mr. Robert Grimston, Chairman of the Electric and International Telegraph Company, in 1868 commented as follows upon the experience of the London District Telegraph Company. “A very strong argument against the popular fancy that the introduction of a low rate of charge in towns and country districts would induce the shopkeepers and the lower classes to use the telegraph is furnished by the example of the London District Telegraph Company. A better or a wider field than the metropolitan for an illustration of this theory could not surely be furnished. The facts, however, being, that after several years of struggling existence, the tariff being first fixed at 8 cents, and then at 12 cents, the company has never paid its way.”
FOOTNOTES:
4 A Report to the Postmaster General upon Certain Proposals which have been made for transferring to the Post Office the Control and Management of the Electric Telegraphs throughout the United Kingdom, July, 1868; Supplementary Report to the Postmaster General upon the Proposal for transferring to the Post Office the Control and Management of the Electric Telegraphs, February, 1868; Special Report from the Select Committee on the Electric Telegraphs Bill, 1868; and Report from the Select Committee on the Telegraphic Bill, 1869.
Unless otherwise stated, all the material statements made in this chapter are taken from the foregoing official documents.
5 Hansard’s Parliamentary Debates, July 21, 1868, p. 1,603.
6 Special Report from the Select Committee on the Electric Telegraphs Bill, 1868; q. 2549 and 1581.
7 Special Report from the Select Committee on the Electric Telegraphs Bill, 1868; q. 2508; and Report from the Select Committee on the Telegraphic Bill, 1869; q. 346.
8 Report from the Select Committee on the Telegraphic Bill, 1869; q. 327; and Special Report from the Select Committee on the Electric Telegraphs Bill, 1868; q. 88.
9 Supplementary Report to the Postmaster General upon the Proposal for transferring to the Post Office the Control and Management of the Electric Telegraphs, 1868; and Sir James Anderson, in Journal of the Statistical Society, September, 1872.
| Belgian State Telegraphs | |||||||||
| Inland messages | Foreign Messages | Messages in transit | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Cost per message | Receipts per message | Loss per message | Cost per message | Receipts per message | Gain per message | Cost per message | Receipts per message | Gain per message | |
| Cents | |||||||||
| 1860 | 42.0 | 35.4 | 6.8 | 25.4 | 49.0 | 23.6 | 16.8 | 60.6 | 43.8 |
| 1861 | 38.4 | 35.0 | 3.4 | 23.0 | 44.8 | 21.8 | 15.4 | 57.0 | 41.6 |
| 1862 | 39.4 | 33.6 | 5.8 | 23.6 | 43.2 | 19.6 | 15.8 | 52.2 | 36.4 |
| 1863 | 30.0 | 22.4 | 7.6 | 18.0 | 34.0 | 16.0 | 12.0 | 38.0 | 26.0 |
| 1864 | 27.0 | 22.4 | 4.6 | 16.2 | 31.2 | 15.0 | 10.8 | 41.2 | 30.4 |
| 1865 | 25.4 | 20.8 | 4.6 | 15.2 | 27.0 | 11.8 | 10.2 | 40.4 | 30.2 |
| 1866 | 18.0 | 11.8 | 6.2 | 10.8 | 23.4 | 12.6 | 7.2 | 28.6 | 21.4 |
| 1867 | 18.2 | 11.6 | 6.6 | 11.0 | 24.0 | 13.0 | 7.2 | 29.2 | 22.0 |
| 1868 | 18.4 | 11.4 | 7.0 | 11.0 | 22.4 | 11.4 | 7.4 | 29.0 | 21.6 |
| 1869 | 17.2 | 10.8 | 6.4 | 10.2 | 21.2 | 11.0 | 6.8 | 29.0 | 22.2 |
10 Archiv für Post und Telegraphie, 1903, p. 577.
11 Archiv für Post und Telegraphie, 1903, p. 574.
12 For administrative purposes France is divided into so-called “Departments.”
13 Journal of the Statistical Society, March, 1881.
The Tariff of the Electric and International Co., for 20 words (addresses not counted after 1854), was as follows:
In 1840, and for some years after, the charge was 2 cents a mile for the first 50 miles; 1 cent a mile for the second 50 miles; and 5 cents for each mile beyond 100 miles.
In 1850 the maximum charge for 20 words was reduced to $2.40; early in 1851 it was reduced to $2.04; and in November, 1851, it was reduced to 60 cents for 100 miles, and $1.20 for distances beyond 100 miles.
| 1855 | 1862 | 1864 | 1865 | ||||
|---|---|---|---|---|---|---|---|
| Miles | $ | Miles | $ | Miles | $ | Miles | $ |
| 50 | 0.36 | 25 | 0.24 | 50 | 0.24 | ||
| 100 | 0.48 | 50 | 0.36 | ||||
| 150 | 0.72 | 100 | 0.48 | 100 | 0.48 | 100 | 0.24 |
| 151 and beyond | 0.96 | 200 | 0.60 | 200 | 0.60 | 100 to 200 | 0.36 |
| 300 | 0.96 | 300 and beyond | 0.72 | 200 and beyond | 0.36 | ||
| 400 and beyond | 1.20 | ||||||
| 1855 | 1865 | ||||||
| To Ireland, by marine cable | 1.20 | 0.72 to 0.96 |
In February, 1872, two years after the uniform rate of 24 cents, irrespective of distance, had been put in force by the Government, the Telegraph Department made a careful examination of 7,000 messages sent from the large cities to all parts of the United Kingdom. The average charge per message was found to be 27 cents; under the rates enforced by the telegraph companies in 1865, the average charge would have been 52 cents.—Report of the Postmaster General for 1872.
| United Kingdom Telegraph Co. | ||||
| Miles of line | Miles of wire | Number of offices | Number of messages | |
|---|---|---|---|---|
| 1861 | 305 | 1968 | 16 | 11,549 |
| 1862 | 372 | 2741 | 22 | 133,514 |
| 1863 | 831 | 5099 | 48 | 226,729 |
| 1864 | 1343 | 8096 | 100 | 518,651 |
| 1865 | 1672 | 9506 | 125 | 743,870 |
15 Journal of Statistical Society, March, 1881.
16 Miscellaneous Statistics for the United Kingdom, 1862, 1864, 1866 and 1868–9; Parliamentary Paper No. 416, Session of 1867–68; and Journal of the Statistical Society, March, 1881.
| London District Telegraph Co. | ||||
| Miles of line | Miles of wire | Number of offices | Number of messages | |
|---|---|---|---|---|
| 1860 | 73 | 335 | 52 | 74,582 |
| 1861 | 92 | 378 | 78 | 114,022 |
| 1862 | 103 | 401 | 84 | 243,849 |
| 1863 | 107 | 430 | 81 | 247,606 |
| 1864 | 115 | 454 | 80 | 308,032 |
| 1865 | 123 | 470 | 83 | 316,272 |
| 1866 | 150 | 495 | 80 | 214,496 |
| 1867 | 150 | 495 | 81 | 239,583 |
| 1868 | 163 | 82 |
