THE BRITISH STATE TELEGRAPHS

Copyright, 1907

By THE MACMILLAN COMPANY

Set up and electrotyped. Published October 1907

THE MASON-HENRY PRESS
SYRACUSE, NEW YORK

TO MY BROTHER

PREFACE

In order to keep within reasonable limits the size of this volume, the author has been obliged to reserve for a separate volume the story of the Telephone in Great Britain. The series of books promised in the Preface to the author’s Municipal Ownership in Great Britain will, therefore, number not four, but five.

CONTENTS

• CHAPTER I
  Introduction

  Scope of the inquiry.

• CHAPTER II
  The Argument for the Nationalization of the Telegraphs

  The indictment of the telegraph companies. The argument from foreign experience. The promise of reduced tariffs and increased facilities. The alleged financial success of foreign State telegraphs: Belgium, Switzerland and France. The argument from English company experience.

• CHAPTER III
  The alleged Break-down of Laissez-faire

  Early history of telegraphy in Great Britain. The adequacy of private enterprise. Mr. Scudamore’s loose use of statistics. Mr. Scudamore’s test of adequacy of facilities. Telegraphic charges and growth of traffic in Great Britain. The alleged wastefulness of competition. The telegraph companies’ proposal.

• CHAPTER IV
  The Purchase of the Telegraphs

  Upon inadequate consideration the Disraeli Ministry estimates at $15,000,000 to $20,000,000 the cost of nationalization. Political expediency responsible for Government’s inadequate investigation. The Government raises its estimate to $30,000,000; adding that it could afford to pay $40,000,000 to $50,000,000. Mr. Goschen, M. P., and Mr. Leeman, M. P., warn the House of Commons against the Government’s estimates, which had been prepared by Mr. Scudamore. The Gladstone Ministry, relying on Mr. Scudamore, estimates at $3,500,000 the “reversionary rights” of the railway companies, for which rights the State ultimately paid $10,000,000 to $11,000,000.

• CHAPTER V
  None of Mr. Scudamore’s Financial Forecasts were Realized

  The completion of the telegraph system costs $8,500,000; Mr. Scudamore’s successive estimates had been respectively $1,000,000 and $1,500,000. Mr. Scudamore’s brilliant forecast of the increase of traffic under public ownership. Mr. Scudamore’s appalling blunder in predicting that the State telegraphs would be self-supporting. Operating expenses on the average exceed 92.5% of the gross earnings, in contrast to Mr. Scudamore’s estimate of 51% to 56%. The annual telegraph deficits aggregate 26.5% of the capital invested in the plant. The financial failure of the State telegraphs is not due to the large price paid to the telegraph companies and railway companies. The disillusionment of an eminent advocate of nationalization, Mr. W. Stanley Jevons.

• CHAPTER VI
  The Party Leaders ignore their Fear of an Organized Civil Service

  Mr. Disraeli, Chancellor of the Exchequer, opposes the enfranchisement of the civil servants. Mr. Gladstone, Leader of the Opposition, assents to enfranchisement, but expresses grave apprehensions of evil results.

• CHAPTER VII
  The House of Commons is Responsible for the Financial Failure of the State Telegraphs

  Sir S. Northcote, Chancellor of the Exchequer in Mr. Disraeli’s Ministry of 1874 to 1880, is disillusioned. The State telegraphs become self-supporting in 1879-80. The House of Commons, under the leadership of Dr. Cameron, M. P., for Glasgow, overrides the Ministry and cuts the tariff almost in two. In 1890-91 the State telegraphs would again have become self-supporting, had not the House of Commons, under pressure from the civil service unions, increased wages and salaries. The necessity of making money is the only effective incentive to sound management.

• CHAPTER VIII
  The State Telegraphs Subsidize the Newspaper Press

  Why the newspaper press demanded nationalization. Mr. Scudamore gives the newspaper press a tariff which he deems unprofitable. Estimates of the loss involved in transmitting press messages, made by responsible persons in the period from 1876 to 1900. The State telegraphs subsidize betting on horse