THE STATE TELEGRAPHS.
WE lost about twopence a head last year on the Post-Office Telegraphs, and the Treasury is in despair, and through a Committee puts forward proposals for materially increasing the price of telegrams. The Committee has two plans for restoring the balance between income and expenditure, and is kind enough to allow us a choice between them ; which, besides being very good of it, is also a little odd, inasmuch as on the one we should be charged about half-a-crown, while on the other we should be charged only eighteenpence, for the service which at present can be had for a shilling. The dif- ference between the two proposed rates of charge seems con- siderable enough to indicate that the Committee's view as to what is necessary is somewhat vague, and it is plain that even taking the rate least unfavourable to the public, the remedy would be worse to bear than the disease. Any one of us who sends a single telegram of the ordinary length per year—and every person is free to do that —would have to pay for it an additional amount much ex- ceeding his share of the loss which now falls on the Exchequer, and the additional cost would in a multitude of cases induce people to deny themselves the use of the Telegraph, and put up with the delay of the penny post. It is a pity there is any loss on the Telegraphs, and it is clear that not only is there a loss, but that it has been growing in mag- nitude year by year, until last year it attained to the amount of £268,000,—nearly the whole amount of the interest on the capital sunk in the Telegraphs ; but though this is more than the three-hundredth part of our national expendi- ture, things must be worse still before the public can be per- suaded that even the more moderate increase of price proposed must be put up with. The Committee implies, if it does not distinctly say, that the management of the Telegraphs by the Post Office has been a failure ; but we are greatly mistaken if, notwithstanding the deficit which exists, the public is not more than content with it. We can find a telegraph office far more easily than we could do six years ago—the number of offices having in that interval been nearly trebled—we can send messages to a much greater number of places, and they are much more quickly and surely delivered ; and on the price of a single message any one can save, probably several times over, his share of the loss which falls upon the public. We are consequently using the Telegraph three or four times as much as we did in the time of the Companies, and besides that it has to a great extent superseded the Post Office in matters of business, it is ministering in endless ways to our satisfaction and convenience. Such being the facts, it is idle to talk of failure merely because at present the greater part of the interest of the Telegraph capital has to be borne by the Exchequer,—few parts of the public expenditure are more pro- ductive of benefit to the public. Of course the Treasury plans have been published simply to see how the public will take them. It may be said at once that the public will not take kindly to them at all, that it will require a much stronger case to be made out than has yet been presented, and that it will be disposed to think the Treasury blameworthy for the course it has adopted. The Treasury should have given itself the trouble of conferring seriously with the Post Office to see what economies were possible, to ascertain whether and to what extent the rate of growth of the Telegraph expenditure could be checked ; and this it plainly has not done. It has been content with the simpler process of suggesting a large in- crease of price, and the manner in which the suggestion has been made is by no means satisfactory. The Treasury Com- mittee talks of "Parliament and the Public" as it might do of natural enemies, and one avowed object of the proposed in- crease of price is to diminish the use of the telegraph by the public, or at any rate, to prevent it from increasing.
That it will be necessary to raise the price of telegrams, if it should prove that the new business which, with the present rate of charge, is steadily coming, can only be done at a loss, may be admitted, but it is premature to say that this is the case, and the probabilities are the other way. The figures brought out by the Committee have an ugly look, but it may be possible to mitigate the force of them ; and a correspondent of the Times, who seems to represent the Telegraph Department, asserts that they can be, to a great extent, explained away. Whether, with the present charges, we can reasonably look for a surplus large enough to pay the interest of the Telegraph capital is a matter of little importance, but even a public departinent can- not go on working below prime cost, if the loss made be at all considerable, and especially if it grows even faster than the ever-growing business which is done. The Telegraphs are not yet worked below prime cost, but last year the surplus of profit, which three years before was about £160,000, fell to £36,000, and if the proportion of expenditure to in- come must go on increasing as it has been doing, a loss would have to be reckoned upon even in the present year. The Treasury Committee have assumed—while themselves pointing out various ways in which a considerable reduction of expenditure may be obtained—that it must go on increasing, but this conclusion is unsupported, and they have made no allowance for the circumstances in which the Telegraph De- partment has hitherto been placed. The Department has scarcely yet settled down into a normal state. It has hitherto been occupied in creating a vast machinery for the service of the public, and in striving to make it efficient and complete it has unavoidably given money considerations a secondary place. It has multiplied telegraph offices in the towns, it has established telegraph offices in rem ote villages where they do not earn enough to be self-supporting, it has grasped at every new improvement in telegraphy, and it has done the immense amount of work it has done in haste, and therefore at great ex- pense. For two or three years it was unable to give any account of the expense, and the apportionment of it between capital and income has been made, it may be believed, in a very rough way. It is alleged on its behalf that it has been insufficiently supplied with capital, that it " has had to lead a kind of from hand-to-mouth existence, grabbing any stray capital it could lay hold of, and stopping up holes here and holes there with dabs taken at random out of revenue." It obviously will require a very searching investigation, as well as a somewhat longer experience, to say what profit or loss a department in such a state may be expected to make. And as regards the relation between the income and the expenditure, properly so called, whatever it may be, it is not shown by the balance of profit which appears on the face of the accounts. The policy of the Treasury has recently been to throw all sorts of charges that might fairly be put to capital account upon the yearly expen- diture, and though, as a policy, this is right, it makes the profit appear much lower than it really is, and the risk of future loss proportionally greater. The Treasury properly de- sires to keep the capital as low as possible, and to have profits out of which to pay it off as soon as possible ; but though these are excellent objects, the public will not, on account of them consent to rates of charge which would cut it off from half the uses it is making of the Telegraphs. It must be satisfied that apart from them, the Telegraphs are threatening to become a heavy burden, and it is idle to assert that this has been made out. The Treasury Committee has pointed out means of reducing the expenditure ; the Department, now that it is getting to be as other departments, may be trusted to find out other means ; stern economy will have its turn, and we shall be much surprised if it turn out that the future increase of busi- ness must needs involve a loss. As to the management of the Telegraphs, up to this time it certainly has been as good, even financially, as could reasonably have been looked for. It has not been carried on as a speculation, or as a means of revenue, but as a State service, the first object of which is the convenience of the public, and it remains to be shown that the assumption on which it has been carried on—that thorough efficiency is compatible with pecuniary success—has not, on the whole, been justified.
It would be easier to replace the shilling telegram by a six- penny one, which people have long been looking for, than by any novel mode of charging ; but if a change disadvantageous to the public must be made, the "word system" of charging, which the Treasury Committee has recommended—though the rate of a penny per word, inclusive of addresses, which itproposes, is preposterously high—has a good deal to be said for it. It is in use on the Atlantic cables, and has worked satisfactorily, and it is fairer than the charge by averages which is made at present. It involves that the addresses should be paid for—directly paid for, that is, for though the Committee, in its somewhat reck- less way, speaks of them as " unpaid matter," they are un- doubtedly paid for at present—and at a halfpenny per word, it would, on the average, add extremely little to the cost of messages while dimishing it in many cases, and it would increase the profits of the Department. People constantly wish to send short messages, and they send longer messages than they need do, simply because they pay no more than if they were shorter ; and on short messages at a halfpenny per word the sender would make a saving, while the De- partment would lose little or nothing. A message of twenty words would, on the other hand, with the addresses, cost about threepence more than it does at present, and this would be so much gain to the Department, while the public would probably not object to this, in consideration of the cheap- ness of short messages. Perhaps this may be the best solution of the difficulties which have frightened the Treasury. The charge of a penny per word would be prohibitory, and might make things worse for the Treasury, instead of better; while it would throw the public, as regards telegraphic facilities, back nearly to where it was six years ago.
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