HC Deb 29 March 1883 vol 277 cc995-1023
DR. CAMERON,

in rising to move— That the time has arrived when the minimum charge for Inland Postal Telegrams should he reduced to sixpence, said, that it was 13 years since the Telegraph Service of the country came into the hands of the Government. The number of telegrams which were then transmitted was some 6,000,000 per annum. Now, that number had risen to 31,000,000. The capacity of the mechanism of the Telegraph Companies, or of the Post Office, which now represented them, had meanwhile been enormously increased by various scientific discoveries. When the transfer was made, the instrument on which, practically, the whole of the work was done was the old Morse system, the capacity of which was comparatively limited. At the time of the transfer the Wheatstone system was introduced, which at one stroke trebled the working capacity of the old system; and since then the duplex telegraph had been discovered, which still further increased the capacity of the work of the telegraph wire. Now, very few people had any idea of the rate which telegrams could be transmitted by the Morse instrument, which had been so long in use. It was possible to transmit not far short of a Times column an hour with a single operator at each end of the wire. By means of the automatic instrument or duplex system that amount of matter could be very largely increased. The result of the change which had taken place by the transference of the Telegraph Department to the Post Office was very remarkable. Two great changes had occurred, increased facilities had been afforded, and the prices of telegrams, which up to the time of the change were not uniform, were, on the assumption of the wire by the Post Office, made uniform, the minimum charge being 0031s. The result of the reduction in price was very noteworthy. At the time of the transfer, as he had already mentioned, the number of telegrams transmitted annually was 6,000,000—that was in 1869. In the year 1871–2 the number had doubled itself, and 12,000,000 messages were transmitted. In 1873–4 the number received trebled to 18,000,000 messages. In 1878–9 the original number was quadrupled; and in the year 1881–2, which was the last year for which they had the Reports, five times the number of messages originally sent had been transmitted. That showed the immense effect which the reduction of the price had had in increasing the number of telegrams sent. But, as proving how very materially that increased facility had tended to the same end, he might quote the case of London. In London, at the time of the transfer, there were 6d. telegrams. The system was not very well elaborated, and the consequence was that it was not very much availed of. At the time of the transfer there were 60 offices in London. There were now, or there were two or three years ago, 400 offices, and the result of this increase of offices, even though accompanied by the doubling of the price, was that between 1869 and 1880 the number of messages transmitted in London increased 600 per cent. That was a very remarkable fact, and it would seem to show that the increased facilities had even more to do with the development of telegraphing than reduced prices. But the statistics he had given regarding the increase in the whole country showed how very stimulating an effect the reduction of price had upon the increase of telegraphic receipts. Now, he gave the Post Office every credit for the way in which it had fostered the telegraph business; and he was free at once to confess that in every respect, except in the matter of price, the Telegraph Service of Great Britain would bear favourable comparison with that of any other country; but in regard to the matter of price it was much too high. Belgium and Switzerland and other countries had half-a-franc telegrams; in Paris, the telegraphic system was supplemented by a system of pneumatic tubes, through which they could send messages called telegrams, though they might be more properly described as pneumatic post cards, without restriction as to the number of words, at a cost of half-a-franc or less. Last year the Postmaster General, in replying to a Motion similar to that which he was now making, stated that the number of messages per day sent from all the telegraph offices in this country was 80,000, and it appeared that the number of post offices from which they were sent was 5,600. Now, that would give an average only of 14 messages per day from each of the post offices. He would ask the House to remember that 25 messages per hour was a fair average amount of work for an ordinary telegraphist with a Morse instrument. The state of things which they now had, therefore, amounted to this—that from each telegraph office in this country was sent a number of messages which afforded little over half-an-hour's work per day for the operator. It would, therefore, at once be seen that there was ample room for increased business, without any very great increase of expenditure. On the same occasion, the right hon. Gentleman told them that the present charges wore virtually prohibitive, not only in the case of the working classes, but with the middle classes also. As a matter of fact, these charges had remained unchanged for 13 years. Now, those circumstances would, he thought, tend to explain the impatience for reform which had been manifested in many quarters. In July, 1880, a very influential deputation from the Society of Arts waited upon the Postmaster General for the purpose of bringing the subject under his notice. He had the advantage of the right hon. Gentleman's friendship before he earned his well-merited promotion to the Treasury Bench, and he had the advantage at that time of hearing from his lips speeches and doctrines of profound wisdom, from which he hoped he had benefited; and amongst the other doctrines which he taught in those days was that, having once brought influence to bear upon a Government and induced them to admit anything which was right, they should make a point of pinning them down to their admission. He wished to profit by the advice of the right hon. Gentleman, and to endeavour to pin down the Government, of which the right hon. Gentleman was a Mem- ber, to the admission of the propositions laid down by him. In his reply to the deputation to which he (Dr. Cameron) had referred, his right hon. Friend, in the first place, laid down two principles. He said— If the price charged for telegrams is not sufficient to make the Telegraph Service commercially remunerative, then the deficiency which will undoubtedly arise must he met out of the general taxation of the country. And then he went on to point out very fairly that any such proceeding would be a violation of the true principles of economy, as much as it would be a violation to encourage any particular trade by way of bounty. But, on the other hand, he said— If a price was charged for a telegram which is more than sufficient to make the Service commercially remunerative, then the difference between the two—the price which would make the Telegraph Service remunerative, and the price which is charged—is really so much taxation imposed upon the people, just as if the tax-gatherer stood over every sender of a telegram and levied a tax at the time when the telegram was sent. Now, he thought there were two very unjust principles which lay at the root of the whole matter. In reply to the deputation, his right hon. Friend discussed various propositions which had been made for giving increased facilities to the public, and he dismissed them for various reasons, with one exception. That exception which he proposed to make, and which, he said, the Post Office were quite ready to adopt, if the Treasury would only sanction it, was a system of 6d. telegrams based on this idea, that there was to be a modified word-rate system of telegrams. The right hon. Gentleman stated that almost entirely at the instigation and under the influence of England a word-rate telegram had been adopted in most of the countries throughout the world. Having pressed a word-rate system on other countries, it seemed only consistent that they should adopt it themselves. It would have a number of advantages. It would do away with a great amount of useless work which was now thrown upon the Telegraph Department in consequence of persons being allowed to send addresses to an unlimited extent. People constantly sent telegrams such as this example which he gave to the deputation— From Wm. Hy. Robinson to John James Smith, Something Street, such a town, such a district, such a country. I shall have the greatest possible pleasure in dining with you to-morrow; whereas he might have said— Robinson to Smith—Dine with you tomorrow. And the right hon. Gentleman pointed out to the deputation that a system of word-rates would get rid of all these superfluous words which the Post Office was not paid for at all. He pointed out, further, that the adoption of the word-rate would do away with an anomaly which existed—that a person could actually send a telegram from the remotest point of Ireland or Scotland to Brussels or Paris at a cheaper rate than such telegram could be sent from the House of Commons to the City, for by the Postal Convention the charge for telegrams to Belgium was 2d. per word, and to any part of France 2 ½d. A sender in Ireland or Scotland could send, therefore, a short telegram to Brussels for 8d.; whereas the minimum charge in London was 1s. His right hon. Friend proposed to adopt a modified word-rate, making a minimum charge of 6d., and for 6d. he proposed to allow 12 words, and to charge above 12 words a halfpenny per word extra. He had no doubt in his mind that that would have many advantages over the present system. That was the proposal which the Postmaster General expressed himself willing to adopt; and he thought as a practical man, believing it to be an improvement, it was not his present business to discuss whether that was the very best possible improvement; it was his business to urge its adoption upon the Government. The only point which his right hon. Friend's reply to the deputation left untouched and unsettled was the expediency of taxing telegrams. On that point his right hon. Friend pointed out very clearly that it was not the business of his Department to decide as to that. That was a question for the Chancellor of the Exchequer. He brought forward the Motion—and he did so last year—because he was absolutely opposed to the taxation of telegrams; and he believed that taxation could be levied in no other manner that would be so prejudicial to the commerce, intercourse, and convenience of the country. At the present moment there was practically no taxation of telegrams, or, at all events, the principle of the taxation of telegrams had not been affirmed. The surplus revenue earned up to the present time had been so small that it was impossible by sacrificing it to confer any substantial advantage upon the public. But the Telegraph Revenue was increasing; and it appeared to him that they had now arrived at a point where a remission of the taxation must be made in the shape of extra facilities for the public, or the vicious principle of the taxation of telegrams for the purpose of Revenue must be affirmed. They had, it might be contended, not yet arrived exactly at that point, but they were remarkably near it; and his object in bringing forward the Motion from year to year had been to afford the Government no excuse for allowing the point to be passed, but to bring up the subject every year; and the moment that it was admitted that a change could be made without loss to the general taxpayer, he should ask the House to indicate its opinion that that change might be made. The right hon. Gentleman, in reply to the deputation, said he considered it would be better to wait a year or two, and to make the change which he proposed in a complete manner, rather than to attempt anything piecemeal. Well, they had waited a year or two—they had waited three years—and he thought that fact alone justified them in bringing up the matter at the present time. Now, what was the financial position of the question? When the Committee upon Postal Telegrams satin 1876, Mr. Stevenson Blackwood, a very able officer of the Post Office—the Secretary, he believed, he was—proposed to draw up a statement of the receipts and expenditure of the Post Office on the same basis as if it were a commercial Company, and in such a manner as to show what dividend it would pay were it a commercial Company. Those statements had been drawn up yearly, and he held in his hand a number of statements ranging over the years from 1876 down to the 31st of March, 1881. Unfortunately, the statement for 1882 had not been issued; but he had the necessary and important figures in regard to 1882 from the speech of the Postmaster General in reply to his Motion last year. From these statistics it appeared that in 1876 the amount of Revenue derived by the Post Office for telegrams, after payment of all expenditure except the interest on borrowed capital, was £197,000. That, again, had increased in five years up to 1881 to £440,000. In other words, there was an increase at the rate of £50,000 a year. In 1882 the wages of the telegraph operators were increased by £80,000; and yet the profit of the Telegraph Department was £400,000. [Mr. FAWCETT: That is only an Estimate.] Unfortunately, the Return had not been issued; but that was the Estimate which the right hon. Gentleman made in June or July last. But in any case, if that Estimate were correct, it would show that the amount of increase in that year, putting aside the increase of wages, was £40,000, which was very similar to the average of previous years. Well, he presumed that the Revenue was increasing. It must be remembered that they had not now to deal with the financial year 1882–3. If any change were to take place it would come into operation in the financial year 1883–4; so that they had two years to add to the profits that had been already shown. He could not tell whether the profits had increased at the same rate for that year; but, making an allowance for the payment of the extra wages to the telegraphists, if they had so increased, the Revenue, including interest on the borrowed capital, should not be far short of £500,000 sterling. If they had not increased, then it appeared to him that they had now reached a point when the stimulating effect of the reduction to the uniform rate of 1s. had been exhausted, and when, on commercial principles, they should endeavour to stimulate the business by making further improvements in its management. Of course, he could not guarantee these figures. The right hon. Gentleman had not intimated whether they were correct or not; but they could not be very far off the mark. Now, the charge for interest on borrowed capital was £326,000 per annum. Making allowance for that, the result of the commercial balance sheets drawn up by Mr. Blackwood had been to show that after paying interest on borrowed capital the profits in 1880 amounted to £28,000 in addition, the interest amounting to £326,000; in 1881, the net profit was £144,000; in 1882, with an extra sum of £80,000 added in the shape of increased salaries, the net profit was £100,000. But assuming an increase of £40,000 for the year now ending, and assuming the increase given by the right hon. Gentleman last year to have been near the mark, the free profit this year should be £114,000; and for the year on which they were about to enter—namely, 1883–4—it should be £154,000. He had described the alteration which the right hon. Gentleman proposed and said the Post Office was prepared to adopt if the Treasury would sanction it. The cost of that alteration had been carefully made out by Mr. Patey, one of the most experienced and trusted officials of the Post Office; and his right hon. Friend told the deputation that that Estimate had been made out on the safe side as regarded the expenditure, and that Estimate showed that the change could be effected by a loss in the first year of £167,000 on the existing Revenue; but he believed that in consequence of the increase of salaries to the telegraphists the Postmaster General increased that sum by £10,000, and put the cost at £177,000. But it would be seen that if matters had been going on improving at the normal rate, so far as the Telegraph Revenue was concerned, they would, in the year 1883–4, have a free profit, after paying all charges for interest on borrowed capital, of somewhere about £160,000 or £170,000. In fact, there would be almost the amount required to make the change. There might be a difference of a few thousands; but, as the right hon. Gentleman told the deputation and the House last year, Mr. Patey's Estimate had been considered to err on the side of excessive caution. If they lost a few thousands this year, it must be remembered that the Treasury had been pocketing a free Revenue from the Postal Telegraph Service ever since 1880, for the profit between 1880 and 1882 had been about £216,000, and if that progress should have been maintained during the year ending the 31st of this month, it would amount to £330,000; and if his Estimate, which, of course, was purely hypothetical, and which was based on a continuance of the increase of Postal Telegraph Revenue at the average rate of preceding years, were maintained, by the end of 1884 the amount pocketed, in the shape of absolute profit on the Telegraph Service, should be between £480,000 and £500,000. The cost of the reduction for the first year was estimated at £177,000, and the Postmaster General told the deputation that in three or four years the loss to the Revenue would be entirely made up by the increased business. He (Dr. Cameron) thought it would be made up much sooner than in three or four years; and he pointed in proof of his contention to the stimulating effect which the adoption of the 1s. rate had had on the development of telegraphy in this country. He could not doubt that if they made the reduction to 6d. the same tendency would manifest itself. If they assumed Mr. Patey's figures to be correct, and that it would take three or four years to reach the same position with regard to the Revenue as now existed, they would have this remarkable effect, which demonstrated the fallacy of his Estimate—that if they allowed the increase per annum in profits to be as at present, the total loss would only extend to £480,000; while if it took place at the slower rate four and a-half years would suffice to place the Revenue where it was, and the total loss would be under £500,000. He maintained that before the end of the present year the Government would have pocketed a sufficient amount out of the free Revenue of the Telegraph Department to wipe off any loss which might occur from first to last—even assuming Mr. Patey's pessimist Estimate to be absolutely correct. His later figures had been avowedly based on the Estimates; but he did maintain that if their had not arrived at the particular point at which the change might be made and 6d. telegrams adopted, they were within a very short distance of it. The two or three years which the Postmaster General spoke of when he addressed the deputation had now passed. It must, therefore, be only a question of months when the point would be reached at which the Treasury could assent, if it chose, to the principles which the right hon. Gentleman laid down in his speech. He maintained that the principle of taxing telegraphy was most erroneous. It was one of the worst taxes on knowledge—a tax on economy, on time, and on the production of wealth. Instead of maintaining a price which was prohibitory not only to the working but to the middle classes, they ought to take every means in their power to encourage telegraphy. They ought to educate the rising generation to it; and he would suggest to the Government that the composing of telegrams would form a useful part of the education in our board schools. As the Select Committee of 1876 had pointed out, the Postal Telegraph system differed only from a commercial undertaking in this—that it was taken over by the State primarily for the convenience of the public, and that all increase of traffic which could be created without loss to the Revenue added to national value of the system. The right hon. Gentleman had before expressed his adhesion to the principle, and therefore he had confined himself to the one point. He had endeavoured to show that, if not in this year—1883–4—at least in the next, the point would be reached at which the reduction could be made without, in the smallest degree, encroaching on the national resources. They were now at the very turning point of the question; and he trusted that the House of Commons would at least lay down the principle that telegraphy should not be taxed. If the Chancellor of the Exchequer or the Postmaster General disputed his figures, he trusted that, at the earliest moment, at least the Chancellor of the Exchequer would be prepared to express his entire adhesion to the economic doctrine which his Colleague had laid down, and his hearty approval in principle of that great improvement in the Telegraphic Service of the country, for which the Postmaster General had told them his Department was perfectly prepared.

MR. PULESTON

seconded the Motion with great satisfaction, because it was a question, of all others, which demanded public attention. He knew the Postmaster General required no conversion on the point; but the question was, whether the Treasury were prepared to acquiesce in the proposed change? It by no means followed that the cheapening of telegraphy would reduce the Revenue; he thought experience showed that the reduction of the price of telegrams tended to greatly increase the business done. He knew that Mr. Pender's experience of the reduction of prices in cable telegrams was that it had resulted in an immediate loss to the revenue of the Company; but he believed it was the fact that in a short time after the reduction from 3s. a word to 1s. the revenue sprang up to what it was before the change. The proposed reform was one which was needed quite independently of the pounds, shillings, and pence part of the question. It was a reform which was needed in consonance with the other useful and practical reforms which had been inaugurated by the Postmaster General, and for which he received the grateful thanks of the community. If the minimum rate were reduced to 6d. half-a-dozen messages would be sent where one was despatched now, and the additional expenditure would be nothing like that in proportion; but even if the additional cost were fully up to the increase in business, still, in the public interest, this was a reform which ought to be accomplished. He considered that the estimate of Revenue was computed on an erroneous basis. It was true the capital of the original outlay was £10,500,000; but one-third, or at least one-fourth, of that amount ought to be written off. The interest on the whole amount was £325,000 a-year, which was considerably below the present net Revenue. A good deal was charged to Revenue that ought properly to be charged to capital. For instance, he understood that £30,000 was taken from Revenue for the building of a Post Office in Manchester, and the Revenue was hampered by charges of that kind. Another reason why the change should be made was found in the progress which was being made with telephones. It was the old custom to think that when gas came in there would be no more use for oil; that when the Underground Railway was built there would be no need for omnibuses, and so on. But experience had proved the folly of such ideas. In America, independently of the natural growth and increase of the telegraphic system, it was largely increased by and in consequence of the general use and adaptation of the telephone in that country, and he had no doubt the same result would be obtained here. Last year the Postmaster General suggested that a word rate might be adopted—namely, that 12 words should be sent for 6rf., and that one halfpenny should be charged for each additional word. If such a system were introduced, he thought, instead of charging one halfpenny for each word, the giving of three words for 1d. would be much more convenient and popular. On na- tional as well as on commercial grounds he hoped the proposal of his hon. Friend the Member for Glasgow would be adopted by the Government.

Amendment proposed, To leave out from the word "That" to the end of the Question, in order to add the words "the time has arrived when the minimum charge for Inland Postal Telegrams should he reduced to sixpence,"—(Dr. Cameron,) —instead thereof.

Question proposed, "That the words proposed to be left out stand part of the Question."

MR. CAUSTON

said, he agreed with the hon. Member for Glasgow (Dr. Cameron) that the time had now arrived when an alteration should be made in telegraphic charges; but he also thought there was another subject that should be brought before the attention of the Postmaster General—namely, the question of telephones. There was no doubt telephones were making rapid progress in this country, though not such a rapid progress as was being made in other countries. He would like to ask the Postmaster General if it was possible, under present arrangements, for private individuals to undertake telephone arrangements for the Metropolis? He understood that a satisfactory Telephonic Service could be supplied at the rate of 2d. per message, delivered at the houses. The idea would be to have stations at an interval of one-eighth of a mile; and if that were done a profit could be made. A further proposal would be that individuals might be allowed to enter these offices, and for the price of 1d. to send a message to anyone within the Metropolitan district. The hon. Member for Glasgow had suggested that telegraphic education should be introduced into our board schools; and certainly, when the system of telephonic communication had been extended, it would be necessary to teach the young people shorthand, so that they might be able to take down the messages as they were delivered. He thought, however, that the time had not quite arrived when this subject could be dealt with in a practical manner; but he threw out these remarks, in order that the Postmaster General might have the opportunity of stating what objection he entertained to the introduction of a system of telephonic messages.

SIR. HENRY PEEK

said, that the difficulty which the Postmaster General had to encounter in dealing with this subject was the extreme want of room, owing to the increase in every Department of the Postal Service. The letters had increased in one year 5¼ per cent; postcards, 10 per cent; packets, 12¾ per cent; newspapers, 5¼ per cent; registered letters, 8½ per cent. In 1872 the average number of letters for each individual in the United Kingdom was 28; whereas in 1882 the average had risen to 35. Last year the number of telegraphic messages was 81,345,861, which was an increase of 1,933,879 over the messages of the preceding year. It was a singular fact that, of all the telegraphic messages of the United Kingdom, five out of eight passed through St. Martin's-le-Grand. The Chief Office was so choked that it could do no move business; and he had it on good authority that the officials were worked under such unsatisfactory conditions that there was now a higher sick list than ever was known in the Department before. The Post Office was about to institute a Parcels Post, which he believed would develop into a most extensive business, and larger premises would be absolutely necessary for the efficient working of that and other Departments all crowded, and many at considerable distances apart. He suggested that acquiring the site of Christ's Hospital was the only way of meeting the increasing difficulties. Hon. Members were doubtless aware that a Royal Commission, consisting of Mr. Walpole, the late Recorder, Mr. W. E. Forster, the Dean of Christ-church, and Mr. Walter, had wound up an exhaustive Report with— For a thorough reform in the management and discipline of Christ's Hospital we think that its removal from London is indispensable. Consequently, the opportunity presented itself to the Chancellor of the Exchequer. Rive acres of land within 100 yards of St. Martin's-le-Grand—which was as nearly as possible the centre of the Metropolis—and within 700 yards of the Bank of England, were now to be had for £600,000, which he considered a reasonable sum. Let the Chancellor of the Exchequer do in this matter what the Earl of Beaconsfield had done in Egypt. The noble Earl bought the Suez Canal Shares for less than £4,000,000, and to-day on the market they could be sold for £9,000,000; while in 11 years' time, when entitled to full dividends, they would at present value be worth £21,000,000. Let the Chancellor of the Exchequer make up his mind and buy the five acres, which he would certainly find of the greatest service when the parcels business developed, as it certainly would if there was plenty of room for development. They must remember, too, that the Post Office ought not to be considered as a productive Department; it was intended, not to produce revenue, but to afford business facilities for the people generally. Last year, however, it produced a profit of £3,100,475, and the Chancellor of the Exchequer calmly proposed to look for a further increase of £200,000. The general convenience of the public was what the Post Office was intended to supply, and it ought not to be turned to any other purpose. He hoped the Government would put a bold front on the matter, and carry out the suggestion now made.

SIR BALDWYN LEIGHTON

objected to the idea that the Post Office ought not to be considered a Revenue-producing Department. It was said that it was a tax upon the industry and wealth of the country; but surely a tax on its wealth was legitimate, large numbers of telegrams being merely sent for purposes of private convenience. A change in the system of return telegrams might, however, be adopted with great advantage, and, in his opinion, with little or no loss to the Revenue, by charging 6d. instead of 1s. for the return message.

GENERAL SIR GEORGE BALFOUR

urged the Government to extend telegraphic communication to outlying parts of the country, whether the localities were, or were not, prepared to give a guarantee to the Post Office for the due collection of the Revenue; and he pointed out that three places in his county would be greatly benefited by such a service, for one of which a guarantee had already been given and the communication established; but the other two places had not yet been able to arrange the guarantee, and, consequently, the lines had not been put up. He complained that the cost of establishing telegraphic communication between the Shetland Islands and the mainland had not been borne by the Government. The lines were, however, to be supplied, but at the charge of the fees levied upon the fish-curers of herrings, so that £1,000 was this year paid to the Telegraph Department out of the funds derived from the brand fees obtained from herring brands. The telegraph ought to be extended for the benefit of the people; and, whether there was a loss upon a particular line or not, he thought it should be carried out at the cost of the Department. The convenience of the public should be mainly considered, and not the profit which the lines might yield. Indeed, the country should be kept well informed as to the places not yet put in telegraphic communication with the world.

MR. ALDERMAN W. LAWRENCE

believed that, instead of involving a loss to the Revenue, 6d. telegrams would result in a gain. He thought that when they were considering this question they ought to take into consideration the suggestion which he had made last year with regard to reply telegrams—that a telegram and a reply might be had for 1s. 6d. He would be quite willing to allow the return form to be only available within 48 hours of the despatch of the message, and to limit it to 10 words.

LORD JOHN MANNERS

said, the object at which the hon. Member for Glasgow (Dr. Cameron) aimed was one which every Member of this House would wish to see Carried out at the earliest possible opportunity; and he, for one, was pleased that he should have raised the question now. He had only one word to say as to the mode in which that object should be realized. He hoped the right hon. Gentleman his Successor (Mr. Fawcett)—whom they were all delighted to see in his place again—would not say he was prepared to grant a 6d. rate at the cost of abolishing free addresses. He was convinced that the abolition of that privilege would be a very great privation and injury to the very large body of the poorer classes of the people who now used the telegraph.

MR. FAWCETT

The wording of the Motion of my hon. Friend the Member for Glasgow is such that I feel some doubt whether I am the proper Minister to reply to it. My hon. Friend lays it down distinctly that the time has now come when the charge for telegrams should be reduced. The position I have always taken up since I have been Post- master General is, that the decision of that question, involving as it does a sacrifice of Revenue, does not depend upon the person who happens to be at the head of the Post Office, but must be determined by the Government, or by the Chancellor of the Exchequer, who is primarily responsible for the finances of the country. Some words were let fall by the Mover and Seconder of the Motion, which might lead to the conclusion that there was a conflict of opinion between the Treasury and myself on this question. I should be extremely sorry if such a conclusion were accepted by the House. What I did say, in reply to a deputation to which my hon. Friend referred—and I am delighted to be pinned to everything which I then said—was simply that, as far as those who administered the Post Office were concerned, nothing would give us greater pleasure than to be told by the Chancellor of the Exchequer, or by the Government, that the time had arrived when the financial position of the country was such that they could afford to sacrifice the temporary loss of Revenue which the reduction in the charge for telegrams would involve. Whether that time has come or not, it would be obvious to the House that that is a question that cannot be determined by me. But as I have devoted a considerable amount of attention to the question—knowing how keen and widespread is the interest felt in it throughout the country—I hope the House will not think I am trespassing unduly upon their time, if I lay before them some facts which will enable the House and the country, and, perhaps, the Government, to form an opinion in reference to it. It unfortunately happens, in opposition to the opinion expressed by the Seconder of the Motion, that seldom, if ever, can great postal or telegraph improvements be carried out without leading for a time to some loss of Revenue. This was even the case with the penny post. The success of the penny postage has been remarkable; but great as has been its financial success ultimately, and incalculable as have been the advantages which it conferred upon the community, it is a singular fact that more than 16 years elapsed before the penny postage yielded as large a net Revenue to the State as was yielded before it was introduced. And, although I believe that ultimately the Telegraph Revenue would recover the loss which would result from a reduction in the charge, yet I am bound to tell the House frankly what the loss is estimated at. If telegrams are to be reduced in price, it can be done in three different ways. As my hon. Friend the Member for Glasgow suggested, we may have a charge of one halfpenny a word, with a minimum charge of 6d., the address being charged for; or, secondly, as has been advocated by the noble Lord who preceded me in Office (Lord John Manners), we may continue to have the address free; and I would suggest that if that were done we should then have a minimum charge of 6d. for the first six words, with one halfpenny for every word beyond the six. There is no doubt much force in what the noble Lord has stated, and that the abolition of free addresses would bear most heavily upon the poor. A well-known man's address is generally a short one, and in many cases would be simply the name of the town in which he lives; whereas a poor person's address would often have to name the court and the street in which he lived. It would be found that the poor person's address was often several words longer than rich persons'; and, therefore, to charge for the address at one halfpenny per word would undoubtedly press somewhat heavily upon the poor. I believe it is the case that in no country except our own are free addresses allowed; but as the English people have been accustomed to them for 10 years, I am afraid they would feel their abolition a grievance. There is a third way, and a very simple way, in which the change might be carried out. You might give a free address, and then six words for 6d., 12 words for 9d., and 20 words for 1s. That would be a very simple plan. But, unfortunately, the costliness of these plans varies in proportion with their convenience. The first plan, charging one halfpenny per word for the address, is the least costly to the Department, but, I think, would be the least convenient. The second plan—a free address and a minimum charge of 6d.—is more convenient, but considerably more costly; and the third plan is the most costly of all. Therefore, we are reduced to a financial consideration; and the Government has to consider, when the change is adopted, what amount of Revenue are they prepared to sacrifice for the convenience of the public, and I will state what are the Estimates of the loss that would be involved; but I warn the House not to place too much confidence in these Estimates. They are the best we are able to obtain after great labour and difficulty, and I am sure they are sincere; but the House will see the difficulty of forecasting accurately the results of such reductions of charge. The problem depends upon three factors. In the first place, we have to estimate what will be the number of messages sent under a reduced tariff; and that, after all, is little more than guessing. Secondly, we have to consider, if a word rate is adopted, what will be the average yield of each message, or how many words on an average will be sent. Thirdly, we have to conclude what will be the cost of each message when the number of words is reduced. I have called to my assistance two of the ablest officials in the Post Office, who have had great experience of telegraphic work, and they have arrived at somewhat different conclusions as to the financial results. In order to be on the safe side, I will take the Estimate of the official who puts the loss at the maximum amount. He estimates that the loss in the Revenue, calculated on commercial principles, during the first year, if a rate of ½. per word were adopted, and if the address were charged for, would be, as stated by my hon. Friend, £177,000; but that loss would rapidly diminish, and in four years' time the telegraphs would yield as large a net Revenue under the reduced tariff as they are yielding at the present time. That is the most unfavourable Estimate. With regard to the second plan—free addresses and a charge of 6d. for the first six words—although I think that would be a more acceptable plan to the public, it would, unfortunately, be more costly; and the Estimates agree that the loss, if this plan were adopted, instead of being £177,000 in the first year, would be £150,000 more, or £320,000. That would reduce the present commercial revenue from telegraphs to the very small sum of £40,000. But in stating the advantages which belong to free addresses, and also admitting the disadvantages which would attach to charging for each word of the address, I think I am bound to point out a consideration of no small importance on the other side. There can be no doubt that the present plan is extremely waste- ful, as I can show by a very simple statement. Since I last addressed the House on this subject we have been at some pains to obtain Returns from all the Continental countries as to the number of words in their telegrams, and we have made a calculation of the average length of telegrams in our own country. "We arrived at this very striking result—that the average length of Continental telegrams, including the addresses, is 16 words; whereas the average length of our telegrams, including the addresses, is no less than 29 words, or about 80 per cent more. I cannot help thinking that the reason we have such a high average is that people often put in unnecessarily long addresses, and think that, as they have paid for 20 words, whether they need use them or not, they might as well take advantage of the full allowance. In many cases I believe that is done, and that often the only results are that the officials are given more trouble, whilst the telegram is made much less distinct, and more liable to mistakes than it otherwise would be. But I am anxious, before I sit down, to point out some of the advantages which I think would result from a reduction in the price of telegrams. In the first place, I cannot help thinking that there is great force in what was urged by my hon. Friend the Member for Glasgow, that considering we have, at the present time, 5,700 offices from which telegrams are sent, and 175 offices, in addition, at which business is carried on under a system of guarantee, only 80,000 telegrams, on an average, are sent each day, or 14 or 15 telegrams from each office, the business done is, after all, small. I cannot help thinking, too, as I said on a previous occasion, that 1s. is a prohibitory charge. It is, to a great extent, prohibitory to a considerable section of the middle and poorer classes. We know the great anxiety which prevails in cases of illness that friends should know the latest possible information about the patient's state, and the number of anxious inquiries that are made. We know, also, that poor people's feelings in such cases are the same as those of the rich; and if a poor woman in London has a daughter ill in Manchester she is naturally as anxious to be informed, with the same promptitude, of any change in her child's condition as would be the wealthiest in the land. When I re- member that this is only one instance of the extent to which the telegraph might be used if the charge were reduced, I cannot help coming to the conclusion that, when the day arrives on which the Government says we are in a position to be able to afford the sacrifice of Revenue which we are told will take place, that announcement will be received by the great majority of the country with satisfaction and with gratitude. There is another consideration, and that is, what would be the effect of cheaper telegrams upon our commercial interests? The telegraph is now a means of commercial communication. No inconsiderable portion of the business of the country is done by telegrams. English trade has had, during the last four or five years, many and increasing difficulties to contend with. We who keep absolutely, as I hope we always shall, to a strict policy of Free Trade, have constantly to face tariffs framed more and more in a hostile spirit against us; and I think it is no exaggeration to say that, taking a review of the past few years, English trade has had greater difficulties to contend with from the protective system which is maintained in other countries than it ever had formerly. This being the case, it seems to me of great importance—because when a struggle is keen and close a very small point makes a difference—that, as far as we can help it, English trade should be placed under no disadvantage. The fact is not to be denied that, comparing the minimum telegraph charge in England with other countries, and regarding the telegraph as an important means of commercial communication, our minimum charge is no less than 140 percent more than is the minimum charge in most Continental countries. We are actually in this position—that we can send a short telegram from any part of England to any part of Belgium for 8d., and from John o' Groats to any part of France for 10d. and yet, if we want to telegraph to a place only a few miles distant, or even from one part of London to another, we have to pay 50 per cent more than we should pay for a short telegram to Belgium, and 20 per cent more than we should pay for a short telegram to France. I cannot help admitting that this is a very striking anomaly. In order partly to meet it, it has been suggested that we should re- turn to the old system, and have two different rates of telegraph charges; that we should give up the principle of uniformity; that we should send a telegram, for instance, in London and in the large towns for 6d. I have made, to the best of [my ability, a calculation as to the financial result of that, and I find the saving would be so very trifling that it would only diminish the loss upon a general reduction by some £50,000 a-year. It seems to me it would be much to be regretted if the important principle of uniformity were infringed upon; and, as far as my opinion is concerned, I should not recommend any deviation from that principle. Again, the suggestion has been thrown out that a smaller charge should be made for a return telegram. I am perfectly willing to consider that subject; but it seems to me that, if we have 6d. telegrams at all, it is better not to do the thing by driblets, but to wait until we can have the change completely and effectually introduced. Now, I come to a part of the speech of the hon. Member for Glasgow, from which, unfortunately, I have considerably to differ. I should be very glad, indeed, if I could accept his hypothetical figures as the figures of the case. My hon. Friend correctly gives the commercial Revenue from telegrams in 1880–1 as £440,000; and he calculates that between 1876 and 1881 there has been an annual increase of £50,000 a-year in the commercial profits. He assumes that, as it were, by an irresistible law of nature, this increase has gone on; and, upon that hypothesis, he estimates the commercial Revenue of the Telegraph Department in the present year at over £500,000. [Dr. CAMERON: Under £500,000. I said £474,000.] Well, under £500,000; but, unfortunately, that increase, which had gone on steadily between 1876 and 1881, when the commercial profit of the telegraphs was £440,000, took an extraordinary drop between 1880–1 and 1881–2; and this drop, although I believe it will ultimately be recovered, has not yet been recovered. I will give my hon. Friend and the House the Revenue of the Telegraph Department, calculated on commercial principles, during the last three years; and my hon. Friend will at once see that this law of continuous growth does not, unfortunately, apply to the Telegraph Service. In 1880–1 the com- mercial profit upon the Telegraph Service was £440,000; in 1881–2 it sank to £353,000; and during the present year—? with the increased capital expenditure of £200,000, and upon which, of course, interest ought to be allowed—the commercial Revenue is estimated at £363,000; but, reckoning £6,000 for interest, it is only about £4,000, instead of £50,000 better than the previous year. No doubt the falling-off of the Revenue has been due to the circumstances at which my hon. Friend hinted. The salaries of the telegraph employés have—I will not say by the pressure of the House, but, certainly, with the approval of the House—been increased. I do not regret that increase; I think the extra pay they received was duo to them; and if I had not thought so no number of Memorials would have induced me to recommend the Treasury to have made such a large sacrifice of Revenue. But I hope, as I sometimes hear that there is still in certain quarters some discontent, that it will be borne in mind that £80,000 a-year is a very large sum to take from the taxpayers of the country; and the result of it has been that it has reduced the commercial profit of the Department by that amount; because, of course, you cannot spend the money and keep it too—a simple maxim that appears to be sometimes forgotten. Let us consider what is the financial position of the Service? The capital may be taken at £10,500,000; and £353,000—which was the commercial profit of the year 1881–2—would represent an interest on the capital of about 3J per cent. The profit of the present year represents 3¼ per cent, or a trifle more. Therefore, from this point of view, the Telegraph Service may be considered at the present time to be just a paying concern, yielding a current rate of interest on the capital that has been expended. But there is another consideration which I feel I should not be dealing frankly with the House if I did not say a few words upon. The capital of the Telegraph Service—£10,500,000—represents the sum which was paid by the State for the Telegraphs. But owing to the blunder committed by the Government and sanctioned by Parliament—for both the Government and Parliament were alike responsible in the matter—wo are saddled with what may be regarded as a useless capital expenditure of £3,500,000; because I have been told on the highest authority—and great pains have been taken to investigate the subject—that if, instead of the £10,500,000 that were paid for the Telegraphs, £7,000,000 had been paid, that would have been a large if not an extravagant sum. It is scarcely fair, after making that mistake, to say to a Department—" We hand you over a concern for which we blundered into paying £10,500,000, when the utmost we should have given was £7,000,000; and you must make a commercial profit, not on the real commercial value of the thing we handed over to you, but on the amount which, through carelessness, was squandered?" I think that is a very fair way of putting the case; and if we take the capital account of the Telegraphs at £7,000,000, we shall then find that in the present year, taking the commercial profit at £360,000, we are making a profit of about 5 per cent. I have now endeavoured to redeem the promise that I would frankly state the facts that are in my possession. The question before the House is one that does not rest with me to determine. I can only say that although there may be some difficulties about buildings, as has been pointed out by the hon. Baronet (Sir Henry Peek), those difficulties at the present moment have, to a great extent, been removed. What we may require in the future I cannot say, because there really seems to be no limit to the increase of business connected with the Post Office if increased facilities are afforded. But, whatever buildings may be required, I believe they will and must be supplied; because I feel certain the public would never sanction being deprived of any postal facilities through want of buildings. But, leaving future wants to the future, we are supplying those buildings which we think are necessary for our present wants; and, whether the day comes soon or whether it comes late, the very moment we receive an instruction from those who are in superior authority over us, either from the Government or from the Chancellor of the Exchequer, that the Revenue is in a position to lose for one year £170,000, and for four years an aggregate loss of £450,000, I can only repeat that that news will be welcomed at the Post Office. All that we consider we have to do is to make what Revenue wo are ordered to make for the Govern- ment, at the same time giving the utmost facilities possible to the general public, either in the way of postal or telegraph service communication.

MR. W. FOWLER

said, he thought a larger question lay behind that as to the blunder in calculation made in 1808 and 1869. It was quite true that the Telegraph and the Post Office ought to be regarded as one Department; but this Department ought to be managed for the public benefit. He questioned the propriety of the Government making money by a Department; all profit made should be utilized for the benefit of the country. He held that they should long ago have had 6d. telegrams and halfpenny letters, and they would have had them if the money made by the Department had not been taken hold of by the Chancellor of the Exchequer for buying powder and shot, and for every other purpose not connected with the Post Office. Instead of appropriating the income arising from it to the good of the community, in connection with the Department that made the money, he appropriated it to the general Revenue of the country. The Government ought not to be so anxious to make money. What was this £170,000 a-year which they asked for to the Government? The Postmaster General was tied hand and foot simply because the Chancellor of the Exchequer was short of money. He did not think the money so appropriated by the Government was fair and legitimate Revenue. The Revenue was, in fact, made in an unfair way, because the public were charged more than they ought to pay. All they asked was that out of £3,100,000 made by the Department, £170,000 should be devoted to an enormous public advantage; and he thought they ought, if possible, to compel the Chancellor of the Exchequer to give up this sum. He hoped the Government would not renew the blunder made in 1868 and 18G9, and that the boon now asked would not be refused simply because they had given 50 per cent more than the telegraphs were worth; and, therefore, he should vote in favour of the present Motion.

THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)

said, he had been appealed to from both sides of the House, and very properly by the right hon. Gentleman opposite, to state upon this very important question what the view of the Government, as distinct from the purely administrative view of the Post Office, might be upon this question. He would say, to begin with, that he conceived when the Government undertook the purchase of the Telegraphs, and when the rate was fixed at 1s. for 20 words, it was so fixed with the distinct understanding—in fact, it was so stated—that a reduction would take place in the rate when the state of the Telegraph account would admit of that reduction. He quite agreed that the reduction of the rate from 1s. to whatever sum the condition of the Revenue permitted would be a great boon to the public; and he did not deny that when they compared the system on which telegrams were paid for abroad with the system on which they were paid for in this country, the comparison was, except with regard to charging for the address, to our disadvantage. In all these respects he quite agreed with what had been said in support of the Motion on both sides of the House; but the question was, could the Government legitimately, at the present moment, agree to reduce the charge to 6d. with the modifications which his right hon. Friend had so fully explained to the House; or would it be more expedient to wait until the financial condition of the Telegraph Department was shown to be more satisfactory than it was at present? Now, supposing the reduction were made, there would, at any rate, be a loss of £170,000. ["No!"] He had great respect for the opinions of hon. Gentlemen; but he felt bound to say that, considering the Postmaster General had given that figure last year, and that after a year's experience he adhered to that statement, he must attach more weight to it than to the opinions, however valuable, of those who had not had the advantage of his right hon. Friend's knowledge on the subject. On a question of this kind he thought the authoritative opinion of the Postmaster General ought not to be lightly put aside. But what was the lowest estimated loss? The Postmaster General had stated to the House that, taking the profits on a 6d. telegram at 1½d., there would be a loss of £170,000; and, before accepting his right hon. Friend's estimate as final and conclusive, it was only right that it should be scrutinized to the bottom; but, having held the Office of Chancellor of the Exchequer only a few weeks, it would be impossible for him to accept the responsibility of stating that the los3 estimated by his right hon. Friend would be the total loss. His right hon. Friend had explained that the average amount received on each 1s. telegram of 20 words was 1s. 0½d.—that was to say, the excess over the minimum rate was only ½d.: but in the calculation of the sixpenny rate it was assumed that the average length of a telegram would not be represented by 6d. or 6½.d., but by 10d., or an excess of 4d. So that, while at present the average excess over the minimum rate was 4 per cent, in future the average excess would be 66 per cent over the minimum rate. That might be the case; but, as the whole question depended on that calculation, it would be the duty of the Treasury, before accepting it as a basis, to be perfectly satisfied of its correctness. He should certainly hesitate to assume, and he would warn the House not to assume, that the loss on the reduced rate would only amount to £170,000 until they had had an opportunity of testing the matter. Even assuming that the loss would only be £170,000, he was not prepared to say at that moment that the House ought to pass a Resolution consenting to the loss of that sum. He had heard with surprise in the course of debate some of the statements which had been made in regard to the unimportance of large items of expenditure; and he was all the more surprised when he remembered the great anxiety which had been expressed during the present Session in regard to the Public Expenditure and the care which ought to be taken over it. The hon. Baronet opposite (Sir Henry Peek) had suggested that the Government, for the extension of the Post Office business, should at once purchase property in the City of London for £000,000. But what would the House say if the Government were to ask for £600,000 more taxation? Hon. Gentlemen who were so indignant on this subject would be the first to denounce the Government for its extravagance. He also heard with surprise his hon. Friend who spoke last say that they ought to spend the profit derived from the Post Office on buildings, and so on, and giving greater facilities. That was all very well; but hon. Members should recollect that if the£3,000,000 the Post Office produced were spent in that way the House would have to find taxes to meet that loss of receipt. That £3,000,000 enabled them to reduce taxation for which they would otherwise have to come to Parliament and ask for an additional 1½.in the pound of Income Tax, or some other impost. In his opinion, it was necessary to proceed with caution. He would remind the House what they were doing that year for the Post Office. On their recommendation Parliament had already passed the necessary Act for the carrying out of a postal parcels system, in which his right ton. Friend had taken so admirable an interest, and which he had perfected in its inception, and in obtaining for it the approval of Parliament. That would add to the cost of the Post Office an expenditure of upwards of £400,000 or £500,000 a year. It was true that there would be an equivalent addition to the receipts, and that the country would not be losers; but was it prudent, in the same year when they were undertaking so large an expenditure as that, also to largely increase the Telegraph business of the Post Office at an undoubted loss of £170,000 a year, and without knowing that it would not be greater? He did not believe that it would be wise to undertake the responsibility of that expenditure at the present moment. Once again, however, he would most explicitly state that he was most strongly in favour of a reduction of the telegraph rates as soon as it became feasible. In 1868, when the original proposals to purchase the telegraphs were brought before Parliament, he had advocated them; and he well remembered the promise held out that the reduction to 6d. was only a question of time. But he hoped that the House would not agree to the Motion. This, however, he would undertake—that between the present time and next year the question should be most thoroughly investigated; and if they could find any mode in their power of carrying out the proposal they would only be too glad to ask Parliament to adopt it.

MR. H. H. FOWLER

said, with regard to this sum of £170,000 or £177,000, the right hon. Gentleman the Chancellor of the Exchequer seemed to have forgotten for the moment, with reference to the question of the change costing £170,000, that there had been another Estimate furnished by another official of the Post Office, and that, therefore, it seemed to be a moot point even in the Post Office. Business men, however, were quite competent and able to apply business tests to a question of this description, and they knew as well as the authorities at the Post Office and the Treasury knew that one uniform law in business was that a reduction in the price of an article meant an increase in the consumption of that article. Therefore, they believed that a reduction in the charges for telegrams would be succeeded by an increase of business in that Department. He did not think that the figure was too high. He was quite willing to accept it at £170,000; and he was prepared to say that, for the convenience of the public, and having regard to the general regulations of the Post Office and the Telegraph Department, that was an expenditure that the House ought to sanction. The question of the sanction of that expenditure was not a question either for the Post Office or the Treasury; it was one for the House to determine. There had not been a single argument used that night by the Chancellor of the Exchequer against this proposition which could not have been used with equal force and effect, and was used, he might say, with equal force, but happily not with equal effect, against the introduction of the penny postage. The Postmaster General told them that it took some 16 years before the Revenue recuperated itself for the loss through the adoption of the penny postage; but that argument held good as an argument now, because if it had prevailed then they would never have had the penny postage. The Chancellor of the Exchequer said—" We do not wish to increase the Expenditure; "but when they knew the nature of the Votes to be proposed that night, the extravagant expenditure under the Civil Service Estimates—there was a proposition he learnt, for example, to continue a subvention of £250,000 to turnpike roads—he thought even the most economical Member of that House would be favourable to sanctioning a diminution of Revenue of even £200,000 a-year to confer this great boon upon all classes of the country, and specially the poorer classes. He was sure the proposal would be warmly accepted by the country; and, as regarded the objection that they must wait till they saw their way clear, that time would never come if they did so. He firmly believed that the House would be found quite willing and ready to find the money when it was wanted. On the broad general principle that the cost of telegrams should be reduced, he hoped his hon. Friend would proceed to a division.

Question put.

The House divided:—Ayes 50; Noes 68: Majority 18.—(Div. List, No. 43.)

Words added. Main Question, as amended, put.

Resolved, That the time has arrived when the minimum charge for Inland Postal Telegrams should be reduced to sixpence.

Resolved, That this House will immediately resolve itself into the Committee of Supply.—(Mr. Chancellor of the Exchequer.)

Motion made, and Question proposed, "That Mr. Speaker do now leave the Chair."