§ Order read, for resuming Adjourned Debate on Question [24th March],"That leave be given to bring in a Bill to amend the Telegraph Acts, 1863 to 1878."
§ Question again proposed.
§ Debate resumed.
Mr. Speaker, this Motion for leave to introduce a Bill to amend the Telegraph Acts was adjourned at a late hour a few nights ago, in order that I might have a fitting opportunity of stating the intentions of the Government with reference to the introduction of 6d. telegrams. The House will recollect that two years ago it carried against the Government, and by a considerable majority, the Resolu- 1073 tion of my hon. Friend the Member for Glasgow (Dr. Cameron) calling for a reduction of the minimum charge for telegrams from 1s. to 6d. In view of this Resolution, the Government promised to introduce a new tariff with a 6d. minimum. In the interval, preparations have been made for the increase of business which is expected from the reduction, and about £500,000 has been spent on increasing the plant and adding to the wires on some of the principal lines, and it has been decided that the new tariff shall come into force on the 1st of August next. My lamented Predecessor (Mr. Fawcett), who took the greatest possible interest in this subject, had not come to any determination as to what the new tariff should be, and he left no indication what his views were on the subject; but he had appointed a Departmental Committee to report on the financial effect of various tariffs which had been suggested in different quarters. I am sorry to say that in the interval which has elapsed since the Resolution to which I have referred was adopted the financial position of the Telegraph Service has not only not improved, but is very decidedly worse than it was. The profit on the Telegraph Service, which for some years had been very low, gradually increased till the year 1881; but from 1881 down to the present time there has been, again, a considerable reduction. Hon. Members may probably have seen the Financial Statement for the past year on the subject of the Telegraph Service laid before the House a few days ago. It is a financial account made in pursuance of the Telegraph Acts; and on comparing it with the account for 1880–1 they will find that, whereas in the former year there was a surplus profit of £32.5,000 out of which to pay the interest on the capital invested in the telegraphs, last year there was a deficit of £19,600 The comparison, however, is scarcely a fair one, as the account for the last year includes the sum of £175,000 expended in adding to the plant for the purpose of introducing the 6d. telegram, and is, therefore, capital expenditure. Both accounts also contain a considerable expenditure, which is necessary year by year for extending the wires. Every year extensions are made in all parts of the country which involve a fresh expenditure upon plant. In order, there- 1074 fore, to ascertain what the real cost of the Telegraph Service is, it would be necessary to deduct from the account any expenditure which is in the nature of capital expenditure. Now, if these deductions be made in the two years I speak of, and if the annual accounts were made out on strictly commercial principles, it would appear that the profit of 1881 was £440,000, in 1883–4 £322,000, and for the current year ending on the 31st of March next about £255,000, which would pay interest at the rate of not quite 2½ per cent on the capital which has been invested by the State on the purchase of the telegraphs and on adding to the plant. It will be seen, therefore, that between the year 1881 and the current year there has been a decrease of profit of nearly £200,000, and that the profit on the Telegraph Service is not now sufficient to pay 2½ per cent on the capital sum of £11,000,000 sterling which has been practically expended by the State on the telegraphs. This considerable reduction of £200,000 has been due to two causes; in the first place, to the very considerable additions to the salaries of the telegraphists and other officers of the Department which were made two or three years ago very much at the instance of hon. Members of the House, and which Mr. Fawcett considered to be absolutely necessary; and in part, also, to the fact that the cost of the maintenance of the telegraphs has increased within the last two or three years, owing to the necessity of replacing some of the posts and other plant taken over by the State from the Telegraph Companies. The House will see, therefore, that the margin of profit at the present time is not large, and does not pay full interest on the capital invested. I should also point out that, owing to the depression of trade, the receipts have been very stationary the last two or three years, and that we are now subject to the competition of the telephone. The next point which I have to bring under the notice of the House is the effect of the present tariff for telegrams, and how far it loads to unnecessary and unprofitable labour to the Department in the transmission of superfluous and unnecessary words. Under the Telegraph Act of 1868 no charge can be made by the Department for addresses; and for words in the text the 1075 tariff is 1s. for 20 words, and 3d. for every five words afterwards. Now, the House will see that there is no inducement whatever to senders of telegrams to compress their addresses within reasonable limits, or to compress or limit the words of their text, provided they do not exceed 20; and the result is that a large number of unnecessary words are telegraphed. The average number of words in addresses is a little over 11, of which four are devoted to the name and address of the sender, and seven to that of the addressee; and the average number of words in the text is 17—making a total average of 28. We differ in our method of charge from nearly every other country in Europe. Almost without exception their tariffs are based on payment per word, including the addresses, and with some low minimum charge; the result is that there is every inducement to compress the words and limit the length of addresses and text. In foreign telegrams sent from this country, where the charge is a purely word rate, the average number of words used in addresses is five; in Germany it is only four, and the average number of words in the text of these foreign telegrams is also much below our average, the average difference between the number of words used in the addresses here and the Continent is six, the difference between 11 and five. Under our system of free addresses, there is no inducement whatever to limit the addresses; many firms habitually stamp their telegrams with the full name of their firm, where one word would be quite sufficient. I received myself a few days ago a telegram in which 26 words were used in the address, and where six would have amply sufficed; so that the Post Office was put to the trouble of telegraphing no less than 20 unnecessary words. It is the same with the text of the message. Very few people take any pains to limit their words within 20, and a great many purposely fill up the 20, because they like to have their money's worth. Indeed, it has been estimated that at least 30 or 40 per cent of the words telegraphed are superfluous and unnecessary; and the plant of the Department and the time of the staff are occupied in transmitting these unnecessary words without any benefit to the Government or to the public. If the tariff were such as to 1076 give inducement to compress the words and to cut off what is unnecessary, it is certain that the same plant and staff would transmit a greatly increased amount of business. The present annual number of inland private telegrams is 24,000,000, and the average receipt from them is 13d., showing how few exceed 20 words. A very careful estimate has been made of the cost of transmitting them; and we believe that 10d. may fairly be taken as the average cost of transmitting a telegram, without taking into account interest on the plant. It will be obvious to the House that if we were to reduce the rates all round by one-half, retaining the free address, our receipts for the present telegrams would be reduced by one-half, or about £650,000, and our expenses would remain the same; while the increased business due to the reduction would be carried on at a loss, and would mean financial ruin to the Service. Another suggestion is that we should retain free addresses, and allow five words in the text; but it has been calculated that, assuming an increase of 30 per cent in the number of telegrams under this scheme, the difference to the Department, as compared with the present tariff, would be £264,000, or considerably more than the whole of the present margin of profit on the commercial account. This tariff, also, would not be very favourable to the public, for while it would allow any number of words in the address the words in the text would be very limited; and it would not be open to senders to economize their words in the address, in order to add them to the message itself. The fact is, that if only a small total number of words can be allowed for the minimum charge, it is the interest of the senders of telegrams that they should be allowed to economize words in the address, in order to add them to the message itself. It becomes, therefore, the interest both of the sender and the public, as well as of the Government, that inducement should be given to limit the words of the address; and the only way of effecting this is to charge rateably for the words used both in the address and in the message. After careful consideration of all the various tariffs which have been suggested, I have come to the conclusion that of those which are within financial possibility, the best, both for the 1077 senders of telegrams and for the Department—the one which will give the best return, while giving the greatest latitude to the sender, will be one by which 12 words will be given for 6d., and 1d. for each additional two words, this to include the words in the address, free addresses being abolished. That will give five words for the address, and seven for the text. We believe that, under this tariff, the average number of words used in the address will be reduced from 11 to five, of which one word only will be the average of the sender's address, and four of the address of the receiver. In a very large number of cases it will be unnecessary to insert any address for the sender. The text will show clearly from whom it comes; in nine cases out of ten one word will suffice; and in the same way, though not in the same proportion, there will be great economies in the address of the receiver. There will also be great economies in the text of messages; a careful examination of great numbers of telegrams has convinced the officers of the Telegraph Department that 30 or 40 per cent of the telegrams now sent for 1s. will in future be compressed so as to be sent for the minimum charge of 6d. Of the new business attracted by this low tariff, a very much larger proportion will be at the minimum rate. It is estimated that there will be an immediate increase of business of 30 per cent. It is thus calculated that the average receipts for telegrams will be reduced from 13d. to 10d., and that the average cost of transmitting them will be reduced from 10d. to 8¾d., leaving a margin of 1¼d. The difference to the Department, therefore, partly in the shape of reduced receipts and partly in increased staff, will be about £180,000 per annum, which the House will see will leave us but a very small margin of profit; but it may be expected to improve. At all events, it will cost us for the first year £180,000. The tariff I have thus proposed is very much that which was suggested two years ago by a large majority of the principal Chambers of Commerce, and, I think, by the hon. Member for Glasgow. The only objection I have heard to it is that the abolition of free addresses may tell somewhat unequally upon the poorer classes of the community who live in 1078 our great towns, and whose addresses require fuller description than others. I should be very sorry if this class should not receive full benefit from any change, and, with this view, I have made inquiries. At present a telegram costing 1s. is a rare luxury to people in this class. I have made inquiries at the principal Telegraph Offices in the East End of London and other parts of the country where the working classes mainly live, with a view of collecting reliable statistics on this point; and I find that, out of 24,000 telegrams, only 167 can be attributed to persons in this class, or less than ½ per cent. These telegrams have been carefully examined; 156 of them were sent for 1s.; of these 71, or nearly one-half, could be compressed without any difficulty, and by the exercise of very ordinary intelligence, within 12 words, including their addresses, so as to come within the minimum charge of 6d. These figures have been carefully tested, and I have a Return which the hon. Gentleman the Member for Glasgow (Dr. Cameron) can have if he likes, and he will see that what I have said is correct. The fact is, that the great bulk of these telegrams are of the simplest character, reporting the death or the illness of a member of the family, or reporting the movements of the sender, and require a very few words to tell their tale. I am convinced, from a personal examination of these telegrams, that the senders of them will derive at least their full share in the benefit which is to result from the tariff I propose, and that the 6d. telegram will be an immense boon to the poorer classes of the community, and bring the telegraph within the reach of large numbers to whom at present the sending of a telegram at 1s. is a very great luxury. I have, in conclusion, to say that the measure which I propose will repeal the provisions of the Telegraph Act of 1868, requiring that addresses should be transmitted free of charge, and will enable the Post Office to charge a word rate for ad- dresses, as well as for the text of messages. In adopting this tariff, we shall bring our system into harmony with that of every other country in Europe; we shall put ourselves in a position to meet on better terms the competition of the Telephone Companies; and we shall 1079 be doing the very utmost which the financial position of the Telegraph Service permits of, and we hope that the House will consent to adopt our scheme.
§ MR. STUART-WORTLEY
said, he was glad to see the development of the telegraph system which the right hon. Gentleman had indicated; but he entered an early protest against the proposal to charge for the address of the consignee. He failed to see how such a charge could be justified, because the address contained the only words which enabled the Post Office to perform their part of the contract. He was well aware that in some extreme cases, such as had been referred to by the right hon. Gentleman, great inconvenience might be caused by a good many unnecessary words being in the address; but in the particular case the right hon. Gentleman had mentioned, he could see that the matter arose out of the desire on the part of the sender of the message to give the right hon. Gentleman all his titles and additions. He hoped, under all the circumstances, that this part of the scheme would not be pressed, although he fully admitted that the address of the sender was rather a luxury. He should like the right hon. Gentleman, to inform the House, also, whether the present 1s. rate would be retained alongside the new rate?
said, he had listened to the statement of the right hon. Gentleman with considerable pleasure, although he thought he had taken a gloomy view of the financial side of the matter. He had told them that there would be a loss of £180,000 during the first year, and he gave them to believe that that was a pessimist estimate; but, for his part, he (Dr. Cameron) hoped that that amount of loss would not be come up to. The decreasing revenue of the Telegraph Department in late years was, to his mind, due to the fact that the increase under the 1s. rate had now reached its natural limit; and he believed that by a diminution in the cost of telegrams a great increase of revenue would be effected. He entirely approved of the proposal to charge a halfpenny per word rate; but he hoped the right hon. Gentleman would reconsider that portion of his scheme which related to the address of the consignee. It would not be very difficult to get into 12 words 1080 what might be got into 13; and it was certainly of much more importance that the address of the consignee should be given with sufficient fulness to be thoroughly intelligible, especially in the case of inland and cable telegrams. As a matter of fact, there had been three schemes submitted to Parliament. In the first place, it was proposed to allow the addresses both of the sender and the consignee; and it was said that that would be an expensive scheme, costing the country something like £600,000. By the second plan it was proposed that the address of the sender should be charged, while that of the receiver should go free; and it was estimated that that would cost £64,000. And now there was a third scheme proposed by his right hon. Friend. He should have preferred to have that scheme which would be most conducive to the interests of the public; but, of course, it was only to be expected that the Department would consider the cost. He was convinced that the business of the telegraph would become much developed in consequence of this Bill; and when that was the case the public might reasonably hope for the introduction of further improvements. On the whole, he thought the scheme very similar to that which was shadowed forth by the late Postmaster General; and he did not think that anything very much better could have been expected.
§ MR. TOMLINSON
said, that it would appear, from the speech of the right hon. Gentleman the Postmaster General, that there had been a diminution in the receipts from the telegraphs; but he (Mr. Tomlinson) was very much inclined to believe that that arose from the enormous increase of the telephones. He did not think the Post Office were realizing how these telephones were interfering with the existing system. In the Metropolis the telephones had been developed to an enormous extent; and if inquiries were made of men of business, of the Railway Companies, and persons engaged in various commercial undertakings, who had been in the habit of using the telegraphs on a large scale, it would be found that the development of the telephones had very much diminished the telegrams. He thought the Post Office had missed a great opportunity in not taking up the telephones 1081 and working them upon a large scale in conjunction with the telegraphs. He believed it would be much more beneficial to the country at large if they were worked by the Post Office instead of by private Companies.
§ MR. T. P. O'CONNOR
expressed dissatisfaction with the scheme as a whole. He would suggest to the right hon. Gentleman the Postmaster General that there were two ways in which he might overcome the difficulty which appeared to confront him in regard to the question of addresses. One was to adopt a system of counting numbers as a word. For instance, in such an address as "241, Euston Road," the "241" might be counted as one word only. In the next place, they might adopt the system now followed in regard to cablegrams, and permit the address of the sender to be registered. He did not know whether that was the case in reference to inland telegrams; but, if not, he thought it ought to be made a necessary complement of the present scheme. The registration of the name would probably take away a certain proportion of money from the telegraphic revenue; but it might be made up by charging a small fee for registration. At present, he believed, a fee of a guinea was charged for the registration of a name in connection with cablegrams, and the same plan might be adopted in regard to the telegraphs. Then, again, the work of telegraphing would be much facilitated if a considerable change were made in the names of the streets in the Metropolis. At present there were a large number of streets with duplicate names, such as Oxford Street, King Street, Queen Street, Lansdowne Road, &c. To this fact might frequently be traced the difficulty of finding an address. So far as the mere number of words contained in a telegram was concerned, he could say, from personal experience, that there was nothing more easy than to cut down a telegram of 30 words to one of 10. The art of condensation, however, was only acquired by training and practice; but in future it would be largely stimulated by the fact that people would find they saved money by it. When people had to pay 1s. for 20 words they were inclined to think that it would be impossible to get full value for their money unless they put in the full 20 words, and made the address as long as possible. 1082 As a rule, under the existing system, the Post Office officials were put to from 20 to 30 per cent more trouble than was necessary. Although he was not altogether satisfied with the scheme of the Government, he was inclined to think that it might be made to work well.
§ MR. SEXTON
said, he thought there was considerable force in the objection that under the new scheme, with the addresses charged for, the sender of 20-word telegrams would be placed at some disadvantage as compared with the position in which they stood under the present system. Under the 1s. rate the addresses of the sender and receiver were allowed to pass free, and the telegram itself might consist of 20 words. But in future, if the same individual wished to send 20 words, and the addresses contained six additional words, he would be a sufferer under the present scheme, and would have to pay 1s. 1d. instead of 1s. He believed that, as a matter of fact, the address of the sender and receiver usually required 10 words, and therefore the sender of a 1s. telegram would have to pay his 1s. for 14 words instead of 20. He thought it should be optional on the part of the public whether they selected the 1s. rate or the 6d. rate.
§ MR. SHAW LEFEVRE
said, he did not think it would be possible to keep up the two scales of charges together. The hon. Member was quite right in saying that the sender of a 1s. telegram would be under a slight disadvantage under the new system as compared with the old. But the disadvantage would be very slight indeed. It was anticipated that the addresses would be reduced, on the average, to five words; and, assuming that to be the case, as 24 words were allowed instead of 20 for 1s. the sender of the telegram would be a sufferer to the extent of one word. He was prepared to admit that the competition of the telephone had had some effect already upon the Telegraph Service. The receipts from the telegraphs had been very stationary during the last two years, partly owing to the depression of trade, and partly from the competition of the telephone. The telegraph receipts had lately been decreasing, although there had been no decrease in the number of telegrams. It was hoped, however, that by the reduction of charge which was now proposed a more favour- 1083 able return would be obtained. In reply to the hon. Member for Galway (Mr. T. P. O'Connor) he might say that the question of the numbers included in the addresses was under consideration.
§ Question put, and agreed to.
§ Bill ordered to be brought in by Mr. SHAW LEFEVRE and Mr. HIBBERT.