The Ricardo Album

THE GOVERNMENT AND THE TELEGRAPHS

The following letter appears in the Times: —
SIR, — The policy of non-interference with private enterprise is now about to be reversed — a policy which has been propounded and insisted upon by the most eminent of our political economists. A few minutes before the rising of the House at their morning sitting on Wednesday, April 1st, the Chancellor of the Exchequer moved for and obtained leave to bring in a bill to enable the Postmaster-General to acquire, maintain, and work electric telegraphs in the United Kingdom. The provisions of the bill, which are to effect the transfer of the telegraphs from public companies to the State, are in the highest degree unjust. The bill is termed “permissive,” but it is really compulsory, as it proposes to authorize the Postmaster-General to purchase “the whole or such parts as he may think fit of the undertaking of any company and any undertaking.” If the Postmaster-General chooses to exercise the powers sought for in the bill, he may buy any one of the smaller companies whose shares stand at merely a nominal value in the market, and, with the resources of the nation at his command, lower the tariff to such a figure as would coerce the larger and more prosperous companies into selling their property at a price wholly inconsistent with its real value. Now, I would ask, is this a policy worthy of the Government, and will the commercial classes of this country, represented by their members in Parliament, sit quietly by and allow the property of public trading companies to be confiscated by the passing of such a measure? The manner in which arbitration is provided for by the bill, if it did not entail such grave considerations, would be absolutely ludicrous. It is provided, — “That if the Postmaster-General shall acquire any one undertaking by the powers of this Act, he shall, upon the request in writing of any company, purchase the undertaking of such company upon terms (failing agreement) to be settled by an arbitrator to be appointed by the Board of Trade,” &c. So that the Government, having driven an unwilling company to submit its claims to arbitration, proposes to take upon itself the office of arbitrator, and to fix the price. Such a mode of dealing with private property is without precedent. I will pass from these provisions, which need no further comment, to a short statement of the history of the company which I have the honour to represent. The electric telegraph was practically invented by Messrs. Cooke and Wheatstone, who patented their inventions and originated the telegraph in this country. The patents were purchased by the late Mr. John Lewis Ricardo, M.P., who, with a few other gentlemen, formed the present Electric and International Telegraph Company, which was incorporated in 1846 under the title of “The Electric Telegraph Company,” for the purpose of working those patents. To this company and its promoters, therefore, is due the entire credit for introducing and carrying out the electric telegraph, not only in the United Kingdom, but throughout the civilized world, and through its operations England has been placed in the proud position of having been the nation in which practised telegraphy was first introduced and adopted. The Electric Telegraph Company was for some years composed of “eight” members, some of whom are still living to see the result of their noble endeavors; the greatest anxiety and pecuniary risk had to be endured consequent upon the nature and novelty of the undertaking. The public did not understand the telegraph, and naturally refused to subscribe their money for its establishment; indeed a very long time elapsed before people would even avail themselves of its uses to an extent, and at one time — the promoters deserted by their friends, laughed at by some, and suspected by others — the telegraph had a very narrow escape of dying at its birth. The Electric Telegraph Company has availed itself of every real improvement in the science of telegraphy. The pneumatic system as applied to telegraphy was introduced by the company. The system of franked message forms and telegraph stamps, and the system of remitting money by telegraph between principal towns, was also originated by the company some 16 years ago, although both of these latter public facilities are claimed as novelties about to be introduced for the first time by the Post-office. The company has also supplied intelligence and news messages to every newspaper and news-room of importance in the United Kingdom, at charges which defy competition either in this or any other country. It would, however, require far more space in your columns than I can venture to ask for to state the whole of this company's case. We are unwilling to sell our property at all, we are earning a very handsome dividend for our proprietors, at a low tariff, fixed by a Parliamentary Committee, of which the Earl of Devon was the chairman. Had the companies been allowed to do what the Government now proposes to do, viz., — amalgamate their undertakings — there is no doubt that the tariff would have been as low long ago as the Government bill now proposes to make it. With respect to the telegraph in Belgium and Switzerland, which has been so often quoted, there is abundant evidence in their official reports to prove that the statements as to their efficiency, speed, and price are erroneous, and, moreover, that the internal messages are carried at a heavy loss to their respective Governments. Very grave doubts have arisen as to whether it would be sound policy to place the telegraphs in the hands of Government, an enormous amount of patronage would be created, and seeing that a telegram is simply an “open letter,” the whole telegraphic correspondence of the country would be subject to the surveillance of a Government department, as in foreign countries, a system which even in those countries has given rise to the most bitter complaints on the part of the commercial classes. I could state other reasons why the Government should not be permitted to acquire the monopoly of working the telegraphs in this country, which, however, could hardly be expressed within the limits of a letter; but I believe, when the case of this company is fully heard, that Parliament will not pass the Bill enabling her Majesty’s Postmaster-General to acquire, work, and maintain electric telegraphs. — I am, Sir, your obedient servant,

ROBERT GRIMSTON, Chairman of the Electric
and International Telegraph Company