The completion of the telegraph system costs $8,500,000; Mr. Scudamore's successive estimates had been respectively $1,000,000 and $1,500,000. Mr. Scudamore's brilliant forecast of the increase of traffic under public ownership. Mr. Scudamore's appalling blunder in predicting that the State telegraphs would be self-supporting. Operating expenses on the average exceed 92.5% of the gross earnings, in contrast to Mr. Scudamore's estimate of 51% to 56%. The annual telegraph deficits aggregate 26.5% of the capital invested in the plant. The financial failure of the State telegraphs is not due to the large price paid to the telegraph companies and railway companies. The disillusionment of an eminent advocate of nationalization, Mr. W. Stanley Jevons. CHAPTER VI THE PARTY LEADERS IGNORE THEIR FEAR OF AN ORGANIZED CIVIL SERVICE 94 Mr. Disraeli, Chancellor of the Exchequer, opposes the enfranchisement of the civil servants. Mr. Gladstone, Leader of the Opposition, assents to enfranchisement, but expresses grave apprehensions of evil results. CHAPTER VII THE HOUSE OF COMMONS IS RESPONSIBLE FOR THE FINANCIAL FAILURE OF THE STATE TELEGRAPHS 99 Sir S. Northcote, Chancellor of the Exchequer in Mr. Disraeli's Ministry of 1874 to 1880, is disillusioned. The State telegraphs become self-supporting in 1879-80. The House of Commons, under the leadership of Dr. Cameron, M. P., for Glasgow, overrides the Ministry and cuts the tariff almost in two. In 1890-91 the State telegraphs would again have become self-supporting, had not the House of Commons, under pressure from the civil service unions, increased wages and salaries. The necessity of making money is the only effective incentive to sound management. CHAPTER VIII THE STATE TELEGRAPHS SUBSIDIZE THE NEWSPAPER PRESS 113 Why the newspaper press demanded nationalization. Mr. Scudamore gives the newspaper press a tariff which he deems unprofitable. Estimates of the loss involved in transmitting press messages, made by responsible persons in the period from 1876 to 1900. The State telegraphs subsidize betting on horse races. CHAPTER IX THE POST OFFICE EMPLOYEES PRESS THE HOUSE OF COMMONS FOR INCREASES OF WAGES AND SALARIES 127