By similar reasoning, under the supposition that the total number of messages should not exceed 7,500,000, Mr. Scudamore arrived at a minimum estimated net revenue of $1,015,000. Taking the average of the two foregoing estimates, he said the Government "might with almost entire certainty rely upon a net revenue within a range of from $1,000,000 to $1,800,000, the mean of which was $1,400,000." That was for the first year; in the subsequent years the net revenue would increase rapidly. He said: "It is the experience of all people who have worked a large business of this kind that the cost does not by any means increase in proportion to the increase of business; you can always do a greater amount of business at a less proportionate cost than you can do a smaller amount." Mr. Goschen repeatedly asked Mr. Scudamore whether he would stand by his estimates, and whether he deemed them moderate, adding that the Select Committee was taking the matter almost exclusively on his [Mr. Scudamore's] evidence. Mr. Goschen always received the strongest assurances that the Committee might rely on the estimates submitted.[58] Mr. Scudamore's predictions as to the growth of traffic that might be expected from the great increase in the facilities for telegraphing, and from the reduction of the charges by fully one-half, turned out to be brilliant indeed. They were fully realized. The number of messages increased from about 6,500,000 in 1869, to 9,850,000 in 1870-71, to 19,253,000 in 1874-75, and to 26,547,000 in 1879-1880.[59] But Mr. Scudamore's predictions as to the net revenue to be obtained from the State telegraphs turned out to be appalling blunders. In only thirteen out of thirty-six years, from 1870-71 to 1905-06, did the net revenue reach Mr. Scudamore's minimum estimate; in only two of those thirteen years did it reach the maximum estimate; and in only seven of the thirteen years did it reach the average estimate. In the period 1892-93 to 1905-06, the operating expenses aggregated $231,196,000, while the gross receipts aggregated $229,761,000. In the latter sum are included $8,552,000, the proceeds of the royalties paid the Government by the British National Telephone Company for the privilege of conducting the telephone business in competition with the State telegraphs.[60] If that sum be excluded from the postal telegraph gross revenues, as not having been earned by the telegraphs, it will be found that in the period, 1892-93 to 1905-06, the operating expenses exceeded the gross revenue by $9,987,000. [Sidenote: _Operating Expenses under-estimated by one-half_]